Early adopter move to cloud ERP despite expected bugs and it being ‘painful’.
The company behind Tesco’s Clubcard scheme will become one of the first to run ERP from the cloud after signing a deal to virtualise its back office IT with Oracle.
British data science firm Dunnhumby will use Oracle’s Fusion cloud to replace a number of back office functions next March, when it will rip and replace its existing on-premise systems.
Andrew Hamilton, global head of strategic planning, said that replacing its multiple legacy systems with one software partner means data can flow from one piece of software to another seamlessly.
He did not reveal the legacy systems currently in use on-premise, but told CBR: "We’re compensating today maybe for poor processes or systems that can’t talk to each other, having to move stuff around on a spreadsheet for example.
"We’re automating the way some of this data flows between these systems and the way reports and consolidation happens. We’re trying to give a mobile sophisticated workforce the facilities they need to do their jobs easier and make decisions faster."
Dunnhumby’s three-year deal includes using the Cloud based Oracle Sales, Marketing, HCM, Hyperion Managed Cloud Service, Business Intelligence Applications Managed Service and ERP.
Hamilton admitted that the last one in particular puts the data science firm in a small list of early adopters, with Oracle rival Sage recently saying most customers are not interested in cloud ERP.
"We’re on the leading edge here. I’m sure when these [cloud ERP] products do launch there are a lot of bugs and it is quite painful," Hamilton admitted.
"But the commitment and the customer base wanting to make this transition is increasing. That mind shift is starting to happen."
He said the advantage for Dunnhumby is outsourcing a complex IT system to experts in the field.
"It’s a big thing to rip out on-premise systems. It’s a big investment. But it’s not core to our business so I’d rather let the experts do it," he explained.
Sage ERP CEO Christophe Letellier said firms were wary of cloud because it forces them to standardise their ERP, but Hamilton said an advantage was that there was no longer room to tinker with their system.
"It doesn’t give you a lot of choice to over-customise the solution and get yourself caught three or four versions behind the software. We’ve learned some hard lessons in that," he told CBR.
"Some of the systems we have today are very costly to upgrade now because you almost have to start over."
Hamilton did not reveal the expected efficiency savings, but said there was a "very robust business case" for moving to the cloud.