Hybrid ERP matures as companies develop better strategies

Developing new strategies to ensure that cloud and on-premises ERP systems play nice together is just one part of the hybrid challenge.

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“One clear emerging pattern is that this [hybrid ERP] is very much a platform decision,” says Steve Cox, vice president of ERP and EPM GTM at Oracle. “Here’s our current infrastructure as it is, here’s how cloud technologies can transform our business, and this is the cloud platform that gets us to that future state.”

[ Related: How to make hybrid cloud work ]

Hybrid considerations

Now that companies understand hybrid ERP, they are better able to set priorities for selecting and implementing solutions within the hybrid environment. Hasan sees these factors that motivate Microsoft’s customers toward a hybrid solution:

  • A conservative attitude toward a purely cloud environment
  • A desire for control of data, data residency and data isolation
  • Local network dependencies of the service for business continuity (speed and connectivity)
  • The ability to customize the configuration of the service infrastructure to meet specific business needs such as scalability
  • Recent investments in the company’s data center resources
  • Choice of separating the service operator from the service provider to avoid lock-in by a single provider.

“A true hybrid system, is pragmatic and combines the best of cloud and on-premises environment,” said Hasan. Driving that pragmatism is a need to run business processes and store data across the cloud and a company’s own data centers. “For example, customers with extensive analytics needs can’t and shouldn’t just rely on data that resides in their own data centers for intelligence,” says Hasan. “The cloud is now a rich and necessary source of information and to get the best analytics, businesses need to leverage all available data sources.”

There’s also the question of what type of cloud to use for a given application. “Customers have on-premise solutions that they have migrated to Oracle Cloud Infrastructure as a Service (IaaS) as an infrastructure provider to quickly increase business value and performance,” adds Cox. “That can be a mix of public cloud solutions or even include Oracle Cloud in their data center.”

Integration within the hybrid ERP system and with point solutions outside core ERP is another important consideration. “Businesses should consider business integration, how it will connect with their existing systems, scale – can the system they are deploying scale to their needs, both from a transaction and global availability perspective,” says Hasan.

Virtually all traditional and cloud ERP vendors and cloud solution providers offer API libraries to connect their offerings to other software. If an API is available from the solution provider, then you can find it in an open API repository. “The API economy will be there,” according to Denecken.

Managing APIs from multiple players is a big change for companies that had been used to a single platform. “From a technical system administration and operations perspective, you end up dealing more with making sure that the API structures don’t break, that the data made available in each new release works in ways that are consistent with the past,” says Strout. “You are doing continuous checks on what’s coming out next and making sure that orchestration is not breaking anything upstream or downstream. We believe that is a relatively small price to pay to get at things we’ve wanted to in the past.”

Even with strong APIs, integration presents another challenge in that updates from each cloud service provider work on their own schedule. “You have to do that orchestration.” Strout adds that “15 years ago the conversation was, ‘Do you want totally integrated solution or best of breed?’ With this model you end up with a little bit of everything. Because of the APIs and the way things are constructed, it is an easier orchestration model than it was 15 years ago.”

Integration allows for easier access to data from multiple sources, and that means companies should rethink how they do reporting and analytics within a hybrid ERP system. “We focus on making sure users have a single pane of glass that has data from a number of different systems,” says Strout. “It’s changed the end user experience from that perspective.” He added that because SaaS systems are typically easier to use than traditional ERP user interfaces, end users work faster because they don’t have to key in as much data or spend as much time looking for the right fields.

New technologies that fuel digital transformation such as machine learning, IoT, and cloud analytics are developing rapidly, and planning a hybrid ERP roadmap needs to take them into account. “[Cloud services] frees up IT to do more analysis of data and evaluate new tools like IoT,” says Guay.

Cox agrees. “The cloud changes the nature of the resources required to support a business. An IT team can shift from one that is focused on ‘keeping the lights on’ to one that is an entirely different value-add organization. Those same resources can use things like Oracle Cloud Platform as a Service (PaaS) to integrate applications and create consistent workflows across multiple systems — both on premise and in the cloud —while also maintaining security and performance.”

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