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4 Back-Office Concerns About Moving to Cloud

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Margaret Harris, Oracle BRANDVOICE contributor, wrote in Forbes about four back-office concerns about moving to Cloud. Recent conversations have shifted away from why companies should move to the Cloud and more toward how they will get there. However, there are still a few back-office concerns about moving to Cloud that keep companies on edge. Industry veteran Juergen Lindner, Oracle Senior Vice President of Cloud Applications Marketing, said that many of these concerns are on a tactical level. Lindner identified four of the top back-office concerns about moving to Cloud.

4 Back-Office Concerns About Moving to Cloud

The top four back-office concerns about moving to Cloud that Lindner identified include:

  1. Ensuring that Cloud applications complement their existing on-premises applications – many of which are customized
  2. Deciding which business processes to start with
  3. Managing coexistence with multiple Cloud vendors
  4. Ensuring Cloud vendors’ roadmaps align with your company’s strategy and budget

Concern #1: Ensuring Cloud Apps Complement Existing On-Prem Apps

Lindner explained that hybrid environments are going to be a reality for a while. Every company’s Cloud journey is different, but many perceive that their customized systems provide competitive advantages. They don’t want to lose that by moving to the Cloud. The sheer number of those on-premises software customizations, some of which were made decades ago, can be jaw-dropping.

Lindner and his team worked with a company that had 15,000 customizations. Once the company took a hard look at them, it found that it wasn’t using many of them and that others wouldn’t be needed because the Cloud replacement provided comparable functionality. In the end, the company had to build only 15 extensions to the Cloud software to support certain specific needs.

“Often, the dialog has to change from what a company has done in the past and what investments they have sunk into customizations to whether they can afford to stay locked into best practices from years ago when others in their industry are adapting to constantly changing best practices in the Cloud.”

-Juergen Lindner, Oracle Senior Vice President of Cloud Applications Marketing

Concern #2: Deciding Which Business Process to Start With

Cloud isn’t just new technology – it requires a new way of working that involves changes to job roles and faster decision-making. Some companies start with a quick win by reworking a relatively simple business process and applying the lessons learned when moving other related processes to the Cloud. Some start with a single subsidiary – using it as a laboratory and then scaling that Cloud deployment to other areas of the company. Others begin with a geographic region to address specific regulatory or tax requirements.

“Many are closely watching what their industry peers are doing. They want to know if they’re moving first, what they can learn from those that have already moved to Cloud, and how they did it. Of course, they want to take as much risk as possible out of the equation.”

-Juergen Lindner, Oracle Senior Vice President of Cloud Applications Marketing

Concern #3: Managing Coexistence with Multiple Cloud Vendors

With Cloud applications, it is all too easy for lines of business to just swipe a credit card to subscribe to a vendor’s Cloud. However, a company that patches together Cloud applications from myriad vendors is also taking on multiple data models, which will require expensive bridging mechanisms and constant reconciliation.

“That makes it very hard for the CIO to reconcile all the individual Clouds across a company. Often, company leaders want an architecture that can support them across any line of business and any type of technology layer.”

-Juergen Lindner, Oracle Senior Vice President of Cloud Applications Marketing

The challenges grow if that company intends to apply machine learning algorithms that need to pull data from these separate data silos. Single-vendor Cloud application suites address integration out of the box – freeing up IT organizations to focus on higher-level innovations that drive business priorities.

Concern #4: Ensuring Cloud Vendors’ Roadmaps Align With Your Company’s Strategy and Budget

Lindner explained that one major concern that SAP customers have is that the company is requiring them to re-implement their applications on the SAP Hana architecture by 2025, which is expensive. He said that it is critical to understand the architectural requirements of a vendor’s Cloud offerings. Many companies are exploring how to reduce their reliance on their traditional vendor because of a very costly re-architecture that will soon be required. They are figuring that if they have to re-implement anyway, they might look for other Cloud partnerships.

Other key considerations include whether the Cloud offering provides all of the capabilities a company needs. In ERP, for example, that might include built-in reporting, planning and budgeting features, as well as automated regulatory compliance. Of course, proven security and integration with other business systems are must-haves as well.

“It’s also wise to look into the vendor’s investment in, and strategic approach to, technologies such as machine learning, Internet of Things (IoT), and blockchain. The goalpost is constantly being moved. It’s important to have technology partners that enable you to incorporate new innovations quickly – without needing a small army of data scientists.”

-Juergen Lindner, Oracle Senior Vice President of Cloud Applications Marketing

To learn more about back-office concerns about moving to Cloud, check out the additional resources attached below.

Additional Resources

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  • Cloud Day: November 12
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