Grounded By On-Premise ERP? You Can Still Benefit From Modernization

Carl Dubler

Part 4 in the “ERP Deployment Options” series

Previously in this series, we talked about the cost and performance advantages of different cloud ERP deployment options, including real-life examples. Here, we address situations where cloud ERP, or even a hybrid cloud approach via hyperscalers like Azure, AWS, or Google, is just not an option. If you need complete control, or if unique business applications or strict regulations require it, then it’s possible that you need to stay on-premise.

But even if you are grounded with on-premise ERP, there’s still good news, because ERP technology has evolved. As we’ll see in this blog, some companies are realizing significant benefits such as reducing the hardware and resources required by IT or streamlining and simplifying processes for business users. Here’s what to consider when evaluating different solutions – and partners – for your own ERP transformation journey toward becoming an intelligent enterprise.

Take stock of on-premise ERP data models

What’s happening with your ERP database? Is the number of tables growing or shrinking over time? Most ERP vendors offer tools that can accelerate analytics, such as bolt-on applications that speed up the extraction of data and analytics. These tools might shave a few minutes from reporting or help speed up the financial close, but they do little to reduce or simplify your ERP data models.

The problem is that most ERP solutions require separate data models for analytics and transactions: separate tables and datasets, which are often multiplied for different business units, functions, and industries, all requiring updating and verification. For IT, that means replicating data sets between analytical and transactional layers, and managing a rising tide of analytical repositories, from data cubes to data warehouses. For business users, it means manual reconciliations between systems to verify financial and other data, or lengthy planning and reporting cycles that can take weeks or even months. What business today can afford that kind of sluggishness?

Look for a solution that shrinks your data models

The long-term agility and responsiveness of your organization depend on incorporating much simpler data models. It is too difficult for a business to make process changes while trying to drag along a data model designed decades ago. Consider instead a modern ERP solution that can run all processes from a single data model.

While most ERP technology vendors offer solutions that will speed up performance incrementally, can they also reduce the hundreds or thousands of data objects down to just a few tables, or even a single table? The fact is that if an ERP solution can’t simplify the data model, it’s not really a solution at all. A simpler data model is what allows business processes to be more efficient while also simplifying the IT landscape.

See how leading companies are transforming on-premise ERP

In fact, companies across industries are achieving specific business transformation objectives by upgrading their on-premise landscapes, including:

Simplifying IT and business landscapes. One of the world’s top ten steel manufacturers consolidated 80 subsidiaries into a single ERP instance to standardize business processes and provide real-time reporting across global operations. The in-memory ERP platform went live across all 80 subsidiaries in just 11 months and reduced the number of servers by 75%.

Improving business performance. An automobile manufacturing company based in Asia simplified its data model and shrank its data footprint to dramatically improve production processes. In the legacy system, materials requirements planning (MRP) required four hours and a suspension of operations. With its new in-memory ERP database, the company can run MRP in 12 minutes, anytime, without disrupting operations.

Supporting business innovation. A global architecture and construction services organization deployed a unique, vertically integrated construction model that enables on-demand manufacturing of building materials near the construction site. By using a single ERP solution and integrating Internet of Things data to connect an end-to-end global materials supply chain, the company has saved over 50% in building time and costs.

Check out Forrester’s take

In the new study “The Total Economic Impact Of SAP S/4HANA,” commissioned by SAP, Forrester Consulting examined the potential ROI organizations can realize by deploying a next-generation on-premise suite. To better understand the costs, benefits, and risks, Forrester interviewed companies with years of experience with the software. The report sheds light on how dynamic on-premise ERP software can significantly impact the bottom line, from year-over-year reductions in inventory carrying costs to enterprise-wide automation that reduces operational costs by millions.

For more on this topic, see “Can Cloud Providers Help Accelerate Your Journey To The Intelligent Enterprise?

Carl Dubler

About Carl Dubler

Carl Dubler is a senior director of Product Marketing for SAP S/4HANA. With an IT career stretching back to the late 1980s, he has done nearly every role in the business. In his ten years at SAP, he also managed SAP’s first commercially available cloud product and first cloud product on SAP HANA.