No wizardry required: 3 steps to shift from legacy ERP to the cloud
- Posted on November 29, 2022
- Estimated reading time 6 minutes
Even if you’ve already decided to finally shift your business to the cloud, the first steps can seem like a daunting black hole requiring equal doses of luck and wizardry to pull off successfully. Historically, according to analyst firm Gartner, 55% to 75% of all ERP projects fail to meet their objectives, but these days the most advanced ERP solutions are designed cloud-ready and are more easily implemented and integrated without complex customizations. Today, there’s nothing magical about migrating manufacturing ERP to the cloud. Instead, with an experienced partner and the right platform, it should be a logical, methodical and predictable process.
In most cases, business leaders already have a clear understanding of where their company might be falling behind. For example, a near universal challenge manufacturers face today is increased logistical and operations complexity. During the pandemic, supply chain pressures grew rapidly, and the conflict in Ukraine has only increased the complexity (think fuel costs). Even before these crises appeared, however, globally distributed manufacturing models and the demand for highly personalized goods had already strained the supply chain. These issues and more all point to the necessity of an agile, accessible, always current cloud solution.
The only magic we might suggest is in picking the right platform and partner to shepherd the shift. For starters, Microsoft D365 is one of the most powerful cloud ERP platforms that can handle the breadth and depth of industry complexities. Forrester reports that D365 can achieve a reduction of costs of goods sold by 10% and improve gross margins by 2.4%.
For the best Dynamics 365 partner to help guide your transition, ask Microsoft. The enterprise software leader has named Avanade and its parent Accenture as its Microsoft Global SI Partner of the Year 17 times – including this year. As a joint venture between Accenture and Microsoft, Avanade has advance access to the continued development of Dynamics 365. We’ve also simply got greater global Dynamics 365 expertise and transition experience than any other potential partner.
Get started: 1, 2, 3
Once an organization has decided to transition, the burning question is often, “How do you get started?” While every circumstance is unique, general field-tested guidelines and steps apply to nearly any cloud transition strategy.
- Confirm strategy: first think, why migrate?
Strategic thinking for migration typically considers the entire enterprise, not just an isolated business unit. The reason for this is that the cloud provides widely increased visibility and collaboration power which means the entire enterprise can benefit. While this may not mean initiating an immediate wholesale swap from on premise ERP to cloud-based tools, it’s important to grasp what the cloud provides from an end-to-end business enablement perspective. From there, you can prioritize your areas of greatest need.
If we take the supply chain example, achieving more granular, high level, consolidated visibility into logistics and operations are clear benefits. Combine this with data-driven intelligence to support informed decision-making, and you begin to see the business case upon which migration strategy is built upon.
- Conduct business value assessments
The next step is to analyze opportunities for process harmonization which often goes together with business simplification. If there is no strategic goal for simplification, a cloud ERP will not achieve proper fit nor deliver the expected benefits. No one wants to replicate the complexity of old systems into a new model. Legacy ERP is always the result of many years of sophistication and complexity that has never been challenged down. A business value assessment is a unique chance to do that now.
This means strategically leveraging the necessary technology to extract the real benefit of business process simplification. It’s mapping to industry best practices, such as through the Avanade Intelligent Enterprise Solution (AIES) program which fuses the products, assets and knowledge of Accenture, Avanade and the Microsoft ecosystem. At its core, AIES enables a business process driven digital transformation. The solutions are industry-specific enhanced by cross-industry configurations – all developed using the Dynamics 365 platform. The result is to rapidly achieve agile systems and lower maintenance costs with a truly "evergreen" ERP platform.
The next step towards migration considers predictabilities in terms of cost, time, and quality of results. This evaluation is directly influenced by the fact that solutions, such as Dynamics 365, provide significant out of the box functionality (improves cost and time outcomes) while maintaining a high level of customization if required (quality assurance).
A thorough technical assessment is also important as it enables the systems integrator to gain a clear overview of the content for any given application platform. Microsoft offers tools that facilitate this technical assessment, and Avanade has further improved on those tools to accelerate the process. The result is a clear overall scope for application package implementation.
- Do what matters: prioritize, act, repeat
Doing what matters means picking the right priorities and then taking the right actions at the right time – all the time. One way to hone priorities is to build the initial proof of concept (POC). This effort should focus first on generating a small prototype in a critical area, such as supply chain. A few key aspects can be migrated first, and from there you move forward step by step. This initial POC exercise helps you to build a roadmap and to define key parameters such as timing, actions to be taken, recruitment of required resources and testing.
Unite disparate setups
What might migration look like in the real world? It’s not uncommon for enterprises – particularly those that have grown through acquisitions - to see legacy ERP configurations vary significantly as locations are added. This leads to poor overall supply chain visibility, difficulty in financial oversight and production site inefficiencies.
DGS — an international manufacturer of high-quality die casting components with locations in Switzerland, China and the Czech Republic — faced exactly such a situation. The company knew it needed to shift to more holistic business processes to achieve greater efficiency.
DGS worked with Avanade to upgrade to Microsoft Dynamics 365 on the Microsoft Azure platform. Using a hybrid agile approach, we helped integrate Dynamics 365 for Finance and Operations to harmonize the DGS IT landscape and business processes – including finance and supply chain – in the cloud. The platform also integrated with the company’s production control systems to improve data quality and ensure proper processes.
Now, DGS financial managers get the information they need to make better, more informed decisions and close their books at a faster rate than ever before.
Simplify the shift
To streamline large scale cloud migration, Microsoft Dynamics carries significant built-in functionality which minimizes the need for customizations. Additionally, Avanade’s Intelligent Enterprise Solutions (AIES) helps to converge your business processes towards industry best practices in a way to limit customizations to areas or features which truly provide a competitive advantage. When needed, customization occurs on a Microsoft future-safe architecture.
For the manufacturing sector, nobody can say that migration to the cloud can be realized without thought and effort. Every business has its specific needs. But a clear roadmap, the right tools selection and an experienced partner can ease the move significantly.