Is This the End of Enterprise IT Systems?

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Enterprise IT systems will continue to play a critical role by making business processes more consistent and by ensuring more effective security and integrity.

A Hybrid Model

A hybrid model allows an organization to take advantage of the benefits offered by the new solutions in terms of cost and flexibility, while preserving those of the traditional enterprise systems. 

One mobile technology provider, for example, is effectively combining its global ERP system with local systems in various geographies that support specific jurisdictional and national requirements, after deciding that it would be too expensive and take too long to extend its full ERP system into those locations. The company achieved the right balance between global consistency and local relevance by using a rapidly deployed, cost-efficient and agile on-demand system for business management and financial consolidation, and then ensuring the integration of its data and performance environment with its existing ERP backbone. 

This two-tier ERP implementation offers the organization closer control and governance by enabling the interoperability of the ultimate solution, while still giving different geographies and parts of the business the cost-effective flexibility needed to achieve their urgent goals. This includes having cloud providers offer pay-as-you-go access to ERP functionality.

Holding everything together becomes more complicated and exacting with the hybrid model. Where traditionally the CIO was in charge, this new hybrid IT environment presents a far more daunting challenge.

A business may have a core ERP system running simultaneously with a variety of cloud environments or services, along with a sprinkling of other legacy systems. These might be managed by both external vendors, including the ERP provider, and internal staff. Managing the end-to-end performance of this far-flung IT environment, with its complex array of moving parts, may be beyond the capacity of both the company using the IT services and its service providers. 

As a result, more companies are moving toward using an integrator to provide end-to-end visibility and service assurance. Integrators typically work either in a consulting capacity—helping the client create a managed umbrella over broader ERP and on-demand environments—or as a managed services provider that assumes responsibility for overseeing both the internal and external computing platforms. This includes taking on the associated risks and offering end-to-end service management capabilities.

Another important innovation has been the move toward industry accelerators for hybrid ERP/cloud solutions. Best practices in a particular industry can be identified and then used to accelerate an ERP implementation, as well as the other SaaS or cloud services that may be appropriate for an organization in a particular industry. 

An example of this was the approach taken by one of the world’s largest gold mining companies. As the company grew, it found that its existing business processes, systems and data had become fragmented and outdated. A new IT program that leveraged leading industry practices and templates from a natural resources-specific, preconfigured, vendor-provided solution made the company’s systems more efficient, improved visibility of operations, and gave its executives the data needed to design their business strategy and improve operational decisions. 

On-premises ERP systems will continue to play a vital role in the future, even as the broader IT environment becomes more modular and incorporates local varieties of business functions into the core system. Effective integration and management will remain the most important keys to success, and the challenge will be to put all the links together in a way that makes the solution both strong and flexible.

Mark Willford is the technology ecosystems and offerings lead at Accenture.

This article was originally published on 2013-02-07
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