Enterprise Resource Planning Solutions

IBRSiQ is a database of Client inquiries and is designed to get you talking to our advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

Conclusion:

The choices when selecting and designing an enterprise resource planning (ERP) solution are immense and typically require industry-specific considerations. Executives rightly desire fully-integrated IT services across all departments within an organisation. The end result is a reliable, fully-integrated, and secure solution whether it is deployed in a public or hybrid Cloud solution.

What should not be up for negotiation are the essential, machine critical controls (CCs) that maintain the effectiveness and security of this critical asset during normal business operations. In all, IBRS previously addressed the 10 human-facing CCs1. In this research article, the focus is the remaining 10 machine CCs.

The Latest

12 August 2021: TechnologyOne released a significant report based on a six-month long study into the economics of Cloud computing and SaaS among Australian organisations.  

The study, which was independently conducted by IBRS and Insight Economics, explored the tangible costs associated with migrating to the Cloud, with both IaaS and SaaS journeys investigated. An economic analysis of the data collected through 67 in-depth case studies with CIOs and C-suite executives, additional interviews, and over 400 respondents, revealed a $224bn economic dividend for the Australian economy, prompting TechnologyOne to term the report "too big to ignore".

Why it’s Important.

While the report is aimed at policymakers and strategies looking at the macro-economic impact of technology, it also details the costs and benefits of Cloud adoption by industry sectors, providing IT strategists with realistic benchmarks. 

When developing the methodology for the report, IBRS and Insight Economics took a ‘no free lunches’ approach to data collection. Unlike other reports on the benefits of Cloud migration, the study took into account the costs of, and time needed for transition, including training, change management, skills (and skill shortages) and the fact that many organisations will need to retain on-premise environments to support legacy and home-grown applications for years to come. In addition, only productivity benefits that had been measured were included in the analysis. 

As a result of the evidence-only approach to the study, the ‘direct returns’ on Cloud migration detailed in the report are both far lower and far more realistic than those found in studies conducted in the USA and Europe.

The report may be accessed here: https://toobigtoignore.com.au/

Who’s impacted

  • CEO, COO, CFO, CIO
  • Cloud migration teams

What’s Next?

The conservative approach to the study, the rich data collected, means that organisations still struggling to make a business case for SaaS have practical benchmarks and economic modelling to call upon.

Related IBRS Advisory

  1. The economic impact of software as a service in Australia
  2. Get board agreement to the Cloud strategy

The Latest

3 August 2021: Salesforce has announced an agreement to acquire Servicetrace, a robotics process automation vendor. This marks another milestone in Salesforce’s strategy to deliver enterprise SaaS solutions surrounded by a mesh of low-code process automation and integration. It is also evidence of how the previously disparate markets for low-code application development tools, RPA, process mapping, and integration tools are consolidating into a service mesh that goes beyond process digitisation. In this case, when coupled with enterprise SaaS, the sum is greater than the parts.

Why it’s Important.

In the IBRS trends report for 2021-2026, a fourth-wave of ICT was detailed. The crest of this wave is the rapid consolidation of low-code, process mapping, RPA and (soon) rules engines, and AI.  

However, IBRS case studies with scores of executives involved in Cloud migration strategies, suggest that many organisations ICT groups are resistant to the coming wave. This is mainly due to sunk costs in on-premises software and infrastructure, the difficulty in justifying costs of integrating disparate systems and, at least to some degree, concerns over losing control or lacking skills to manage core infrastructure.

The cost of integration coupled with the need for digitising manual processes is currently a real economic barrier. Financial modelling suggests that the labour and costs of integrating disparate (on-premises and Cloud) solutions can destroy the return on investments for Cloud migration in the near to mid-term (1-5 years). This is especially problematic for industries with a complex mix of specialist enterprise solutions, such as healthcare and utilities. 

Who’s impacted

  • CIO
  • Development team leads
  • Business analysts

What’s Next?

Organisations that have previously rejected Cloud migrations due to not being able to make the financials stack up should consider re-evaluating the decision in 2022, taking into account the potential of buying into a mesh ecosystem that unifies low-code, workflow, process mapping, RPA rules engines and possibly AI services and that supports SaaS enterprise solutions ‘out of the box’.

Enterprise architects should also consider a shift towards a fourth-wave of ICT will impact their organisation’s ICT architecture and, if needed, begin planning to evolve to a new environment.

Related IBRS Advisory

  1. Hammering Low-Code into Place Takes Time
  2. Mulesoft Believes it Can Accelerate Digital Customer Experiences on SAP
  3. Salesforce introduces Hyperforce
  4. Salesforce Einstein automate

Conclusion:

The choices when selecting and designing an Enterprise Resource Planning (ERP) solution are immense and typically require industry specific considerations. Executives rightly desire fully-integrated IT services across all departments within an organisation. The end result is a reliable, fully-integrated, and secure solution whether it is deployed in a public or hybrid Cloud solution.

What should not be up for negotiation are the essential, human-facing critical controls (CCs) that maintain the effectiveness and security of this critical asset during business operations. In all, IBRS sees organisations needing to address 10 human-facing CCs from a group of 20 CCs. The remaining 10 CCs will cover the technical controls later in this research series.

Conclusion

For organisations when there is stakeholder agreement the enterprise resource planning (ERP) solution has failed to meet business needs, act decisively to turn failure into success. Management must also be proactive, and act when the implementation cost has been fully amortised and deemed past its use-by date, or when vendors providing SaaS ERP solutions have not met their contractual and service delivery obligations. In all situations, it is important to be proactive and tell executive management what is being done about it.

Conclusion: Agility to respond to change has become essential. Compared with previous years, CIOs are expected to produce results over longer periods of time, now expectations have become much higher. Stakeholders are expecting results as soon as possible. With the trend geared towards an increase in technology dependence, the pressure of delivering results has therefore increased for CIOs and IT leaders.

Part of this new set of expectations is improved efficiency and productivity, which in most cases requires a thorough evaluation of business processes to garner potential inefficiencies. One of the primary tools organisations have at their disposal is the enterprise resource planning (ERP) systems. Eventually, it all boils down to whether or not the migration to S/4 HANA can be justified in terms of value-add-services. Implementation effort and run costs are only a part of the business case, not the whole.

Conclusion: SAP ECC on-premise versions required ownership of ERP infrastructure and multi-year licensing. The business cases for such investments considered ERP systems essential to remain competitive in IT service industries, logistics and resource-intensive sectors.

The next stage of the SAP journey recognises that Cloud infrastructure associated with S/4HANA can remove the large capital investment and reduce operating costs. Even with this infrastructure saving, the data migration risk remained with CIOs looking to identify a reliable data migration method. Any data migration considered to be high risk should be avoided in the current environment. Many are unfamiliar with the best method to migrate from on-premise SAP solutions to SAP S/4HANA in the Cloud.

SAP and its partners are now making this data migration journey not only more transparent but achievable in a timeframe that is measured in months not years. This is being achieved through Cloud platforms that can interrogate and integrate legacy data, then present migration paths in real time whilst retaining the data integrity before, during and after the migration.

IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.