ERP Systems: How Companies Can Migrate To The Cloud

The digital transformation continues to advance worldwide. There is no getting around the cloud in the medium term for many companies – especially when it comes to business-critical processes such as ERP systems. Read here how companies can successfully migrate their critical workloads to the cloud.

With the end of support for SAP R / 3 and SAP ECC in 2027, many companies are faced with the choice of implementing new ERP systems or migrating to S / 4HANA. The use of an ERP system in the cloud offers several advantages, such as more efficiency, lower costs, and relief of the internal IT team. However, the change should be carried out carefully to manage to migrate their critical workloads to the cloud.

ERP Systems: Four Steps For A Successful Cloud Migration

The change aims to better align your processes with the requirements of digitization and the changed market conditions. This also offers the opportunity to rethink strategies, optimize them, or redesign them. The following four steps have traditionally proven themselves:

  • Get An Overview Of The Offer: Companies are faced with carefully examining any suitable solutions for the migration.
  • Determine The Starting Point: Where should the transformation begin? Companies should research relevant business cases and best practices.
  • Evaluation And Preparation Of The Project: The task here is to determine all your company’s requirements and needs. This is the only way to formulate a clear plan that precisely specifies the budget and the necessary resources.
  • Choose An Approach: How should the migration happen? Experts differentiate between three different migration variants.

Also Read: 6 Factors To Consider When Implementing ERP Software In An SME

ERP Systems: Three Approaches To Migration

  • Brownfield: Brownfield means the purely technical migration of an on-premises system. The processes and historical data remain unchanged in the cloud. This reduces effort and costs. At the same time, this form of migration can be implemented quickly. However, there is little room for improvement. The approach is therefore primarily suitable for ERP solutions that are already very close to the ideal.
  • Greenfield: The idea behind Greenfield is to redesign your ERP system in the cloud entirely. If desired, historical data can be transferred, which is potentially associated with some effort. With this approach, a project usually takes longer than a brownfield migration and requires a higher investment but offers the best potential for optimization.
  • Blue, orange or colored field: The third approach is a hybrid that combines the best of brown and green areas. Depending on the function of the ERP system, one of the two variants is selected individually. In this way, companies can transfer some processes and their data and revise the system simultaneously. As a current study by Lünendonk & Hossenfelder shows, this approach, in particular, is prevalent. Forty-three percent of the companies surveyed want to use the hybrid form for their projects.

Cloud Journey: Step by Step to the Goal

Although it has been tried and tested many times, the traditional, rather technical cloud journey still offers room for improvement – especially when it comes to concrete solutions. Ultimately, the entire organization must support the process. The IT service provider FPT Software has more than 20 years of experience in providing services in the SAP environment.

About ERP systems such as SAP S / 4 HANA, the service provider offers a wide range of services such as development, implementation, and rollout. With Digital Kaizen, the company has developed an incremental approach for large transformation projects over the years, which allows faster, more flexible, high-quality, and more cost-efficient implementation and, at the same time, does not forget the people in the company.

ERP Systems: Three Guidelines for Migration

Three central guidelines are in the foreground:

  • Think Big: Goals are set for the next three to five years.
  • Start Smart: The focus is on critical tasks (including operational tasks and digital initiatives).
  • Scale Fast: Successful (partial) projects can be scaled quickly, and the knowledge gained can be transferred to similar business cases.

This allows businesses to start small and still maintain an ongoing focus on the big vision. In this way, the value of new solutions can be demonstrated across the entire organization, which helps to achieve greater agility.

“The migration of an ERP system to the cloud is not a rigid process and accordingly demands a lot of flexibility from companies and employees. Unpredictable events such as the Covid-19 pandemic may also occur, which represent major obstacles to the digital transformation,” explains Le Hai, Chief Executive Officer at FPT Germany. “With Digital Kaizen, we have therefore developed a new method that not only shortens the process but also makes it individually adaptable.”

Also Read: 10 Benefits Of Implementing An ERP Solution In Your Company

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