When should you move from Oracle HCM E-Business Suite to Oracle Cloud HCM?
If you work with Oracle Applications in any way, be it as an end user, consultant or partner, most days you’ll have an email in your inbox promoting Cloud technology and the benefits it can bring. For Oracle E-Business Suite (EBS) customers, the pressure to ‘go Cloud’ is relentless and author bias permeates many articles on the subject.
How can you cut through marketing spin and evaluate when a move to the Cloud is best for you?
Every week, I meet with EBS customers across the world in a variety of industries. People speak to us because Applaud brings an enhanced user experience and mobile apps to customers’ existing Oracle E-Business Suite (EBS) systems, allowing customers to achieve a Cloud-like user experience whilst retaining their core system of record. The number #1 reason people move to a new HR System is for an improved user experience and mobile access so I’m always interested to ask about their Oracle HCM Cloud Strategy, particularly in relation to them replacing Oracle EBS components with Oracle’s Cloud based solutions.
Broadly speaking, most customers I speak to are considering one or more of the following options:
- Rip and Replace: completely get rid of Oracle E-Business Suite HCM and replace with a brand new Cloud based system of record, usually choosing between Oracle HCM Cloud (née Fusion), Workday or SAP Employee Central.
- Enhance: Remain on EBS for applications such as Core HR and Payroll but consider bolt-on solutions such as Oracle Talent Cloud or Applaud that modernize your HCM estate and replace certain parts of your HCM suite
- Stick with existing EBS applications but move the infrastructure into a managed, hosted service.
- Stay busy – keep up to date with Oracle updates and legislative features but no immediate move away from Oracle E-Business Suite.
Should you rip and replace?
ERPs, by their nature, are very ‘sticky’. Core HR, in particular, is a tremendously deep rooted part of any company’s IT estate with interfaces shooting out to every other internal application or 3rd party system that needs to know who your employees are. It’s not uncommon for us to speak to large companies that have over 100 interfaces spewing out of Core HR.
If you’re ripping that out, that’s a lot of integration work to untangle and it’s almost always ‘bespoke’ work too – adding cost, time, disruption and risk to any replacement project. If you have a well implemented, stable and reliable Oracle E-Business Suite Core HR and Payroll system running (perhaps integrated to Oracle Financials?), there needs to be a rock solid business case behind such a strategy.
A lot of the early Oracle HCM Cloud customers were Greenfield sites – customers with no HCM system of any note. There were very few EBS ‘rip and replaces’ going on. In 2017, we do hear of several large globals that have made the decision to go that way. You usually hear these customers talking about ‘programs’ rather than ‘projects’ (think big dollars and a long duration) and have involved decision making cycles that can take up to a year of internal analysis. The latest Sierra study shows that a Cloud based implementation for medium to large organizations is comparable in cost and time to an on-premise project of similar scope. For existing EBS customers, it’s not a path to be taken lightly.
It’s not often I speak to a customer and think “Those guys really need to get rid of Oracle EBS and start again.” But there are exceptions – some examples:
- One large global Oracle EBS customer of around 20,000 workers was merging with another company of around the same size. That second company used PeopleSoft. Naturally, the customer wanted a single source of truth for their worker records and was looking for options long term. They came to us because one option they were evaluating was building a presentation layer that spanned both systems and delivered a consistent user experience across the new organization.
Another alternative was to migrate the PeopleSoft data into the EBS system (or vice versa), an approach that would have required a heinous data migration project and a potentially tricky conversation with Oracle over license migration.
To integrate their two existing systems this customer was looking at an invasive and expensive project whichever course they took; a strong candidate to start from scratch with a well-planned Cloud deployment.
- EBS HCM is a very deep system with lots of feature functionality but there are customers who have instead bought many disparate HR systems and stitched them together with interfaces. Now and again, I speak to customers who have separate applications for Core HR, Absence, Payroll, Time Recording, Performance, Recruitment, Benefits and more. If you combine that spaghetti of systems with a poorly implemented EBS Core HR that has bad work structures and ‘dirty data’, well, you’ve got a strong case to start over.
Most customers of a certain size recognize the ramification of ripping out their core systems of record and are naturally reluctant to make that step. However, you can still realise benefits the Cloud brings whilst retaining that long term investment in Oracle EBS.
Some of the less convincing reasons I’ve heard from customers for a complete HCM system replacement include:
- We want mobile apps for our HR processes and only Cloud offers those
- We want Manager Self Service and EBS doesn’t give us that
- We’ve never been able to get approvals working in Manager Self Service so are evaluating Oracle Cloud HCM. Yes, to all the Oracle EBS consultants reading this, this one was genuine.
If you really drill into what drives a customer to even consider an HCM rip and replace, you often distil certain key requirements that can be solved with bolt-on solutions that enhance rather than replace your existing Oracle E-Business Suite system.
The most common example of bolt-ons we see customers taking would be Oracle Cloud Talent Acquisition (née Taleo) for recruiting and on boarding. Oracle has done a methodical job of migrating their installed EBS and PeopleSoft clients onto their Cloud based Recruitment app. Oracle Cloud Talent is another ‘bolt-on’ that has done well. Some newer products, like Wellness apps, are only available in the Cloud giving customers no choice about the deployment model.
