5 Misconceptions About Cloud ERP

The ERP marketplace has evolved substantially in the last decade with increasing adoption of digital technologies like Cloud, analytics, and mobility. Traditional monolithic on-premise ERP platforms are rapidly changing from being a mere system of records to a system of intelligent decisions. They seek to provide new insights and actionable predictions to recommend the next best action, learning from and adapting to evolving business information. This intelligence facilitates increasing automation of business processes, elimination of redundancy, optimization of user interaction, linking of data across systems, process design, and technology resource usage, leading to more efficient and cost-effective operations. Real-time availability and accessibility to information using mobile technologies provide high agility in response and faster cycle time for effective action. They also have a modern user interface for ease of use, learning, and adoption to drive higher employee engagement and productivity.

Having realized the benefits from the adoption of cloud technology with improved collaboration, efficiency, innovation and intelligence, many organizations currently in Oracle EBS 12.x.x actively considering moving their On-Premise Oracle EBS to Cloud. Moreover, since Oracle EBS 12.1.x is getting de-supported from Dec 2021, there is a conundrum whether to migrate to Oracle Cloud ERP or simply upgrade to Oracle EBS 12.2x. However, many perception gaps and inhibitions exist impeding migration to Oracle Cloud ERP.

This paper will present the common misconceptions around– cost, vendor lock-in, maturity, security, reliability, organizational and cost, and real-life examples and viewpoint to dispel them.

# Misconception 1: Oracle Cloud ERP is costly in the long run.

While there is substantial saving upfront by moving to a subscription model, many organizations feel Oracle Cloud ERP is costly in the long run. The ease of implementation and subscription-based pricing itself could make the decision to migrate to Oracle Cloud ERP attractive for many organizations. Oracle Cloud ERP systems provide a modern user interface and experience, leading to better user adoption. There have often been complaints of poor user adoption for on-premise applications despite significant investments in end-user training and interface design. In a recent article, Forrester points out that “SaaS applications frequently inherit their user interface from familiar Web programs — having an easy-to-learn Amazon.com or eBay-like look-and-feel.”

There are also significant savings in technical support, as many of the tasks such as bug fixes, patching can be eliminated or reduced to almost zero. Since upgrades for Oracle Cloud ERP happen more frequently (roughly four times in a year) and are incremental, there would be significant savings in testing, user acceptance, and end-user training. Organizations don’t have to engage any SI or external consultants to perform any of these tasks as in On-Premise ERP upgrade.

If an organization in Oracle EBS 12.1.x or lower version has to evaluate the cost of implementation of Oracle Cloud ERP as compared to an upgrade to 12.2.x, the cost of implementation of Oracle Cloud ERP will be slightly higher. However, they should consider other factors, as mentioned above, to build a business case.

In our experience, Oracle Cloud ERP, in most cases, offers significant benefits in the short term and reduction in TCO in the long term when calculation includes the cost of upgrade of on-premise ERP and replacement of hardware over a period of time in addition to factors mentioned earlier.

# Misconception 2: Oracle Cloud ERP cannot address our unique requirements

Every business has several unique requirements that are critical to its success. Many customizations in their legacy systems exist to handle some of these unique business requirements. Organizations think that it would be difficult to achieve the same in Cloud ERP.

Implementation of unique requirements would undoubtedly need a careful assessment of the Cloud ERP Platform. However, generally speaking, Oracle Cloud ERP is in development for more than a decade and has matured a lot in recent years; many of the unique requirements that your business has can be addressed adequately by configuration or small customizations in Cloud ERP. Oracle Cloud ERP can be easily tailored ERP system to suit your business and run smoothly. Oracle provides updates to ERP Cloud and adds new features several times in a year, helping customers adapt quickly and keep pace with business change. Today, Oracle is infusing cloud applications (including ERP) with emerging technologies such as the Internet of Things, artifcial intelligence, machine learning, chatbots, and blockchain.

# Misconception 3: My organization will have lock-in with Oracle

In Cloud ERP, I do not own the data, and I would be locked in forever with a vendor. This is another misconception that does not exist. All the data in Cloud ERP is your own, and you have the option to migrate to another system or vendor. However, there would be efforts involved to do that. A similar effort is also required when you have to migrate your on-premise systems from one vendor to another. Further, data in Oracle Cloud ERP is backed up frequently, and copies are stored off-site.

Oracle also puts explicitly in their agreement that all your data residing in Cloud ERP is yours and can be provided to you whenever it is required. Oracle also specifies how long data will be available once you have discontinued their services. The success of Oracle Cloud ERP is entirely dependent on and tied directly to customer success month on month, and therefore, you can expect excellent quality service from Oracle. 

# Misconception 4: Cloud ERP is not secure

Organizations have reservations about putting all their business data into the Cloud. Organizations think they are the best fit to secure their data. Reality is your focus is on running your business and not managing the security of your data and system. Even if you hire the best team to maintain security, it isn’t easy to retain them in the long run. Whereas for ERP Cloud Vendors like Oracle, security is a cornerstone of their business, and they have huge investments in making their systems secure. This level of investment and continuous fixing of vulnerability is not viable for an organization on its own.

Oracle ERP Cloud is built on a single database where finance, HR, customer, and supply chain systems work as a completely integrated system. Think about a situation where each of these systems is different and are stitched together somehow. If they are not integrated properly, resulting in a “cloud hairball” where organizations struggle for data management, consistency, and security and end up spending extra efforts and cost of integrating incompatible systems.

While Oracle ERP Cloud follows a higher level of security standards, any extensions built by the organization to address their unique requirement may also create security vulnerabilities. Organizations implementing Oracle ERP Cloud and building extensions and integrations also have to follow security standards to plug in the gap.

# Misconception 5: Cloud ERP is not reliable

Your business depends upon ERP Systems 24X7, and any disruptions can impact your business negatively. Most of the companies have reservations about Cloud ERP thinking that any disruption in Cloud ERP would be bad for their business.

Oracle Cloud ERP take reliability core to their offerings and promise 99.5% or above uptime that means very low unavailability in a week. Oracle makes massive investments in building and securing a reliable physical infrastructure and equipment that run Cloud ERP, they build redundancy in every part of the systems, and every possible safeguard to make it reliable. They have also built infrastructure to support hot back-ups with the promise of nearly zero loss of data in case of a disruption.

In short, Oracle Cloud ERP is natively built on the Cloud, with rich functionality that draws its features and functionality from Oracle’s three leading business applications- EBS, PeopleSoft and JDEdwards. It has matured over a period of time and is emerging a viable and cost-effective over on-premise EBS or PeopleSoft.  Evaluation of its fitment to your business and analysis of cost-benefit could be the first step in your journey for its adoption for your business.