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Oracle on Premise (EBS-R12) or Cloud (Cloud Fusion App) – Which way to go?

Sanjay Kulkarni
August 1, 2019

Making the right decision when you have multiple options can be problematic. With the evolution of cloud Saas (Software as Service) offerings in the ERP space, decision makers in IT departments must choose between on-premise and cloud applications. They have to decide whether to upgrade to the latest on-premise EBS-12, or move to Fusion Cloud apps. But which is the best decision? While many decision-makers are still scratching their heads, there are 3000+ businesses that have decided and implemented Oracle Cloud Fusion.

Up until the last few years, this was not an issue. CIOs, VPs, IT Directors and senior managers were accustomed to using the tried and trusted on-premise Oracle R12, and happy to do so. Oracle on-premise R12 is established and popular across many industries and different user groups (Finance, Supply Chain, Manufacturing, Planning etc.).  Periodic upgrades (R12.0 to latest R12.2.8) make it more current and relevant to changing IT needs. With the emergence/evolution/offering of  the on cloud Fusion application, the dilemma began. During the initial release phase (Cloud App.) many R12 users chose not to consider it as serious option, but with more evidence, improved pricing models, operational costs and ease of use, industry leaders have started to seriously weigh their options.

Why is the decision so complex?

There are many  factors on a case to case basis which a company needs to address as a part of the decision-making process, but these are the most common:

  1. Change – Both products come with different platforms, user interfaces and processes. This change impacts everyone in the organization from top to bottom. Change comes with impact on expenditure and overall operational efficiency.
  2. Spending/ Investments – To spend now or to postpone? what are the organizational spending priorities and roadmap? The cost of maintaining a current system verses benefits of proposed change. The treatment of spending in financial books, invest & depreciate verses monthly subscription as expenses are important factors to consider while choosing one over other.
  3. Operational Impact – How this is going to impact on day to day business, internally and externally? What will the impact be on external business partners (customers, suppliers and service providers)? How are you connected with them in terms of day to day business processes? It impacts the entire ecosystem. Is everyone willing to adopt to change?
  4. Application Maintenance – Day to day maintenance post change is the key factor while choosing one over other. Impact on cost and operational matters are to be considered carefully.
  5. Employee Adoption – What is the average profile of your end users? Are they old and experienced or young and dynamic? Your employee demographics will help determine what is best for your your business.
  6. Scalability – How dynamic is your business and prone to frequent changes? How quickly will your business be able to respond to upcoming changes in terms of IT management?

 

There are multiple ways to handle each of the above factors:

  1. Permanent changes can be managed ASAP. Change assessment and management workshops may prove to be valuable tools.
  2. The use of financial decision-making techniques like Payback periods and Internal Rate of Returns can be used to asses and decide the financial impact of the decision.
  3. Detail studies on internal and external impact on business processes are a must before making a decision. They give great insight for which option to choose and provide inputs for project timelines and resultant costs during project execution.
  4. Implementation strategy is not enough. Your system will need to be maintained going forward to run on a daily basis. Managed Services can give you great insights into what best suits your organization.
  5. Oracle has committed its application unlimited program and offers periodic upgrades for scalability. Oracle support is available and service requests can be raised to deal with specific issues.

There are unlimited wants and limited resources. Overall IT budgets are shrinking, the number of technologies/ IT solutions available are growing, and businesses need to manage resources that are available allocated to them.

The big question is – How?

Jade Global can help you decide what best suits your business. Our Cloud 360 Assessment is a comprehensive assessment strategy that includes all aspects of Cloud implementation to eliminate or reduce any uncertainty and prepare your organization to successfully move to Cloud. At the end of this assessment, you will have a practical path that is aligned to your business goals. To learn more, visit cloud.jadeglobal.com.

About the Author

Sanjay Kulkarni: Senior Manager, Client Services.

Sanjay Kulkarni SME for Oracle EA. He manages offshore delivery for enterprise applications for North American and EU customers for Oracle EBS and Cloud projects. Sanjay is involved in center of excellence where his team is involved in development of tools, techniques and methodology for cost effective, customer centric solutions. He brings with him 25 years combined experience in Finance, Accounting, Taxation and Information Technology, 15+ years of experience in Oracle Financials systems implementation/system upgrades for various industries with more than 10 full life cycle implementations as techno functional consultant. Sanjay is associated with Jade for 13 years and works from Jade’s Pune delivery center.

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