For decades, legacy ERP systems have acted like a big, sturdy umbrella that sheltered every piece of data needed to manage the business, automate back offices, and connect customer-centric activities. Organizations synchronized their processes and gained a holistic view of their entire operation, which led to greater efficiency as resource planning and expense control improved. But now that data is pouring over businesses like a continuous, torrential wall of rain, it seems that this trusted umbrella is starting to show signs of wear and tear as it buckles under it all.
Internet of Things, machine learning, artificial intelligence, blockchain, and quantum computing – we’ve all seen a headline or two featuring these terms. Most executives understand that all of these trends mean that extensive amounts of data are coming; but far too many are befuddled on what value they can get out of that information. Even if they move their data center to the cloud, 80% of companies will still not achieve significant cost savings through 2020, according to Gartner.
By now, most lines of business would consider ERP as a non-issue, even an unspoken expectation. However, a sudden, disruptive wave of Big Data; demand for anytime, anywhere access to data-driven insights; and a vast marketplace of technology ready to address these needs are changing how we view this traditional software.
In-memory computing breathes new life into ERP systems
Clearly, ERP hasn’t stood still since its first introduction as a central source of connection between manufacturing resource planning (MRP) and business accounting applications. Since the 1990s, it steadily evolved into a fully integrated set of applications that covers everything from human resources, procurement, and finance, to manufacturing, to the customer experience.
Organizations are now shifting more of their attention to analyzing and identifying emerging market trends, generating knowledge and insights, forecasting cause and effect. As a result, ERPs running on in-memory computing platforms are becoming attractive investments for advancing the business. By storing information in the main random access memory (RAM) of dedicated servers, rather than complicated relational databases, ERP users can cache data regularly and locate the information faster than anything experienced before. At the same time, they can engage higher-level analytics in the same database – paving the way for rapid detection of patterns through on-the-fly analysis of massive data volumes.
And new hosting options for cost savings
Jumping on the in-memory ERP bandwagon may seem like an easy decision. However, sourcing and vendor management leaders, who are focused on infrastructure technology services, are also realizing that there’s an opportunity to create dramatic cost savings if the platform is hosted on the right public cloud.
Considering that hosting options include a broad range of global service integrators, technology specialists, local hosting partners, and new cloud entrants, it can be difficult to pick “the one.” In a recent report, Gartner outlined five critical considerations when selecting a hosting option.
- Plan a specific in-memory strategy. Account for fundamental differences in the infrastructure required to run an in-memory architecture compared with traditional IT landscapes.
- Choose a commercial pricing mechanism. Decide which payment method can improve your cash flow and administration workload. Monthly billing can range from fixed pricing to an entirely elastic, consumption-based model.
- Conduct your own total cost of ownership analysis. Resist the urge to draw conclusions from other comparisons, which can vary widely. For example, analysts estimate the cost of an in-house delivery option with alternatives for cloud infrastructure-as-a-service (IaaS) to be anywhere between 50% less to 20% more expensive. Know what each option offers by trusting your calculations.
- Choose a certified provider. Ensure that a hosting provider is certified for the invested ERP platform and the preferred cloud approach. For instance, a full cloud IaaS may provide on-demand, near real-time, self-service access to abstract, programmatically accessible, and highly automated infrastructure resources, but it may also exclude a managed service component needed to run the ERP.
- Seek detailed operational evidence on hosting capabilities. Recognize that the market is still immature, even though the potential advantages are transformational. It may be challenging to locate live reference customers, especially those with disaster recovery experience, but it’s still a worthwhile investment to understand the realities of the provider’s capabilities.
By following this sage advice from Gartner, sourcing and vendor management leaders can empower business and IT operations to tap into the full value of in-memory computing in the cloud and deliver a comprehensive, coordinated application landscape and suite of managed services. This one technology investment will not only drive IT and business transformation and lower operating risks, but also accelerate innovation, growth, and bottom-line outcomes.
Read the Gartner white paper, “The Impact of SAP HANA on the SAP Infrastructure Utility Services Marketplace,” to learn more about the evolution of ERP and how SAP HANA Enterprise Cloud can help your business benefit from it.