02 August 2019
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Few business leaders today would question the wisdom behind the general trend towards cloud migration. The benefits of moving key business operations and data needs to a third-party service provider, whether that's through Iaas, PaaS, or SaaS, have been talked about until words like ‘agility' and ‘digital transformation' have paled into cliché.
However, back-office applications, such as human capital management (HCM) and financials, have been slower to make the move. According to Computing's recent research in this area, carried out in partnership with Workday, around a third of back-office applications are currently hosted in the cloud. While many of those surveyed expressed plans to move their on-premises back-office operations to the cloud, some areas, including accounting and financial planning, saw as many as 30 percent of participants say they had no intentions to migrate these applications.
Of course, not every business process is necessarily better off making the move, and compliance considerations can occasionally preclude it completely. However, in this case, the key barrier uncovered in our research is migration complexity - with 41 percent highlighting this as a main factor.
Cloud service providers today are rapidly fine tuning how they help customers smooth the migration process, sharing their expertise and best practices from having done the process countless times before, and ensuring that they're a right fit for the end user in the first place.
Risk aversion
However, there is a more ingrained, habitual way of thinking at play here. For the cloud decision maker on whose shoulders the responsibility of any migration would sit, there is a risk versus reward conundrum at play, Not purely at the business level - they will likely be aware of the benefits of a successful migration - but on a personal one. They know that continuing with their on-premises solutions, which may well be working as intended, with no complaints from colleagues, won't see any negative backlash. On the other hand, they fear the potential upset that could be caused by a cloud migration gone wrong.
Investopedia defines Business Risk as, "the exposure a company or organization has to factor(s) that will lower its profits or lead it to fail."
Specifically, you would consider any type of technology infrastructure change as an internal or operational risk. The crucial day-to-day operations of the organisation are at stake. When migrating back-office applications, failure could mean serious disruption, including employees going unpaid (due to a failure in a payroll system), or invoices not being processed.
Innovate or die
This is the wrong way to think about cloud migration. Firstly, properly mitigated against, and planned, cloud migrations are far simpler and lower risk than they used to be. Secondly, the mantra, "If it ain't broke, don't fix it" only applies in a vacuum. It's not enough to simply stand still as a business. In today's changing technology climate, failing to innovate business processes is effectively going backwards. In other words, not innovating has become the far greater risk.
In order to attract the retain the best talent, and get the best out of them, your organisation needs to be able to capitalise on modern advances is cloud-based ERP and financials - not to mention the business insights that come with such applications.
Risk is, of course, a natural part of doing business - it is a process of calculated strategy and investment. The difference between those who succeed and those who fail is sound judgement, preparation, and risk management strategy.
When it comes to back-office technology. Don't think in terms of ‘default' choices - on-premises is not the default and cloud the exception. Instead approach objectively, weighing up your organisation's needs against the solutions, putting personal risks aside, and trusting in the process and the outcomes.
After all, according to Computing research, over three-quarters of those who have migrated financial and HCM applications to the cloud believe the advantages outweigh any perceived disadvantages.
This article is from Computing's Cloud ERP Spotlight, hosted in association with Workday.
