With nearly 70% of organisations migrating their solutions for enterprise resource planning (ERP) to the cloud, Dave Ives, Digital Advisory Executive at Altron Karabina, says that decision-makers need to be cognisant of how to adapt their approach to this mission-critical application.
Thanks to the arrival of multi-national data centres in the country, more organisations are examining ways to benefit from the cloud. This has seen the cloud becoming standard business practice in South Africa with companies no longer able to ignore the advantages of going this route.
But even so, this has yet to impact migrating ERP to an online environment. Given that Microsoft Dynamics 365 is only expected to be available on the local Azure data centres later this year, this has not hindered a number of South African based companies that have already deployed Dynamics 365 for finance and operations; however, some companies could be adopting a wait-and-see approach. The business value in making the move sooner rather than later cannot be ignored with so much to be offered in the standard solution.
Many customers have seen the challenge of deploying ERP and requiring a burgeoning server and application platform estate to support a large ERP deployment.
‘Out-the-box’ cloud services provided by companies such as Microsoft see them take care of all the infrastructure requirements when it comes to ERP, including development and testing platforms. This means a company can remain focused on delivering standardised processes and employee value as well as fulfilling its business strategy rather than being stuck with managing servers and hardware.
Governance rules
Considering the regulatory issues around processes and the sensitivity of the data, ERP operates in a highly governed environment. This means that any business must undergo several internal processes, including streamlining redundant and outdated processes, before committing to an upgrade or migration. With this decision comes the migration of legacy data and ensuring traceability of past transactions.
Backup and disaster recovery are inherent benefits to operating in the cloud once a migration to a cloud ERP platform is complete. Cloud vendors offering high end application solutions provide native regulatory aspects around ERP as well as the highest level of compliance to international requirements for security, trust and GDPR.
This provides the business with a secure and always available platform to deliver shareholder value, in many cases significantly more so than what an on-premise environment can offer. Furthermore, the ERP application is constantly upgraded to provide for the latest localisations, International Financial Reporting Standards (IFRS) based compliance and added functionality with every release. This mitigates the challenge of having an outdated ERP shortly after it has been deployed.
Migrating from an on-prem to a cloud version requires a deeper assessment. Diagnostic tools are available from certain vendors to assess the impact of upgrading, while in some cases a refactoring of the solution, adaption of the interfaces and significant process changes may be required. The tools and assessments are typically run by a trusted partner who can align to a client’s organisational requirements.
The resultant diagnostics also enables the partner to understand how the ERP application has been configured for an on-premise environment and what can be adapted for a cloud-based deployment. This enables the partner to either natively port the ERP processes or reconfigure them for a cloud solution.
Overcoming challenges
However, migrating such a system as integral as ERP does not come without its challenges. One of these revolves around the customisation of not only workflows but the other elements specific to an on-premise ERP installation.
Even so, the cloud might provide the same features natively that companies had to tweak in their on-premise solutions, thereby foregoing the need to customise anything online. This is where an assessment forms an integral part of the migration plan. Tools and libraries that are available, such as the American Productivity and Quality Center (APQC), provide standard process classification frameworks and assist in aligning to standard processes.
Irrespective of the changes occurring, ERP in the cloud presents a new way of doing things. Change management cannot be underestimated and must form part of the process. Often, employees require deep process knowledge before applying their understanding to how the new interface will work or what can be done with the cloud-driven solution.
There is also a requirement to remove Excel and manual based breakouts and ensure that employees see the value of transacting natively in the platform, enabling better visibility and reporting in the longer term.
Once cloud-based ERP applications become standard, the industry will also be assisted in aspects such as mobility, a seamless transaction capability from anywhere and truly accessible data. With robotic process automation and telemetry control embedded, this can become a reality in any scenario. Moreover, ERP in the cloud provides the business with an ideal opportunity to simplify IT in the organisation by rationalising applications. Ultimately, business wants to take care of business and not be hindered with the complexity of IT in a world where many things are possible, they just have not been deployed yet.
