American Sugar Refining

Is it obvious to say migrating an enterprise resource planning (ERP) system to cloud hosting is a complex undertaking that requires careful planning, execution, and a new mindset? Not many would say otherwise, and the fact that hundreds of articles are written on the subject proves the point. There are many factors to consider that are technical, while others have nothing to do with coding. The 80-20 rule is applicable where tackling 20 percent of the migration factors addresses 80 percent of the complexities. The 20 percent can be summed up with just a few key considerations beginning with the common alignment.

Before commencing the migration process, it is imperative to harmonize the migration strategy with the organization’s overarching business goals and objectives. Factors to be considered encompass comprehending the underlying reasons driving the migration, the anticipated advantages to be gained (including enhanced scalability, cost efficiencies, and improved accessibility), and the congruence of the migration with the organization’s longer-term IT and business strategies and roadmap.

The roadmap is not just IT; it touches many aspects of the business. As such, one formidable facet of ERP migrations, or any ERP-related transformation, is engaging, agreeing, and securing user and management buy-in.

Communication is an essential cornerstone of a successful migration. An org chart and a RACI are excellent tools for mitigating the risk of miss-communications or missing key staff and stakeholders. Communication serves as the glue that binds together team members, stakeholders, and all involved.

Much like individuals discard unnecessary, faulty, and outdated household items when moving homes, the process of migrating ERPs presents an opportunity to replicate this approach on a digital and organizational level. One of the notably intricate tasks involves striking the right balance between retiring obsolete components, reconfiguring functionalities, and seamlessly transferring data from the old system to the new. The choice between retiring systems and duplicating certain or all elements during the migration hinges on multiple considerations, including the inherent characteristics of the systems undergoing migration, business imperatives, technical feasibility, cost evaluations, scheduling constraints, and, notably, the willingness of users to invest time in purging historical data and modifying workflows. If time permits, it is advisable to thoroughly streamline the ERP’s data in accordance with the project’s timelines.

Security and compliance considerations can be significantly different on the target hosting environment. Careful evaluation must be given to the new functionality and security measures protecting data from theft, loss, and manipulation. Question every aspect of data regulations (such as GDPR, HIPAA, etc.) because what may have been in a single geographic area may be traversing geographic boundaries. Review encryption and decryption carefully to avoid locking out yourself; verify certificates and keys before any moves are considered. Many organizations let their guards down during the migration process for expediency, which may lead to unauthorized access to private or sensitive information.

Lift and Shift, or Rehosting entails migrating the current ERP system to the cloud with minimal adjustments. This approach offers swifter migration but might not harness the full array of cloud-native capabilities or, in some instances, might encounter compatibility challenges. The sensitivity of databases to their hosting environment is a critical factor to consider. It is worth noting that the migration could involve a transition from a dedicated single-tenant environment to a shared public environment. In shared scenarios, the service provider must uphold Quality of Service (QoS), which often involves implementing resource consumption controls, commonly called throttling, to prevent one tenant from monopolizing all available resources. This may become problematic for specific databases that rely on unfettered access to infrastructure resources; for instance, SQL tends to consume all available memory unless restricted.

While the connectivity between servers and databases might seem consistent between cloud and on-premises configurations, this isn’t always the case. Cloud providers exert stringent control over throughput, potentially affecting overall performance. Enterprises migrating to the cloud could inadvertently counteract the very benefits of a public cloud environment if they need to invest in dedicated resources, thus negating the cost-efficiency advantages initially sought.

Refactoring or rebuilding can optimize the ERP system to fully leverage the cloud services and resources, but time and money will be needed to accomplish this. Building to use cloud-native services offer the primary power of clouds: scalability, elasticity, and flexibility.

Ensuring compliance with licensing agreements is crucial to avoid legal and financial issues. Many software licenses are based on CPUs, core’s, servers, and users. Moving to a completely different infrastructure will impact licenses, and therefore it is paramount to fully engage suppliers and understand the impacts. Maintenance contracts may no longer hold on the cloud and may result in additional costs to terminate existing or potentially unavailable in the new environment.

While contrasting the hosting of an ERP system on-premises with its deployment in the cloud reveals several distinctions, certain administrative aspects exhibit a degree of consistency across both settings. Considerations such as capacity management, monitoring, backup, and recovery, as well as data refreshes, for instance, maintain a semblance of similarity. Nonetheless, a common misstep among companies involves assuming that the cloud provider will seamlessly replace the roles performed by seasoned IT data center and cloud experts, potentially leading to unwanted surprises such as system failures. The public cloud significantly departs from other hosting landscapes, boasting near-boundless resources and remarkable flexibility. The focal point transitions from the challenges of optimizing data and application performance to managing sprawl and cost containment. While the migration process might be a one-time event, the ongoing refinement and optimization are perpetual endeavors. In a state of constant evolution, ERP systems mirror the ever-changing nature of cloud platforms, encapsulating the contemporary notion that change itself is the newfound constant.

While ERP hosting changes may appear to have a relatively lesser impact on users and operations compared to adjustments in ERP functionalities, it is crucial not to underestimate their significance. The migration process inevitably involves certain periods of downtime, which can lead to reduced productivity and, consequently, potential revenue loss. These potential losses must be acknowledged and factored into the equation to avoid unforeseen complications. Additionally, given that ERP systems encompass numerous departments, adopting a phased approach on a department-by-department basis becomes impractical, further exacerbating the challenge.

In order to efficiently tackle and alleviate the potential risks and repercussions spanning across user departments, the service delivery function, and the entirety of the company; meticulous communication, strategic planning, precise scheduling, and flawless coordination take on paramount significance. By focusing on these few considerations, any ERP migration project will have enhanced its prospects of success.