The Case for Cloud ERP – The SAP Partner Perspective
The last 30 years have seen an enormous shift in how business is transacted across the globe, and the best example of this shift is the growth in the import/export economy. According to the World Bank, at the dawn of the ERP market in 1990, the total value of imports and exports in the global economy was $2.7 trillion. Fast forward to 2021, and despite the turmoil caused by the pandemic, the total value of global imports and exports was $46.1 trillion. And with this growth, has come complexity and challenges.
Running at the speed of business
But it’s not only the volume that has changed, but also the speed of change. You only have to look at the 600+ (and growing) ESG regulations, the plastics taxes popping up in Europe, or new business models such as as-a-service that are spreading across industries, to see that the “clock speed” of business is increasing. And this means that the enterprise systems that support these organizations also have to adapt and change at the speed of business. As Martin Barkman stated in a recent Future of ERP podcast, “this really calls for a new approach to ERP systems and how they should ultimately drive a company’s business. Companies need to think about how to be more agile and how to be able to adapt and adjust to new business models that they want to deploy. And often to do that means that you must be in a position to take advantage of the latest and greatest in terms of innovations”.
The benefits of this approach were highlighted in a recent interview with Robert Wickel from Accenture who explained “organizations need to acquire the agility and resiliency to stay relevant, to compete effectively, and to ride the next wave of change in order to create superior shareholder value”.
The challenges of traditional ERP systems and implementations
When I started as an implementation consultant thirty-plus years ago, the industry was focused on selling highly customizable ERP systems. Customers were empowered to take standard business processes and add any functionality they wanted on top. This led to a massive amount of custom code and many of the issues we’re seeing with on-premises ERPs today, such as complex and costly system upgrades and an inability to take advantage of new software innovations.
This customized approach also means that companies lack the agility to respond at the speed of business change as they are often stuck on older released of their ERP system. This often means that they do not have the capabilities to incorporate a new business model, comply with the latest ESG regulation, or innovate to differentiate themselves from the competition. As Elaine Parr from IBM explained in a recent interview , “companies need to work out how to maximize innovation, how to drive standardization, and how to leverage leading technology like cloud and AI”.
The case for Cloud ERP and a Clean Core
The emergence of cloud over the past few years has fundamentally changed how we approach ERP and business systems.
As the pace of innovation continues to accelerate, companies are finding that a modular cloud ERP, with integrated business models and real time business data, enables them to easily keep their systems up-to-date and put the latest innovations, like compliance with latest regulations, and AI and process automation, to use much quicker, helping them differentiate and gain a competitive edge in their industries.
Your ERP is the core of your business. It needs to be collaborative, intelligent, networked, and sustainable. It brings together your people, systems, and processes so you can run your business effectively. But when your ERP system is cluttered, customized and complex, it’s not very adaptable to change.
And change appears to be the norm these days, as the needs of your business are shifting more frequently than ever before. Whether it’s fragile supply chains, economic uncertainty, political and financial disruption, workforce shortages, or skyrocketing energy costs—businesses can’t afford to have inflexible core processes preventing them from quickly shifting resources where they’re needed most.
Businesses today are also presented with more and more opportunities to leverage cutting-edge technology. Generative AI is the most recent example. In a matter of months, it has become a business reality, and companies who are sitting on ERP systems that require multi-year upgrade cycles are simply missing an opportunity to get out in front and capitalize.
A clean core is an ERP system with processes that are as close to standard as possible, while running cloud-compliant extensions and customizations. It has a centralized database that is accessible and relevant across your business, from finance, human resources, supply chain, customer relationship management (CRM), production, and other critical aspects of the organization. It provides real-time and accurate data to support decision-making and enables seamless communication and collaboration across different departments. Having a clean core allows you to adapt your system to changing business requirements and to adopt new capabilities.
As Sachi Dubey from TCS stated in a recent interview , “A clean digital core enables an ecosystem of interconnected applications to explore low code, no-code capabilities, business process and workflow automation”.
The Value of Partners
In a recent article, SAP’s Eric van Rossum discussed several new offerings to help customers maximize the benefits of cloud technology.
Partners are endorsing this “Case for the Cloud “and are eager to support companies on this digital transformation.
Watch additional testimonial videos from many of SAP Partners on how they address customers’ challenges, bring innovation and agility to mission-critical processes in the cloud:
- Hear how Accenture and SAP help customers to drive enterprise transformation at the next level.
- Hear how BearingPoint is helping customers transform their businesses with the help of RISE with SAP, particularly in sustainability and AI solutions.
- Hear how BlackLine help companies streamline their financial close with SAP.
- Hear from Deloitte on how they and SAP help customers identify business opportunities by moving to RISE with SAP on a clean core.
- Hear from EY and their partnership with SAP and how they are working together to help customers on their journey to the cloud.
- Hear how IBM and SAP apply their combined expertise in Industry, Cloud and Architecture to enhance and accelerate the benefit of RISE with SAP.
- Hear how Icertis Contract Intelligence leverage the power of Gen-AI combine with SAP’s S/4HANA and BTP to ensure consistent data across the system.
- Hear how msg global solutions AG, leverage RISE with SAP to help companies across various industries achieve business transformation while prioritizing sustainability.
- Hear what TCS and SAP can offer in your enterprise-wide transformation.
- Hear how Tricentis support SAP on software quality assurance on your cloud move.
Also, check out a new blog that showcases the excitement across SAP’s ecosystem about RISE with SAP.