The pandemic confirmed what senior executives already feared: legacy ERP systems are meant for a predictable world that is quickly disappearing.
Every new economic shift, regulatory requirement, and disruption from an emerging competitor brought a level of concern that their organization was too slow, too siloed, and too bogged down with complexity to deliver as expected. And if their organizations couldn’t proactively anticipate future change for themselves, their partners, and their customers, the business couldn’t innovate, compete, and win in bold ways.
The pressure for change has been building for years, prompting 33% of our ASUG membership to migrate to a modern Intelligent ERP. However, this is only the first step in achieving the heightened system and data connectivity, lower transaction costs, and process automation that the technology promises. Business applications, data, functional workflows, and processes still need to be integrated to create an organizational structure that is flexible, agile, interconnected, and ultimately more human.
Cloud ERP is made for integration
Migrating ERP capabilities and data to the cloud with a self-paced approach focused on unique needs and vision has become a reflective reassessment of their transformation journey for organizations. After years of incrementally enhancing their ERP system with third-party and homegrown applications, databases, point solutions, add-ons, organizations are discovering the actual cost of running such a massive landscape.
For example, the U.S. federal government spent 80% of its IT budget on operations and maintenance of aging legacy systems in 2019, posing significant challenges in efficiency, cybersecurity, and risk mitigation. Meanwhile, only 20% was left to fund development, modernization, and enhancement – everything the public sector needs to satisfy ever-changing constituent needs, policy requirements, and information support demands.
While not every organization has the same experience, this hidden cost of legacy software highlights how a cloud ERP migration can bring an opportunity for change that doesn’t happen often. Supporting end-to-end integration in a landscape of on-premise and cloud application and data sources enables the connected intelligence, fast action, employee empowerment, and innovation that most senior executives realize was missing in the past.
Access to prebuilt integration content in a self-service API business hub allows organizations to determine which technologies, interfaces, workflows, and processes are relevant or have outlived their purpose. This step in the overall migration accelerates the technology and data integration needed to run a fully operational cloud ERP with less risk and cost.
For organizations looking to modernize their tactics for addressing their long-brewing challenges of patching, scalability, and throughput, integration can become a critical edge in their IT operations. Technology implementations often contain upwards of 250 custom upgrades that can cost the business on average $750 each, according to a Forrester total economic impact study. But when integration becomes standardized, businesses are only encouraged the customize capabilities where it matters most – which can be a welcome improvement for IT budgets.
This approach is enabling companies to implement business processes based on modern technologies and market expectations. Take Harrod’s Limited, for example. The upmarket department store leveraged integration capabilities to standardize the unification of SAP and third-party technologies through a searchable and published set of APIs.
Following a modern, industry-standard approach to security and authentication, Harrods offers and consumes advanced technologies. The retailer has recognized Internet protocols and schema validation and implemented oAuth and API policies. This flexible architecture supports the business to scale rapidly to meet business demands, while the cloud technologies come with built-in resilience, automated patching, and monthly upgrades.
Reinvention through interconnectedness and simplicity
While companies shouldn’t expect old ways of getting work done to be relevant for today’s business environment, there are opportunities to turn acquired information and capabilities into something radically better. And prioritizing integration across all applications and data sources, whether on-premise, in the cloud, or across both landscapes, makes a case for reinvention and bold action clearer for companies worldwide.