Traditional ERP applications that have been implemented and supported on premises are rapidly falling behind in receiving the latest features and updates compared to their cloud-based counterparts, which receive regular real-time updates.
This, along with the fact that many vendors are going so far as to discontinue on-premises support, is pushing more companies towards migrating their systems to the cloud.
But there are many more reasons to move to the cloud than just continuous support. Cloud ERP systems offer many business benefits, from reduced cost of ownership, business complexity and IT department dependency through to improved corporate agility and data security.
However, migration to the cloud can be daunting for many IT leaders, who must factor in new challenges and unknowns in addition to gaining business buy-in and overcoming employee resistance to change.
We spoke to a number of Middle Eastern IT leaders about their experiences moving ERP to the cloud, and share their advice — along with that of industry analysts — to other CIOs and CTOs about to start this journey.
Do your vendor research
It’s important to thoroughly research vendors and system integrators before choosing who to partner with on an ERP migration project.
Sometimes, companies can get influenced by a well-known brand name, points out Harish Dunakhe, IDC’s software and cloud research director, but objective assessments of organisations’ technical credentials are key.
“Compliance to scope, local support, a certified skill pool, project manage credentials, reference check and proof of concept (PoC) score are all important,” he notes.
Mohamed Saada, chief information technology officer at Amer Group, also recommends making vendor rivalry and the competitive sales environment work to your advantage.
“As well as choosing the right partner, it’s very important to make use the rivalry of cloud providers. We chose the two best vendors for our needs and then let them fight for this project. This gave us the best possible solution and price.”
Undertake an internal readiness assessment
According to research by IDC, roughly half of businesses in the Gulf region are struggling to find the right skills for their cloud projects, so it’s imperative to check what skills you will need before you start migrating your ERP system to the cloud.
Don’t let excessive pressure from the lines of business influence your hiring decisions for technical skills, Dunakhe says, as ERP migration demands experience and expertise in the technology, region the company operates in, and the industry it belongs to.
“Look for the right candidates to drive these projects if you don’t have these skills in house,” he advises. If you’re lucky enough to already have the right people internally, “make sure they present a detailed plan that has ‘to be’ architecture, ‘to be’ processes, challenges they might face and support they might need”.
Test the waters with a small project
Moving ERP to the cloud can understandably be a scary decision for an organisation to make, as it’s a business-critical system. One of the ways to ease concerns is to start small. At the Cairo-based Amer Group, Saada did just this, testing the water by first migrating the company’s email services to the cloud.
“If things were to go wrong the blast radius would be much smaller you see. However, it went smoothly, and confirmed to management that cloud really makes things easier and ensures business continuity. It also proved to the IT department that it wasn’t difficult to manage and that their jobs were still secure,” he says.
When it came to the ERP move, he wasn’t going to leave anything to chance and challenged his vendor to provide a proof of concept before going ahead.
“I recommend this to everyone. Our vendor provided us with machines to do all the testing we needed to prove we were on the right track.”
Stakeholder buy-in is key to ERP migration success
Getting executive-level support is crucial to the success of any ERP migration, as is winning over staff who may be sceptical or nervous about the process.
Umesh Moolchandani, group IT head of the Bin Dasmal Group, and Mohamed Absar, head of projects and solutions at DP World, both recommend that IT leaders focus on the human aspect of the project.
“Your workforce has likely grown accustomed to using the on-premise ERP system, so introducing an entirely new platform can lead to resistance to change. This is where organisational change management comes in,” says Moolchandani.
“Developing a comprehensive change management plan ensures that employees are informed of the specific changes to come and know how the changes will affect them. Setting clear expectations from the beginning minimises change and resistance and makes training more effective.”
It’s also important to remember the project is about business transformation, not just technology, Absar adds. “Everyone in the organisation has to participate in order for it to succeed. Therefore, the most important thing is aligning everyone to the vision of the project, and for this, communication is key.”
Avoid multiple migration project owners
Quite often vendors and partners have a habit of outsourcing project components to subcontractors and while this is ok to a point, accountability and ownership of the success of an ERP migration should lie with a single company, notes Dunakhe.
This is something Saada agrees with, and when he chose a partner, he made it clear that they could subcontract, but that he would only deal with them directly and full accountability lay with them.
“Going into a project with many stakeholders, and a lack of accountability at the end, makes things very challenging and very risky, because at the end of the day if things go wrong, they’ll blame each other. Pointing fingers won’t solve the problem. I definitely advise people to make one organisation the accountable project manager for your migration.”