Published on the 10/03/2015 | Written by Beverley Head
On premise ERP systems are still core to the majority of A/NZ enterprises – with cloud software still perceived as a bit player according to UXC Red Rock…
Speaking last week at its 10th UXC Red Rock/Oracle leaders forum in Sydney, managing director Jonathon Rubinsztein said that the company was still enjoying a “fair amount of growth in ERP”.
“On-premise ERP is still core to most businesses, there is very little out there that can replace that core.”
Cloud systems could be used for point solutions adjacent to that core he acknowledged. However Rubinsztein said on-premise ERP still offered the best value for enterprises.
“If you use 20 different clouds by 20 different vendors I debate whether the total cost of ownership is less than with an integrated solution,” he said, adding that the integration challenge associated with 20 different clouds would be significant.
Carl Powell, group CIO of New Zealand-based Fletcher Building characterised core ERP systems as being the equivalent of a “tanker” driving the business forward, while point solutions and cloud applications should be seen as “speed boats” darting around it.
It’s Fletcher’s characterisation of what Gartner has described as bimodal ERP – where the IT department’s efforts are split between building and managing the tankers, and integrating speed boats where the business needs them. Powell, for example, has appointed a chief digital officer and established a digital innovation lab to roll out digital solutions – speedboats – where it makes sense.
“You can’t get away from the tanker, but we need the speedboats as well,” he said.
Fletcher Building has had some challenges with its tanker however, and when Powell joined the business he discovered no fewer than 72 separate ERP instances across the business. He has now consolidated that to three: JD Edwards, Infohrm and SAP.
Powell said that he did not hold with wholesale outsourcing of applications, preferring to operate them largely in-house, but recognised that it was not possible to scale at the speed the business needed without external support – hence the relationship with UXC Red Rock – and the need for fast deployed cloud solutions in the layer one up from the ERP platform.
Peter Conroy, group manager of enterprise systems, at BIS Industries said that he saw an enterprise role for cloud, but at an infrastructure level rather than as SaaS. “We have a lot of cloud in the technology layer. As an applications manager it is almost completely irrelevant what it runs on.”
Conroy said that the degree of customisation that the company had in its ERP platforms made it unlikely that it would ever select a SaaS ERP, although the option to run the ERP in a private cloud was still there.
“Cloud to me is a point solution,” he said.
