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What Is Cloud ERP?

Feature Article | October 11, 2017 by Sal Laher

Enterprise resource planning (ERP) solutions have been a feature of business since SAP launched the first solution in 1973.

Essentially, they are a model of a well-run organization. Tracking inputs and outputs, goods, inventory, materials, work in progress, invoices, purchase orders, payments received and made — ERP solutions connect all aspects of an organization’s operations.

This large range of touch points, combined with the enablement of reporting and decision making, both strategic and statutory, means ERP solutions are fundamental to the smooth running of many businesses. In the absence of an alternative model, many organizations chose to keep implementation and customization in their own hands.

This led to a focus on building processes, even the most simple and fundamental to a business, from scratch. This basis for this entirely rational decision is being challenged by the emergence of cloud ERP. This is because, the resources required to execute this initial on-premise implementation are significant. This approach also demands significant testing, user training, all of which delay time-to-value.

With SAP S/4HANA Cloud, SAP is the leader in intelligent cloud ERP

But more importantly, as new innovations, capabilities and updates become available, all the customizations made to the ERP solution act as a disincentive to upgrading. What was once a “safe option” to run, maintain and protect on-premise databases and server infrastructure, becomes an increasing liability and technological advances gather speed. As competitors carve out competitive advantages thanks to new possibilities in analytics, collaboration, accessibility and more, many organizations find they customized their ERP to death.

What Is Cloud ERP?

Cloud ERP is the alternative approach. As well as the fundamental benefits cloud deployment delivers; data and application accessed via a web browser, multiple updates every year, better security, etc, cloud ERP plugs the vendor’s core business experience into the heart of your business.

Forget building hundreds, or even thousands, of processes from scratch. Instead organizations can leverage best practices developed over decades of industry exposure and expertise.

What Is Intelligent Cloud ERP?

While first-generation cloud ERP was focused on speed of adoption, the new generation of cloud ERP is intelliget and provides superior technology. Through artificial intelligence (AI), it learns, anticipates, and is one step ahead, offering next-generation agility in business operations and instant business value. SAP is the leader in intelligent cloud ERP through significant investment in SAP S/4HANA Cloud.

Intelligent cloud ERP harnesses actionable insights via in-memory and predictive analytics, next-gen AI-driven automation and digital assistants to deliver a digital edge for your business. It combines the scalability and security you expect from the cloud, with a rapid update cycle that continuously adds capabilities and improves the user experience to drive productivity.

Intelligent cloud ERP represents a significant shift in the way enterprises utilize their ERP systems, deploy their resources, and achieve nonlinear returns on their investment. Industries are in the process of being changed forever as they move from legacy technology to the most modern digital platforms, including intelligent cloud ERP.

What Are the Key Benefits to My Organization?

The key benefits organizations can enjoy from an intelligent cloud ERP come from replacing the complexity of an over-customized ERP, with the simplicity of off-the-shelf, best practices. This unlocks the ability to singularly focus on business outcome and customer satisfaction, not firefighting and battling inefficient processes. Businesses enjoy continuous impact by adapting and innovating confidently, staying competitive and truly leading their industries. Capex costs are shifted to opex, so IT’s focus shifts from keeping the lights on to enabling enterprise scale digital transformation.

Intelligent cloud ERP gives businesses the tools to know everything that is going on in their business in real-time, offering not only live insights but the flexibility and agility to act on that information and truly drive change.

How Quickly can the Benefits of Intelligent Cloud ERP be Realized?

Unlike traditional deployment – where CIOs are responsible for tremendous overhead in provisioning, application management, middleware, and maintaining IT support systems, not to mention ongoing security – for intelligent cloud ERP, you need only two things: a browser and your company’s data. No servers, no front-end rollout, no monolithic change management.

With strong executive support, communication and training, value can be delivered almost instantly. This new model speeds time to value. SAP S/4HANA Cloud averages 100 days from order to full implementation, and we plan to get our pace down to 70 days with further automation. Quarterly updates continuously expand the innovative potential of intelligent cloud ERP.

How Is Intelligent Cloud ERP Updated?

On-premise ERP solutions are installed locally and require internal – or expensive external – IT resources to update and redeploy across all your organization’s devices.

Intelligent cloud ERP solutions are upgraded regularly – usually several times a year – and are carried out by the provider. The user decides which new features and functions to turn on. This little-and-often approach ensures adoption of latest innovations, updates and best practices at cloud speed.

Sal Laher is global chief operating officer for SAP S/4HANA Cloud

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