Top 5 considerations in moving ERP to the cloud
Digital transformation is 80% planning, and 80% implementation. And it's up to the IT team to ensure that tools and platforms are both fit for purpose and rolled out in a way that lets the whole organization realize that purpose.
When it comes to large scale projects like migrating legacy systems to the cloud – especially those as vital to operations as ERP – this process can be fraught with difficulty. And the challenges of navigating the project while keeping normal business running as usual presents multiple unique challenges.
At this October’s X4U, I caught up with Holger Mueller, VP and Principal Analyst at Constellation Research, for a discussion on this very subject, covering a range of questions from the basic (“What is cloud?”) to the extremely specific (“How can we successfully manage the sunsetting of our old systems?”).
Below you’ll find my pick of the top 5 topics we discussed – and you’ll be able to watch the whole session on demand once you’ve finished reading.
- Know why you’re migrating to the cloud in the first place
“Cloud” has attracted a certain degree of mysticism from its most vigorous promoters, but at the most basic level, it’s simply buying computing power in remotely with which to run your systems.
Cloud is the foundation of the SaaS (“Software as a Service”) model of IT. But whether or not it’s right for your business depends on the answer to one key question: how much elasticity do your operations require?
The great advantage of cloud is its ability to rapidly scale up or down in response to demand – without any of the hidden costs or service disruptions that often accompany on-premise infrastructure. (Especially on-premise infrastructure that needs to undergo frequent reconfiguration.)
If your organization is one which requires flexibility and which has a huge appetite for computing resources – but don’t want the huge CAPEX expenses associated with managing all your IT resources on premise – then cloud is perfect for you. (And as more and more companies come to experiment with and employ AI and machine learning in their ERP platforms, cloud will increasingly become a necessity to deal with the vast amounts of power required to effectively use them.)
- Consider security – but remember you’re the weakest link
Security was once a primary fear for companies migrating their systems to cloud. However, as the technology has matured, we’ve seen a huge transformation in the ability of cloud providers to manage the security of their platforms.
A good analogy is that of public utilities: just as companies would have once had to generate their own energy, but have now outsourced the task to public utility companies who are much more reliable and affordable, companies are increasingly outsourcing their IT infrastructure requirements to companies that are both better at fulfilling them and better at securing their estate.
The number one security threat to cloud platforms is the same as for any platform – poor or nonexistent policies and poorly trained people. As you migrate, make sure you set aside the time to properly institute security policies and make sure everyone in your organization is aware of them.
- Be aware of your vendor’s “data gravity”
In our experience, the single biggest error in cloud migrations used to be making the move too late. Organizations would stay with their legacy systems just a little too long, and move to cloud reactively when confronted with the fact that their competitors who made the jump earlier were now far ahead of them. But increasingly, we see the biggest error as being making the jump too quickly and without careful consideration for vendor partnerships and their “data gravity.”
What’s “data gravity?” Put simply, it’s a measure of the difficulty of moving away from a cloud provider should the need arise. One of the biggest draws of the cloud is that migrating data to the new platforms is actually very easy and very quick. But what’s not so easy or quick is removing data from a cloud platform should the need arise. It can also be extremely costly.
Plan your migration carefully, pick the right vendor the first time, and be aware of their “data gravity” – don’t be seduced by how easy the move is, and ask how difficult moving away might be.
- Migrate critical systems first – but be prepared to go “all in” sooner rather than later
Best practice for cloud migration in ERP dictates that you don’t want to end up constantly playing the “system integrator” role of a complex hybrid cloud estate. In the long run, this puts the breaks on enterprise agility and can leave your teams bogged down in maintenance and admin – exactly what a cloud solution is supposed to put an end to.
Begin by taking the time to identify your critical systems – shape your cloud space around these – and then start migrating your larger “automation islands” at the same time. These are the ecosystems that work best when integrated together and complement each others’ functionalities. They also usually tend to be the most resource-intensive.
After this, it’s best to identify coherent “chunks” of the estate to migrate. Move all planning applications over at once, for example, rather than trying to handle each system or tool independently. For companies with greater data maturity that are already leveraging AI and machine learning, it can be wise to take a “data first” approach – migrating data first and then taking advantage of the abundance of integration tools available to continue using your legacy systems to process it as you complete the journey.
- Send your legacy system off the right way
Sunsetting a legacy system isn’t an easy prospect – especially if it leaves you with a capability gap on a key system. However, many businesses will prolong the process unnecessarily out of a combination of fear and complacency – it’s easy to hang on to a system you’ve been relying on for 20 years, after all.
Making a case to the business will depend on your ability to map processes – critical and non-critical – and map how they will be replicated or replaced by the new system.
Beyond this, you’ll need to ask and answer one very important question: assuming a functionality we currently have isn’t available as standard, how can we build it back in? As the world becomes more and more uncertain, the only certainty is that your ERP will need the extendibility and flexibility to adapt for whatever the next unexpected challenge is.