By Rob Churchyard, Global Oracle Leader, IBM
As cloud computing has gone mainstream, many organizations are feeling the pressure to avoid being left behind—especially when they see their peers taking advantage of ERP innovations offered only in the cloud. But some enterprises are slowed down by the “explore-every-alternative” approach towards making the move.
If your company falls into this category and you’re still using Oracle E-Business Suite (EBS) on premises, you may be pondering how to convince your teams that it’s time to move to cloud ERP. In this article, I’ll give you a strategy to make a solid business case for moving EBS to Oracle ERP Cloud and get that executive stamp of approval.
How to Communicate the Benefits to Executives
First, let’s walk through the different cloud business benefits that resonate with C-level executives. You need to tailor your message to the specific executive with whom you are meeting. And if you’re meeting with multiple C-level executives or department heads within your company, make sure you connect a benefit to each line of business or departmental team.
Here is my top five list of cloud benefits for executives.
- Modernize ERP Systems – Many established companies have long-entrenched legacy EBS applications, with some systems hitting the 30-year mark. These on-premises systems are usually very siloed with heavy customizations and manual work-arounds that can even prevent an organization from going through timely upgrades. When a company modernizes its EBS system with Oracle ERP Cloud, it can consolidate data sources, automate processes with robotic process automation and machine learning, simplify the technology platform by eliminating point-to-point integrations, and accommodate mobile access. Be sure to point out that your company will save money on major CAPEX costs (we’ll address this below) by eliminating complex and time-consuming upgrades. It’s also important to point out that leading technology companies are investing most of their R&D in cloud offerings. This means that if you stay on a legacy ERP solution, your organization may fall further behind the innovation curve.
- Avoid Infrastructure Investments – In all likelihood, if your company needs to modernize your ERP applications, you probably need to update your technology infrastructure too. Here, the rationale for moving to the cloud is quite simple and very compelling for CFOs and CIOs. If you transition to the cloud, you no longer have to purchase and maintain hardware; the cloud vendor manages the hardware, including patches and upgrades. Instead, your infrastructure costs shift from expensive capital expenditures and associated IT administrative labor costs to monthly subscription fees.
- Mergers, Acquisitions & Divestitures – If your company wants to execute an MA&D growth strategy, cloud technologies will facilitate that effort. With Oracle ERP Cloud, you can spin up a new entity in a couple of weeks vs. the months or years it can take with an on-premises EBS instance. Likewise, because cloud solutions require the systems to maintain their inherent data structures, you can integrate and consolidate two merged entities in a couple of weeks. This message will be particularly appealing to the CEO and CFO—because MA&D strategies can be executed rapidly, reducing risks to the businesses and increasing profitability.
- Entering New Markets/Global Expansion Strategies – Similar to the speed with which your company can acquire or divest a business entity with Oracle ERP Cloud, it can also easily set up a new cloud ERP instance in a new market in just a few weeks. Because Oracle ERP Cloud has pre-packaged capabilities, such as country-specific financial and tax functionality as well as accommodations for 28 languages, you can capture first-mover advantages and meet aggressive global growth goals.
- Shared Services – A cloud solution is ideal for companies that want to establish a shared services model for accounts payable or procurement functions. Companies can set up a centralized procurement process in Oracle ERP Cloud with vendors that have been vetted, that offer standardized pricing, and that include purchasing controls. The different business entities can purchase goods independently via cloud ERP. This same scenario can apply to many other back-office functions. As the different business entities work from the single, centralized, shared cloud-based model, the workload is simplified.
Making Your Pitch
Once you have your message solidified, let’s talk about a strategy to approach your management team.
- Get both finance and IT teams on board. ERP is primarily a finance and operations platform, but it also connects to all other areas of the business. These underlying connections will need to be addressed when moving to cloud, and your IT team will play a critical role in this. You might also want to enlist the help of a consulting partner to help with the rest of the steps on this list.
- Do your homework and be prepared. If you’re going to ask for time on the calendar of an executive or the entire C-level team, you can’t show up and wing it. Create an architectural roadmap and a solid presentation that outlines your reasoning and plan for moving to the cloud.
- Explain the business benefits of cloud. During your presentation, be sure to relate these high-level benefits to the specific challenges that face your organization.
- Map out a high-level technology transition plan. Since EBS is a core platform for running your business, it’s of the utmost importance that you have a clear roadmap so there’s no disruption to the business. Therefore, you need to carefully weigh the different options to transition to Oracle ERP Cloud. Does it make sense to move your EBS applications all at once in a “big bang” … or follow a phased approach … or possibly start with a small pilot project to test the waters and validate your argument for cloud … or go with a hybrid solution with some applications in the cloud and some on premises? Your executives won’t want to get into the technology weeds, so keep it relatively high-level and recommend the approach that is right for your company. With that said, don’t forget these elements: the rationale for your preferred approach, a summary of your current state, and an outline of your ideal future state.
- Understand the cost implications of moving to cloud. This is where you need to be familiar with capital expenditures vs. operating expenditures (CAPEX vs. OPEX) and how the shift from on-premises EBS to Oracle ERP Cloud will impact your company’s financials. Typically, a major on-premises technology deployment or upgrade requires a sizable capital investment. With most cloud implementations, the large capital expense goes away and instead shifts to a monthly subscription operating expense. Depending on the technology transition plan you propose, your project budget may include both CAPEX and OPEX costs.
- Think through a transition plan for user adoption. The key question here is whether your organization is ready to move from legacy EBS applications to Oracle ERP Cloud. Will your employees need a lot of communications about the change, will they need training, and what support resources will you need to help your employees when they have questions or issues? As you think through the situation with your organization, map out a high-level plan to drive user adoption.
It’s no longer a matter of whether an organization should move to the cloud, but when to make the move. Upgrading your applications is not as complex as it used to be. Cloud computing delivers on the promise of modernized, streamlined processes, a simplified IT infrastructure, and new opportunities for growth. Realizing that the massive, expensive on-premises implementations of the past left scars that some executives carry even today, I hope this strategy and list of key business benefits can help you make a case for moving your EBS system to Oracle ERP Cloud.