Subscribe

Share

Cloud Computing

Shift, or Fall Further Behind

Disintermediation looms large for companies late to the cloud.

by Margaret Harrist

September 2016

 

For those IT organizations plugging along on outdated software and counting on their competitors to do the same, Oracle Executive Vice President of Applications Development Steve Miranda has a wake-up call: businesses are moving to the cloud in a big way.

“We’ve almost crossed the threshold where Oracle Cloud customers have done more upgrades to their cloud applications than all of our on-premises customers in all of our lines of business have done ever,” says Miranda.

Quite the bold statement, but consider this: Oracle’s applications development teams are delivering two upgrades a year for each of their cloud offerings across enterprise resource planning (ERP), human capital management (HCM), customer experience (CX), and supply chain. From large enterprises to small and midsize businesses, all of these cloud customers are doing upgrades every six months.

Ticktock

Most companies recognize that many of the on-premises applications they’re using to run their business don’t have the capabilities they need—and that they perpetuate predigital-era business processes.

“I talk to leaders of a variety of companies—from startups to some of the largest businesses in the world—and the main issue they’re concerned with is responding to the speed of change and the disintermediation or the potential disintermediation to their businesses,” Miranda says.

If you think about the speed of change going on in business today, and the implications of two upgrades in a decade versus two upgrades a year, the opportunity that cloud presents for business is dramatically clear—as is the risk for those not moving toward the cloud.

Of course, Oracle is not immune to that disruption. No company is. But Miranda sees Oracle’s longevity in the applications development world as a distinct advantage in the cloud era. Which may seem counterintuitive: if you wanted modern applications geared to today’s digital business world, wouldn’t you look to newer, cloud-native software vendors?

While we’re going to continue to invest in everything our customers need in their on-premises applications, we feel very strongly that the cloud is clearly a superior delivery model.”–Steve Miranda, Executive Vice President, Applications Development, Oracle

“Our close connection with our customers over the years in areas such as finance, HR, procurement, and supply chain has given us a deep understanding of the challenges they face and the requirements they have,” he says. Oracle’s applications development teams “have the advantage of a huge, global installed base and the resulting technical knowledgebase of what has worked for customers in the past, [and] what hasn’t worked.”

Moving to the Cloud

Companies take a variety of paths in moving business areas to the cloud. For some, it makes sense to move an entire area—such as ERP or supply chain—in a subsidiary and then roll it out across the greater organization. Most begin their transition to cloud-based applications in a single area (such as sales automation or procurement).

Whichever approach makes sense for a business’ operations, Miranda stresses the importance of keeping the entire suite in mind. “Companies that start by moving one of the functions within ERP to the cloud, for example, should pay attention to how that function interacts with other ERP areas,” he says. “These integrations within ERP, as well as the integrations between ERP and supply chain and marketing, are critical for a digital business.”

Another critical factor in deciding the right path to the cloud for a company is its cultural ability to change. Companies’ established and deeply ingrained business processes are likely a product of years of application customization and reinforce siloes that are anathema to digital business operations. Reviewing those current processes is a critical step to understanding the change management issues that come with moving to the cloud.

“Companies have typically built up baggage as their systems have evolved and as they have evolved,” Miranda says. “Smaller businesses have an easier time making a complete move to the cloud because they have a relatively clean slate. By thinking in terms of suites and how those suites are connected, they can eliminate the need for integrations to start forming and prevent that baggage from starting to build up.

“While we’re going to continue to invest in everything our customers need in their on-premises applications, we feel very strongly that the cloud is clearly a superior delivery model,” Miranda says. “The benefits of the cloud in terms of cost and future-proofing the business from a pure technology perspective—in addition to the speed at which we can deliver new features and capabilities that keep organizations up to date—enable our customers to be far more agile and innovative.”

Action Items

Photography by Shutterstock