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Part 2: Oracle E-Business Suite ERP optimisations to last a Decade.
- The current climate has accelerated the rate of change and crystalised the need to do more with less.
- Hitting the pause or cancel button on technology-led ERP transformation roadmaps is not an option if you want to survive and compete in the prevailing challenging economic climate.
- Approaching ERP retention or replacement as mutually exclusive strategies is not good. Through adopting a number of short-term, incremental changes that deliver early value realisation you can achieve material cost and efficiency savings.
In this 2nd post of the series, we continue by discussing some of the tangible actions that will protect and extend your investments in Oracle E-Business Suite, move you forwards and enable a successful transition to SaaS ERP at a time that is right for your enterprise.
Firstly, let's just correct a misnomer: E-Business Suite has not been rendered obsolete by Oracle Fusion, or other ERP SaaS offerings, quite the contrary. When Oracle announced 'Fusion Applications' in 2009, it represented not just a vision for the next-generation of cloud applications, but marked the inception of a program to incorporate many of the best features from the traditional 'install base' product lines (EBS, PeopleSoft, JD Edwards, Siebel, etc.) into the latest product streams under Oracle Applications Unlimited: thus enabling customers to embark on a journey of business process optimisation, system consolidation, master data management, and standardisation, whilst still continuously benefiting from enterprise-grade functionality at applications, middleware and database levels.
It is of no real surprise then, to read of organisations operating older non Applications Unlimited releases, who gloss over critical incremental readiness steps under the auspice of 'saving money', catastrophically fail to jump the Grand Canyon that they have created from such a very short run up. This outcome is reflected in the findings in many independent studies, which cite factors unrelated to the ERP software product as the reasons for failing to achieve transformational goals. The core factors across the spectrum of outcomes (between no/low value realisation to complete failure), include: inappropriate methodology selection, lack of communication, inadequate business planning, poorly defined business goals, and underestimation of enterprise resource commitment. This can be exacerbated by pushing through a SaaS-first strategy before either the business or its processes were ready for SaaS, or SaaS was not mature enough for deployment into that specific organisation at that time.
Enterprise growth creates challenges and opportunities: Hitachi observe organisations adopting reactionary ERP strategies that rarely align to any strategic goals. As Hitachi's Financial Services Digital Transformation Director, Sara de la Torre, points out: "Projects are failing due to the inability of companies to adequately tackle the spiralling costs created from operating multiple siloed ERP systems and this is why ERP transformation must be approached as a foundation stone of true digitalisation". Tactical changes to eradicate silos, sprawl and costs can be highly effective but they must align to the strategic business view and are best tackled as a pre-cursor for SaaS adoption, not bitten off in a single large bite.
This tells us that a well-defined, incremental approach to ERP strategy is key to achieving successful outcomes. The lack of a clear strategy is ultimately why almost every organisation has similar goals but achieve very different outcomes.
Successful ERP transformation programs are ultimately achieved when the business and IT departments come together, with overarching executive sponsorship, to enable a program of strategically aligned change that translates the business vision into tangible, quantifiable outcomes. Critically, many organisations do not put an adequate framework in place to suitably measure the business value delivered.
Ultimately, there are then three key questions that need to be answered:
- How do you effectively eradicate existing legacy technical debt (primarily hosting & architectural constraints and costs) in the short-term to do more with less?
- What tangible actions can you take to protect and extend your past ERP investments that enable a low-risk transition to SaaS ERP at the right time for your business?
- How are you going to measure success?
To answer these, you need to have:
- A detailed understanding of where your current costs lie
- Well-defined business goals and business assumptions
- Consensus on your critical success factors
- A method to quantify the outcomes from your key performance indicators (KPIs).
The graphic below is an illustration of how one Hitachi customer approached their understanding, aligned to business goals that were important to them. Ultimately their aspiration was to embark on an ERP journey that would decouple technology-led change from business process re-engineering, with the objective of achieving 5 primary outcomes in a six month timeframe, namely: resolve immediate capacity and architectural issues to enable business continuity, consolidate billing and revenue management instances, increase automation, exit a costly data centre hosting contract, reduce management costs and achieve SOX compliance.
Finally, let me debunk the recurring myth that "cloud security is just not as good as we have on-premises". This misnomer is usually peddled by well-intentioned individuals concerned with self-preservation and job security. However, the reality is that as far back as 2018, KPMG's Cloud Threat Report stated ~83% of CIOs rated cloud security as good or better than on-premises. I am sure British Airways & Marriott who were fined ~£300m between them by the ICO in July 2019 for customer and payment data breaches, would be inclined to agree. Next-generation Cloud Service Providers such as Oracle have invested heavily in security capabilities that underpin their hosting services, which far exceeds the financial constraints of most individual enterprises. Of course, cloud security is not immune to human error: just ask organisations such as the Pentagon, Netflix and Dow Jones, all of whom are well-documented to have leaked sensitive data residing in open or insecurely configured AWS S3 storage buckets.
In conclusion then, you already own EBS and it can be made to work harder for you. EBS 12.2 is the product of over 25 years and millions of man hours of development, highly mature, performant and continues to offer vendor-backed enterprise-grade functionality across ~250 modules.
In keeping your applications current through Applications Unlimited you retain control of your applications strategy and able to avoid technology change cascading consequences into business processes and the business-user community. This enables business-led initiatives to focus on adoption of industry-standard processes, user journeys and workflows and safely become a cloud-native success story rather than the next bad headline.
There are numerous courses of protective actions available that enable you to execute short-term ERP optimisation goals in harmony with a longer-term cloud-native SaaS adoption strategy: they're not binary choices, rather work together to enable a process of continuous innovation. Tangible steps can be taken to eradicate technical debt, consolidate application silos and address data quality. Strong execution with an expert partner like Hitachi will deliver key business outcomes such as a significant reduction in cost of ownership, enhanced business continuity, data sovereignty, and mitigate the risk of incurring financial penalties through improved regulatory compliance.
REGISTER for our forthcoming webinar where we will delve into the business case and explore real-world cost savings that can be achieved.
Hitachi Vantara have successfully migrated numerous E-Business Suite ecosystems of all releases (11, 12.1 & 12.2) to Oracle Cloud Infrastructure and other public cloud IaaS offerings. With OCI, it's fast, low-risk and highly predictable.