CIOs know they need to move to the cloud.
Legacy on-premise ERP systems simply can’t keep pace with business needs today.
“Be prepared for the cloud to be the dominant way, where all of our data platforms are service-provided, where all cyber platforms are service-provided, where (the tools) we develop with will be in a hyper-scale cloud environment,” Barry Brunsman told CIO Magazine. He is the leader of the CIO Advisory Center of Excellence at KPMG and a principal in the firm’s CIO Advisory practice.
According to CIO Magazine, a robust cloud environment will be “mandatory for capitalizing on other technology trends expected to be in play in 2025.”
Those trends include:
- Ongoing growth in ecommerce
- Advanced automation of finance, procurement and HR functions
- Hybrid or remote work environments
- The rapid growth of data (and the persistent struggle to wrap your hands around it)
- Hyper-personalized customer experiences
Nearly all (94%) organizations worldwide are embracing a next-generation ERP strategy that involves migrating to cloud platforms and adopting high-end analytics such as artificial intelligence to overcome the limitations of legacy applications and modernize their businesses, according to a survey of 1,675 IT executives by Boomi.
Gartner has forecast that by 2023, 65% of organizations will adopt ERP applications that encompass AI, have a data-centric design, can be used out of the box and are designed to make people more efficient.
Why the cloud – and why now?
Most CIOs believe that the switch is essential if you want to keep up. Here’s what they’re facing.
1. An Urgent Need for Visibility
More than ever, companies need visibility.
Visibility into their supply chains (when will that widget arrive?).
Customer demand (is the economy having an impact?).
Production (is anything slowing our timeline?).
And their team’s productivity and needs (can we do anything more efficiently?).
Without this visibility, companies are left floundering or piecing together workarounds to meet these needs – or they’re falling behind. That makes businesses vulnerable to costly inefficiencies and inconsistencies.
Cloud-based solutions can break down silos for financial leaders and provide top-to-bottom supply chain visibility for operations teams.
An example of a technology that is transforming visibility and requires the cloud is blockchain. Blockchain technology allows organizations to streamline shared workstreams by exchanging and tracking assets and transactions on a shared ledger. Each partner then gets real-time visibility into every transaction and can also reject incorrect transactions before they’re applied to a ledger, simplifying auditing and reducing fraud. (Source: Microsoft) This technology has been leveraged to increase visibility and compliance in supply chains.
Another great solution for visibility and planning is the rise of Digital Twins, a cutting-edge technology. For example, you might create a digital twin of your supply chain and test it with scenarios for unexpected events. What you learn helps you plan for crises – in turn improving resiliency.2. A Desire to See the Future
It’s not just about visibility into the now. More and more, companies are embracing predictive analytics. This is a branch of advanced analytics that predicts what’s to come using past data, statistical modeling, data mining and machine learning.
A key piece of predictive analytics is getting data out of silos (which the cloud enables), so that it can be mined using machine learning for critical business insights. Machine learning uses algorithms and statistical models to create systems that automatically learn, adapt and improve over time based on data and experience. Algorithms identify patterns, enabling applications like predictive analytics.
Some practical applications of predictive analytics enabled by machine learning include:
- Equipment monitoring
- Customer churn analysis
- Worker churn analysis
- Anomaly detection
These types of capabilities are available through modern cloud-based solutions such as Microsoft Dynamics 365 Finance. They are changing the game. One example: Microsoft Dynamics 365 Finance now includes Finance Insights, a set of AI-powered features, including Intelligent Budget Proposals. This replaces the guesswork associated with budgeting with AI-powered insights, mining years of data to enable better decisions. That’s just not possible with legacy solutions.3. An Expectation of Real-Time Data
If you’re operating on even days-old data, you’re already behind. Increasing the accuracy and timing of data improves a company’s ability to accurately forecast outcomes, make better decisions around production or service delivery, and drive consistent customer experiences.
These days, employees, customers and suppliers expect it. In part, this is driven by consumer life. When you can see in real time how many shirts are left in stock during an online shopping trip, your team comes to expect the same kind of visibility at work.
The cloud enables real-time data, eliminating the need to synch up manually to get a view of what’s happening.
Many companies have long used data warehouses for analytical purposes and decision-making in departments. That’s often been siloed, however. But the data-warehouse landscape has changed – supporting the need to consolidate systems, scale operations and enable mobile self-service. Data warehouses are capturing data from cloud SaaS applications, and now include data outside of applications such as social media data, Internet of Things sensor data, weather information and even image, audio and video data.
Learn more: Data Warehouse Migration to the Cloud: How to Make This Strategic Move
4. Doing More with Less
Automating repetitive manual processes can save hours, days or even weeks of work, letting your team focus on much more strategic tasks. At a time when labor is at a premium, and employees are looking to do more with less, automation is top of mind.
Newer technology such as Robotic Process Automation – one application of which is to automatically process invoices that come into the system – comes to mind. IT teams are also reaping productivity benefits from cloud-enabled automation, such as Test Automation and automatic application updates through cloud ERP such as Microsoft Dynamics 365 Finance and Supply Chain Management.
Getting more granular, companies are benefiting from automation at the task level. For example: managing credit.
Keeping track of customers, payment terms, ratings and more in a mix of Excel spreadsheets and siloed applications can lead to costly errors. Microsoft Dynamics 365 Finance automates many of these processes, which drives efficiency and reduces risk.
5. The Imperative to Know Thy Customer – Really Well
When it comes to customer behavior, data is gold. And that data fuels the experiences that keep customers close. Hyper-personalizing is required today in both B2C and B2B markets.
That requires bringing first- and third-party data together, as well as the right tools to process that data and deliver the benefits from that to the customer.
Some of that tech was mentioned above – cloud-based data warehouses, machine learning and more. It also requires integrated modern cloud ERP platforms such as Microsoft Dynamics 365 Finance and Supply Chain Management to bring it all together into one system.
The goal is to paint a comprehensive picture of your customers and deliver a consistent and personal experience no matter the channel. A simple benefit of personalization is more efficient cross-selling based on past or current shopping behavior.
Don’t Get Left Behind
The tipping point from “suggested” to “mandatory” for cloud implementation is the point where not following trends such as those outlined above is limiting your business. Begin with asking questions about your business, such as:
- “Are we being penalized by our inability to derive insights from our data?”
- “How are our margins being affected by our fuzzy financial visibility?”
- “What customers are we losing by not meeting their wants and needs?”
A deep look at where your business is losing value is a hard first step to take. Understanding where those losses are coming from will lead to realizations about what needs to be changed.
Cloud-based solutions are the smartphones of business operations. Without them, you’ll be left operating your business without access to valuable apps that provide the connectivity and information the world so heavily relies on.
And competitors that have already begun or successfully implemented the cloud have an upper hand in providing customers with the experience they want.
And yet, you need to take your time. Yes, the cloud is becoming mandatory, but rushing into the implementation without a solid plan and timetable will lead to further disruption and costs for your organization.
For complete cloud reliance, CIOs and analysts believe that a roadmap of three to five years is ideal.
Taking carefully planned steps toward the goal and implementing a phased plan is essential to building a proper foundation and maximizing the benefits that cloud-based solutions have to offer. Read more in The Foundations of a Successful ERP Implementation.
Columbus can help you build a roadmap. Reach out today.