Meeting ERP Challenges with Cloud Deployment

Kirk Compton, VP, ERP Cloud Services, Dimension Data-Cloud Business Unit
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Kirk Compton, VP, ERP Cloud Services, Dimension Data-Cloud Business Unit

Enterprise resource planning (ERP) systems are ubiquitous across industries as a mission critical solution for managing integrated applications and business processes, including e-commerce, human resources, supply demand, accounting, CRM, and more. These systems, however, do present a common technology challenge–the legacy technology on which they run make it difficult to respond to changing business demands and dynamic market conditions.

Furthermore, ERP systems are costly to maintain and complex to manage. They demand high availability, high performance, and always-on availability. Enabling more flexible, agile ERP systems without sacrificing security or performance is a key business demand.

While there is no simple answer, using a cloud model for ERP provides a vehicle for helping organizations get more out of their ERP investments, without having stressing IT budgets.

Why Cloud? Why Now?

Cloud is no longer a fringe IT concept; it’s a strategic part of the business IT landscape. As the cloud absorbs more production applications, ERP systems are being tapped for migration to the cloud. According to industry analysts, 47 percent of organizations plan to move their core ERP systems to the cloud by 2020. Many companies are already moving dev and test ERP workloads to the cloud.

Experts also estimate that most organizations only utilize 60 percent of the power of their ERP solution. Why? Organizations often delay changes to the application due to aging infrastructures that can’t support new features and functions. Often the basis layer of the application hasn’t been properly maintained; making changes to the application layer a lengthy and riskier process.

The cloud supports tangible benefits in terms of ERP use and functionality. Reducing the cost of infrastructure is one clear benefit. Cloud also enables ERP applications to keep pace with the dynamics of the business. By selecting a cloud provider that offers infrastructure and application operations services, the enterprise can refocus resources on innovation, implementing new applications, and improving business processes while enabling cost-effective ERP support.

Today’s flexible, responsive cloud delivery models, to bring advancements such as in-memory computing and access to modern hardware–without the need for capital budget approvals. Cloud providers also provide support management, patching and other standard ERP maintenance tasks. By taking advantage of the cloud providers’ expertise and purpose-built infrastructure, implementations and upgrades are faster and simpler and new features and functions can quickly be pushed out to users. Combine all this capability with a cloud provider with a global footprint and users are put closer to your ERP environment and their data; another way to improve customer satisfaction.

Which Cloud is the Right Cloud for ERP?

The greatest advancement in cloud has been in the area of self-service provisioning. It’s highly automated and remains the hallmark of cloud. That being said, self-service management of the cloud continues to be a challenge, particularly for complex, multi-tier applications like ERP solutions. Selecting a cloud provider that wraps infrastructure with application services and other managed services for storage, security or networking simplifies cloud management.

“Together public and private cloud offers a powerful hybrid solution that spans three considerations for moving ERP and other production applications to the cloud”

ERP solutions seem to crave for private cloud; data is sensitive, workload needs to comply with legislative or regulatory guidelines. In these cases, a public cloud may not be the best choice. Until now, most private clouds have been expensive to buy, time-consuming to set up and manage. The cost of private clouds, often negates the promised value of cloud and the difficulty of managing and maintaining a private cloud has also limited this as an option. Today, however, certain cloud providers offer a private cloud residing in the client datacenter or can be located off premises with the cloud provider. This model combines the on-demand, consumption model of public cloud with the security and control of private cloud.

Together public and private cloud offers a powerful hybrid solution that spans three considerations for moving ERP and other production applications to the cloud. First, IT can use public cloud to develop and test new functionality, QA, and pre-production, and then move the changes to a private cloud for production. Second, private clouds can be backed-up to an off premises public cloud. Finally, depending on the business continuity requirements, recovery scenarios can leverage a hybrid cloud configuration.

One final consideration–choose a provider who is certified by your ERP provider. This will allow you to move licenses to the target cloud and ensure that the ERP provider has certified both the datacenter and the cloud platform. For example, SAP certifies cloud datacenters and platforms for running SAP HANA. With applications like SAP, certifications are essential because they ensure that software support continues uninterrupted.

What Does Success Look Like?

Here’s an example. A manufacturing company with five global branches struggled with network legacy problems accessing data and applications stored in its South African data center. By moving to the cloud, the company sought to centralize IT, including ERP systems. Today each branch has a single server that provides local authentication for all data accessed via the cloud. The company immediately realized high availability, scalability, greater cost efficiencies, and more value from their ERP investment.

Similarly, another global manufacturer faced with rapidly expanding operations made the decision to move to the cloud. For them, the time and capital expense of deploying a new set of systems for each expansion was crippling their ability to grow. By moving to a cloud environment they removed this obstacle completely, allowing them to quickly get new facilities online with the critical ERP functionalities without any additional capital expense.

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