How to Weather the Impending 2025 ERP Storm
In an overly simplified example, the butterfly effect describes how a butterfly flapping its wings in Australia can lead to a hurricane over the Bahamas aka the Chaos Theory. In the ERP world, we could be seeing the formation of a very big storm due to the announcement SAP made on the 2025 deadline. In short, the support for their long running ECC solution will come to an end 31st December 2025 and customers will either need to migrate to SAP’s cloud S/4 HANA platform, migrate to a new platform or stay put on ECC and find their own support or pay a premium for SAP support. On a side note – this is akin to Windows ceasing support for Windows 7 in January 2020. Oh the travesty.
For many large companies and indeed the 90% of fortune 500 companies that run SAP, this is a very concerning problem and CIO’s are scrambling and rightly so. However, it did get me thinking about the mid-tier and small/medium enterprises who do not have the deep pockets or resources to navigate this type of upheaval. It isn’t nice to feel like your backed into a corner without any options. Fortunately, for the companies that are not so heavily invested in an SAP, Oracle or Microsoft ERP solution there are other options. This article will focus on looking for an alternative solutions provider.
1. Engage a firm to conduct a Business Assessment
I always say that technology is the enabler for innovation, efficiency and productivity so it is imperative that systems support your business and not the other way around. This can only be achieved if your solutions provider has a very clear understanding of your business and being very intentional with how the system will be designed around your business processes and controls.
A Business Assessment or a BA as we call it, has different forms. It’s known as business process re-engineering, end-to-end process mapping, organisational process and procedures etc. It must be the crucial first step for any system implementation. To be frank, I do get a little annoyed when companies insist that we give them a quotation after an initial meeting. It’s like asking someone to make an offer on a car purely based on the exterior without a detailed inspection of what’s under the bonnet. The cost of a BA is small in comparison to the total implementation cost but well worth the investment.
2. Consider open source solutions
I’ve written before about the benefits of open source solutions. We will continue to advocate open source because pretty much everything on the internet is built on top of open source software.
Here are some other benefits:
- ERP software is now within reach of all businesses with a number of products selling subscription based services (usually out of the box functionality).
- Fixes and new versions can be delivered faster and more frequently with communities of developers.
- The ability to customize the software to cater for specific business requirements.
- More integration options with any existing software.
- Rapid deployment model with the flexibility to activate modules as and when the business needs it.
- Not being locked-in to one vendor.
- Reduce the risk of being stuck with a product that won’t be supported in the long run.
3. Migrate to cloud computing
There is still a lot of debate within organsations as to whether they should migrate their data and systems onto the cloud usually revolving around the misconception that the public cloud infrastructure are not secure. My response to these concerns is to explain that the benefits far outweigh the relatively small security risks.
Cloud infrastructure providers like Amazon (AWS), Google Cloud, Microsoft Azure, Digital Ocean pour millions into hardware, firewalls and security towards their datacentres. The astronomical cost of maintaining your own data centre suddenly disappeared with the advent of infrastructure as a service. Now you get access to the latest and greatest hardware, assurance of 99.95% availability, regular backups and security at a fraction of the cost. In the past, when you needed more server space or memory you had to purchase new hardware. Now it can be done at the click of a button with only an incremental cost. Cloud computing power is now so accessible and prevalent that companies will only charge you for what you use down to the second! This is almost like being charged for electricity consumption which by the way is where this will all be heading.
Companies that face the 2025 deadline have (or should have) already started the process of planning their SAPExit or non-Exit strategy. For other companies, it is a wake up call to re-think their enterprise IT strategy. Consider all the great open source solutions that are available. Seriously consider ditching your ageing hardware and migrate to the cloud. Most importantly engaging the right technology partner (like us!) to know your business and help navigate through the storms of enterprise systems.