In this blog series, we will explore the various pathways to the cloud, highlighting key questions to consider during your journey. We’ll examine the different options available to you and guide you on how to approach your initiatives effectively. Additionally, we’ll discuss strategies that can support you in achieving successful delivery and implementation. In part one, we will provide insights, benefits, drawbacks, and models for moving to the cloud.
For the entire story, watch the webinar ERP Endgame: Avoiding Sinkholes with Chess Level Strategies in Oracle Implementations with Bruce Maghan, VP of ERP and Project Solutions at Project Partners, below:
Pathways to Oracle Cloud
In the current landscape, all paths lead to the cloud for Oracle. There are three main pathways to help you transition:
- Migration from Oracle E-Business Suite (EBS) to Oracle Cloud Infrastructure (OCI).
- Migration to Oracle Cloud Enterprise Resource Planning (ERP); whether you are an EBS client or coming from a non-Oracle system.
- Hybrid approach: Keeping EBS in place while implementing certain cloud application components, allowing you to work with both models simultaneously.
Key drivers for moving to the cloud:
The first step is to focus on what your business does best, rather than managing your infrastructure.
By moving to the cloud, you can shift away from managing databases and servers, as well as keeping up with database administrators (DBAs). This transition can lead to a 38% reduction in total ownership costs, which is advantageous. You will also decrease capital expenditure (CapEx) on maintaining hardware. Moreover, you can experience a 30% improvement in performance with the cloud model. Other benefits include ten times faster reporting, better availability, quicker technology refreshes and patching, and enhanced scalability. These advantages often remain hidden until clients embark on the migration journey and complete the process.
Additionally, you can have an ERP solution that is continuously updated, whether you are using Oracle Cloud Applications or migrating E-Business Suite (EBS) to Oracle Cloud Infrastructure (OCI). Oracle has divided the patching process for EBS into two categories: tech stack upgrades and application upgrades, both of which are provided on a continuous basis. Furthermore, there are changes in how you can upgrade your application sets, allowing you to update your applications independently. For instance, if you’re on version 12.2.12 and wish to upgrade to 12.2.14 without moving other instances to the same version, you can do so.
You also gain access to applications with built-in generative AI capabilities. With the Oracle Cloud ERP offering, integrated generative AI capabilities are updated quarterly as new features are released. In contrast, EBS does not offer these generative AI capabilities natively within the application. However, if you upgrade to the Oracle Database version 23ai, you can begin to develop more generative AI capabilities on your own.
Option #1: EBS to OCI
If you look at it from a pro’s perspective, there’s minimal change management involved with EBS to OCI because you’re not changing the user interface. Users are accustomed to working in EBS, and the only difference is that they will use a different URL to access the instance. Also, your processing remains unchanged. You run the same set of jobs, your extensions are in place, and there’s no data conversion involved. So, you’re not migrating from one ERP to another.
Moving to OCI is a quicker rollout model than transitioning from EBS to Oracle Cloud ERP, primarily due to the existing change management items already in place. Additionally, no data conversion is involved. This is a significant item for many of our clients, who are considering it from the perspective of utilizing numerous extensions, integrations, and/or customizations. By lifting and shifting to OCI, customers benefit from the cloud without worrying about the problems they might encounter during migration to Oracle Cloud ERP.
Some drawbacks to this approach include patching. With OCI, it’s still up to the customer to ensure that update patches are regularly applied. Whereas in the Oracle Cloud ERP environment, patching occurs on a quarterly basis.
Additionally, there’s a lack of application-based Generative AI. You can utilize Generative AI in EBS; however, it requires more work for users to implement it.
Option #2: Oracle Cloud ERP
From a pro’s perspective, your applications are continuously improving on a quarterly basis due to the regular updates. You benefit from Generative AI capabilities integrated within these applications. Additionally, by utilizing Cloud ERP—especially when leveraging Oracle Integration Cloud (OIC)—you gain near real-time integration capabilities.
This setup enables you to utilize event-driven REST APIs, which facilitate seamless integrations both within Cloud ERP and with third-party products. For example, if you complete a task on a project, you might need to notify the next person that they are ready to proceed.
One of the events supported is a change in task status. When you mark a task as completed, this triggers an event that activates the REST API. The API will execute the necessary code logic for that integration and carry out the required steps, moving away from the traditional batch processing model we have used in the past.
On the negative side, this model involves significant change management. While this is not intended as a deterrent, it is crucial to recognize. Your change management will encompass not only the changes in business processes associated with Oracle Cloud ERP, since it is a highly process-driven solution, but also user interface changes. The screens will look different; while they will retain some similarities, their design and behaviors will evolve.
Furthermore, the delivery timeline will be longer when transitioning from EBS to Oracle Cloud ERP, as data conversions will be necessary. Managing these change elements is essential throughout the process.
Option #3: The Hybrid Model
There are two scenarios you might encounter in this area. The first scenario involves setting up one application on Oracle Cloud, while the rest of the ERP framework is maintained on EBS. For instance, you could implement HCM Cloud while still using EBS Financials, SCM, and Projects.
The second scenario involves a single entity within a multi-organization setup that is fully utilizing Cloud ERP, while the rest of the global organization remains on EBS. In this case, the entity on Cloud ERP will need its own ledger.
A potential question in this situation is, “How do I support this transition to either of these models?”
If you choose the first option, where Oracle Cloud applications are used in conjunction with EBS, Oracle provides integrations between Cloud ERP and EBS. However, in the second scenario—where one entity is on Cloud ERP and the rest of the organization is on EBS—it’s essential to consider factors such as maintaining separate ledgers.
If you need to consolidate ledgers, using a tool like EPM can help streamline the process. However, you may also have other third-party products that require integrations involving both the EBS solution and those additional solutions.
In Conclusion
In conclusion, the transition to Oracle Cloud provides a robust and flexible solution for organizations seeking to improve their operational efficiency and scalability. By choosing the right pathway—whether migrating from Oracle E-Business Suite or exploring Oracle Cloud ERP—businesses can unlock the full potential of cloud technology. Embracing this change not only prepares companies for future challenges but also positions them to thrive in an ever-evolving digital landscape. The journey to the cloud may be complex, but the benefits it brings are well worth the effort.
Stay tuned for part two, where we will explore essential questions that organizations must reflect on for success and strategies for implementing a cloud-based ERP solution.
