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Advice and Information for Finance Professionals

Safe Passage to the Cloud: 5 Best Practices for ERP Migration

(Originally published on Forbes OracleVoice)

You understand the potential benefits, you’ve made the business case, and you’ve selected a vendor. You’re ready to move your company’s suite of accounting, procurement, and project management software (also known as enterprise resource planning, or ERP) to the cloud. Now what?

Much has been written recently about the benefits of moving ERP to the cloud, and CFOs are embracing the cloud in growing numbers. Yet the move also presents challenges, and there are only a small number of vendors and system integrators with experience in this area.

In my role at Oracle, I’ve been fortunate enough to work with dozens of companies that have made the journey to ERP cloud. While each company is unique, a number of best practices have emerged. To safely move your core financial and operational ERP, heed these guidelines for maximum benefits with minimum business disruption:

1. Get Strong Executive Sponsorship and Governance

This might seem obvious for any IT project, yet it remains the most frequently cited best practice among our clients. No matter the size of the company, executive sponsorship is critical.

Employees throughout the company must see and hear from the C-suite frequently, so that they understand that the project is a strategic priority for senior management. Without this constant communication, it can be difficult for employees and frontline managers to embrace the change.  They may think there’s nothing wrong with the way they’re doing things now, or they may be uncertain about the implications of the change.

2. Take an Iterative, Incremental Approach

 One of the obvious benefits of the cloud is that you don’t need to install anything, so you can get your system up and running faster. An agile approach to bringing the new system online can help you take advantage of this speed.

Our clients typically start with small teams piloting small units of work, to establish whether the new cloud ERP meets their main business requirements. If the team runs across a scenario that doesn’t meet their needs, they give us early feedback so that we can provide recommendations, and in some cases, incorporate enhancements into the next cloud update. 

Companies should be cautious, however, about seeking too many changes to the delivered process, as this can often negate the advantages that come with the cloud—which brings us to the next best practice:

3. Embrace Standard Best Practices Already in the Application

If all you want is to migrate your old, on-premises processes to the cloud, then you’re not really getting all the benefits of a modern ERP cloud. Of course every company will have some unique processes, and you should look for a vendor that can provide the tools you need to personalize your cloud.

Yet if you start by focusing on the small percentage of business processes that make up the exceptions, you run the risk of kicking off your project with delays, objections, and frustrations.

Instead, start with the 80% percent of common business processes that a modern ERP delivers. This will get you to the cloud faster, establish some early wins, and in the long run, will help make your business more efficient by streamlining some old processes that likely haven’t kept up with your business anyway.

4. Study Reporting and Analytics Early

One of the greatest benefits of a modern ERP cloud  is that it provides powerful and easy-to-use reporting and analytics capabilities for a variety of users, whether they be senior executives, line managers, employees, or frontline process experts.

In the past, teams may have had to wait for reports to come out of a separate data warehouse, or wrestled with spreadsheets or Access databases that proliferated across different departments and often showed conflicting data.

Today you can understand your business in real time directly from your ERP cloud, with advanced multidimensional analysis and data visualization that show you relevant insights quickly.

To that end, look at reporting and analytics early in the implementation plan. Decide which information you need, how you want your reports to look, and who will have access to what level of information. Providing early reports to line-of-business managers is a great way to turn skeptics into fans—which leads to our final best practice:

5. Involve Users and Process Owners From the Start

The people who use your ERP systems every day are the most important people on your team; if they don’t buy into it, the solution won’t be a success. Show them the new applications early on, so they can get comfortable with the user experience.

Involve them in the small, incremental conversions I mentioned above, so that they are part of the early successes. Consult with them about the reports they want to see coming out of the system. By the time your ERP cloud project goes live, users will have already adjusted to the new processes, and change management will be minimal.

The above best practices are the most common that I’ve heard from Oracle customers, but this is far from a complete list. I’ll be leading a deeper exploration into cloud implementation best practices in an upcoming webcast. Join us to explore additional strategies to make your ERP cloud project a success.

Karen dela Torre is vice president of the ERP applications business group at Oracle.

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