Three Reasons Why You Need to Move to an ERP System in the Cloud

If the past 20 years have taught business leaders anything, it’s how to adapt to survive. From recessions to pandemics and geopolitical conflicts, companies that don’t adjust and evolve at the pace in which the world changes risk going bankrupt, being acquired, or ceasing to exist as digital disruptors gradually take their place.

Such threats are particularly true for organizations that still rely on legacy ERP systems that are outdated, inflexible, and often heavily customized. For a technology that is the most mission-critical of all digital systems, issues around functionality, data latency, and broken integration commonly surface as businesses adopt new digital capabilities and extend them across the enterprise.

And these risks inevitably become, as IDC noted, “the disruptions that hinder or even stop the ability of the organization to meet its promise to deliver the right products and services to the right place and at the right time.”

Why companies should evolve in the cloud

According to Harvard Business School professor Clayton Christensen, “breaking an old business model is always going to require leaders to follow their instincts. There will always be persuasive reasons not to take a risk. But if you only do what worked in the past, you will wake up one day and find that you’ve been passed.”

In light of Christensen’s advice, here are three reasons why business should rethink their ERP strategies to align with their growth strategies.

  1. Develop new business models. The introduction of new business models in your industry puts organizations in a prime position to offer new products and services that address changing customer needs and create new revenue streams. Yet, the complexity of legacy ERP – partially due to years of customizations, modifications, and a lack of new innovations – can impede innovation and slow down time to value. As a result, the business plateaus and sits on the sidelines as more innovative competitors bring new ideas that disrupt the industry.
  1. Drive new operational efficiencies. By taking advantage of intelligent technologies such as machine learning, smart situation handling, and process automation, organizations can gain a competitive advantage in meeting customer expectations and achieving business objectives in ways their competitors cannot. Unfortunately, legacy ERPs are not equipped with such artificial intelligence nor the real-time insight to drive the predictability and transparency needed to optimize the value of intelligent technologies.
  1. Modernize mission-critical systems without risk. When using a legacy ERP, the cost of IT downtime increases as organizations are pressured to deliver always-on and always-available services. However, a cloud ERP provides the prebuilt integration capabilities necessary to keep all business systems connected, support enterprise innovation, and accelerate expected outcomes.

Where sustainable, intelligent enterprises begin

While most executives may be familiar with intelligent technologies, only 10% of companies have a digital business model in place to fully use these opportunities, according to research from the ESCP Business School in Berlin and the MIT Sloan Center for Information Systems Research.

By leveraging the RISE with SAP solution, many SAP customers are overcoming this hurdle in their transformation journey toward becoming sustainable, intelligent enterprises in the cloud. The solution comprises the five essential building blocks for business transformation in a fast-moving marketplace:

  • Cloud ERP – namely, SAP S/4HANA Cloud
  • Industry next practices and extensibility
  • Business platform and analytics
  • Business process transformation
  • Outcome-driven services from SAP and partners

RISE with SAP drives business innovation in the cloud. The solution enables companies to take the lead by creating differentiating business models in their industry and unlocking new operational efficiencies through embedded intelligent automation. Furthermore, organizations can increase their margins with access to industry-specific processes and best practices content, while expanding transparency and controls to better manage sustainability company-wide.

Companies can also position themselves to never stop improving with continuous insight into opportunities for business process optimization. The solution provides instant analysis of processes, activities, and tasks to help prioritize optimization opportunities and sharpen process performance based on actual system usage, best practices, and industry benchmarking with collaborative process and journey modeling. Additionally, tailored, AI-enabled insights can be used to accelerate and automate business processes.

Ultimately, RISE with SAP positions companies well to secure their success. Each element of the solution is designed to support industry realities in any geography and for any regulatory requirement, including embedded cybersecurity to protect SAP applications and data. Through a holistic service level agreement, the responsibility of maintaining reliable cloud operations and technical support is passed to SAP, even when an infrastructure service provider is used. In addition, organizations benefit from a versatile technology platform that helps speed innovation, and a guided journey and outcome-driven services from SAP and our partners smoothen the transition to the cloud.

When trust secures business success at every step

Business transformation is no longer a simple umbrella term for one-off fundamental changes in how a company operates. Instead, the concept has been expanded into a survival mentality of fast-paced, continuous evolution focused on competing more effectively, optimizing operational efficiency, or making a wholesale strategic pivot into a new market.

RISE with SAP empowers our customers with this mindset as they reimagine operations with a modern cloud ERP for every business need. Organizations can create a seamless, interconnected operational fabric encompassing all front-office and back-office capabilities and processes with technologies that are growing more intelligent and a new wave of competitive possibilities. And more importantly, they gain the advantages necessary to become resilient, navigate disruption, and fulfill customer requirements.

To explore how your business can benefit from a modern cloud ERP as part of RISE with SAP, read the IDC white paper, “Four-Part Technology Plan to Reduce Mission-Critical Risk,” and use the RISE with SAP value calculator.