By Mike Martin and Jeff Haynes, Strategic Cloud Services Baker Tilly
Time moves swiftly in the IT world and if you’ve been around for a while like me, you’ve seen everything from the mainframe and client/server stack to the internet, mobile, Web 2.0, and social media. Each of these technologies has made its mark and raised the expectations organizations have for their systems.
The past decade and a half have marked the dawn of a new era in cloud computing, with many enterprises moving their back-office finance, HR, supply chain, and project management applications into software-as-a-service (SaaS) or cloud solutions. The cloud model provides numerous business agility benefits for the customer, including taking advantage of a subscription model tied to resource usage and offloading application management and updates to the vendor.
The adoption of cloud also enables better business decisions, especially with increased data creation that allows organizations to move beyond manual analysis. Many organizations have turned to big data, machine learning, and artificial intelligence applications supported in the cloud to do the number-crunching, ushering in the cognitive era.
Unified platform software and cognitive era technologies are especially helpful in uncertain times as businesses find themselves quickly adapting to change. In this blog, we’ll explore how to best adopt such a technology posture and considerations to make along the way.
Software solutions in the client/server and web 2.0 era were on-premise and customers would often maintain multiple vendors through a “best of breed” approach through their datacenter. For example, it wouldn’t have been uncommon to see SAP for financials, supply chain by JD Edwards, and HCM by PeopleSoft, as each was considered the best and most robust for their category. However, this approach created silos due to the difference in technologies and necessitated the development of integrations.
For organizations that did attempt an enterprise software implementation, they soon discovered that customization was a barrier. Vendors would often try to close the gap with catch-all tools that promised to meet the individual needs of customers, but this would often result in very costly and long implementation cycles. As their systems of disparate, full visibility and analytics were also difficult to attain, further eroding business value.
If a company was lucky to make it past implementation, its next obstacle lay in hardware. Companies made significant investments in hardware, infrastructure, integrations, and internal IT departments—all of which were expensive to maintain. With IT departments asked to make do with static budgets and do more with less, employees were often constrained and even simple tasks such as asking for a new report meant filing a support ticket or project for the IT department, which took extra time and effort.
Ultimately, much of this business approach was guided by the idea of “doing business the way we have always done it”. Even as the cost of implementation or upgrades rose, leaders sought to make their software conform to current business practices rather than the other way around, with marketing messaging for traditional on-premise ERP and HCM solutions centering around the ability to be “customized”. In reality, the harder leaders tried, the more eroded their return on investment became.
Don’t feel bad if what I’m presenting here as history describes your current systems. In truth, there are many organizations today that are still running on-premise software and experiencing what I’ve described above. While not every single on-premise implementation suffers from these issues, many are beginning to wear out and become more expensive to maintain. There is a much more effective and efficient way for maintenance.
The subscription model for SaaS solutions provides greater value, as platform updates, patches, functionality, and fixes are the responsibility of the vendor. Combined with shorter upgrade cycles and years of experience in their respective fields, customers can enjoy peace of mind knowing that they will up to date with their technology. Thus, configuration—and not customization—is readily available and users can simply get down to business.
In more recent times, vendors have decided to approach software challenges by building unified platforms, which provide both technical and functional advantages in the face of rising customer expectations and business velocity. Compared to the “best of breed” approach we mentioned earlier, there are fewer customization costs and complex integrations involved. Instead, customers enjoy simplicity, streamlined capabilities, and easier decision-making. Leaders must maintain the key foundational elements to make the transition seamless, including addressing legal entities, business units, departments, cost centers, and more.
The first benefit of a unified vendor platform is a vast reduction in custom integrations. Integrated cloud software such as Oracle Cloud provides one common data model across ERP, SCM, CX, EPM, and HCM. Implementing one cloud across these pillars means that point-to-point integrations are no longer required. For example, there exist at least 43 integration points between ERP and HCM alone. Building and maintaining customizations would easily cost $1.5 to $2 million, but a unified platform eliminates that line item—providing peace of mind, especially in uncertain economic times.
Second, unified systems offer greater security in our current data-breach heavy world. With the cost of data breaches in the millions, vendors are offering integrated support that reduces overhead and the need for third-party solutions. The unified configuration of your organizational and enterprise structure within a SaaS environment provides clear hierarchies to facilitate consistent governance, business processes, approvals, workflows, onboarding, and off-boarding. Before go-live, this process transformation should be in place to avoid chaos and confusion.
Third, a unified platform creates a single data source and reporting solution, which encourages self-service through one common login, drives efficiency, simplifies training, and enables users to build and deploy their reports—all at a lower cost. Oracle Cloud software, for example, allows for reporting across functions and contains a large library of pre-built reports that are easily understood by HR, finance, and line of business users. Such a setup enables enterprises to easily focus on insights and strategic vision and it is my strong belief that standardizing enables a more cohesive digital transformation strategy.
As we head into the transition period between the cloud age and emerging technologies in machine learning and cognitive computing, it’s important to consider how these solutions will fit into your technology posture. Moreover, thought is also required concerning how a team wants to deploy its software solutions.
One methodology is moving towards a unified system—or a single cloud paradigm. In contrast to traditional on-premise deployments, this new way promises to lower costs, encourage better business decision-making, and drive better organizational processes—all necessities in today’s rapidly evolving economy.
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For more information on Oracle Cloud HCM, visit our website.