At Applaud, we consider our offering as a bolt-on solution that falls into the ‘Enhance’ category alongside Oracle’s Cloud HCM bolt-ons. We are seeing a growth in interest from customers wanting to ‘improve not move’ by implementing a solution that retains their core system of record whilst bringing a Cloud-like user experience and mobile apps to their on-premise system.
We’re not the only ones. Oracle themselves are heavily pushing their Mobile Cloud Services platform which clients use to build their own custom mobile apps that integrate with their on-premise EBS, PeopleSoft and JD Edwards applications. This is an example of a Cloud based platform co-existing with your on-premise system as opposed to a Cloud based application like Taleo.
All these point solutions tend to be non-invasive and, crucially, they are employee and applicant facing which means there is a greater business case for usability and mobile access than, say, a new Cloud based Payroll system.
Enhancing Oracle is the most common strategy I find existing EBS clients are following. If Core HR and Payroll isn’t broke, don’t fix it but maybe look at a complementing product to bring your recruiting or performance systems up to date or to introduce mobile access for key processes. Not too disruptive, a project not a program, costs are controlled. You can start that journey to the Cloud without having to make that tough decision to rip out your core systems.
Infrastructure in the Cloud
I was catching up with an EBS customer I hadn’t spoken to in a while and asked how things were.
“We’re moving to Oracle Cloud in 4 weeks,” was the chirpy reply. Now this customer was the classic slow mover. Public Sector, stable Payroll and Core HR, integrated Finance, tight budget. I did a double take.
“You’re getting rid of EBS HR and Payroll and moving to Cloud HCM?” I asked.
“No, we’re moving to the Oracle Managed Service Cloud.”
Kudos to Oracle’s marketing team for rebadging the hosted / managed service model that’s been around for decades and getting customers to call it ‘Cloud’. For anyone that’s been around long enough, the Oracle Managed Service Cloud is the shiny new name for what used to be called ‘Oracle On Demand’ in the 2000s; the service where Oracle takes your EBS instance and hosts it on their own servers, relieving you of the need to manage your hardware and Oracle software in-house. The only thing new about the concept is the name.
Look past the rebranding and there’s real value to be had here. I’d recommend that every single customer running Oracle E-Business Suite in-house today should investigate the move to a Managed Service provider. Over the last couple of years, I’ve seen a noticeable shift in EBS customers – large and small – migrating their in-house servers and software to a managed service provider. In the US and UK (our two largest markets), I’d estimate 75% of the customers that use Applaud have implemented our software on their Oracle instance running in a managed service.
Why the growth? Well, cheaper Cloud based technology like Amazon Web Services or Oracle IAAS have opened up the market to competition. The model is mature with well-defined procedures and automated processes in place.
No longer do you have to wince at the eye-watering fees that Oracle On Demand used to charge to upgrade you from 11i to R12. Oracle Managed Service Cloud has competitive pricing and they are kept on their toes by similar offerings from the big boys like IBM, down to the boutique providers like Claremont and Core who compete by providing a more personal and specialist service.
Looking at moving your existing Oracle ERP into a managed cloud is a great way to start your Cloud journey. Most customers see immediate cost benefits and the process for migration is now well established and smooth. You retain your existing, working system so it’s not disruptive to your business or end users. When you want to upgrade to 12.2, wouldn’t you rather use a team that’s done it many times before for other clients rather than wait for your in-house IT team to spend weeks of analysis on how to go about it? And, let’s face it, is worrying about in-house servers, Oracle patching and disaster recovery really a strategic part of your organization’s operations?
Often mislabelled as the ‘Do Nothing’ option, in reality every Oracle customer will be busy doing something. Whether it’s keeping up with the latest legislation, upgrading to a new Oracle release such as 12.2 or just working on internal projects, every team running Oracle E-Business Suite will have their hands full on a day to day basis.
Despite the noise around Oracle HCM Cloud, a lot of customers still have a long term commitment to Oracle E-Business Suite. When asked about moving wholesale from Oracle E-Business Suite to Oracle HCM Cloud, common responses from these customers include:
- We’re going to evaluate Oracle Cloud products in a couple of years
- We’re going to upgrade to 12.2, use EBS for a few more years and then look at Oracle Cloud after that
- We’ve looked at Oracle Cloud and it’s not yet got the features we are looking for
- We’ve looked at Oracle Cloud and there’s not enough of a business case to move
Occasionally, I’ll talk to a customer that is anti-Cloud for security and data privacy reasons but it is increasingly rare – certainly compared to a few years ago – and usually misguided.
If you fall into one of the above camps, you might be feeling a little stressed as you’ll constantly be reading articles telling you you’re late for a party or maybe you won’t get a seat at a table somewhere. Relax. You’re in good company; I speak to many organizations who are taking their time over a move, especially those that have a well implemented, well maintained and stable Oracle EBS instance that is paying their staff accurately and on time.
Talk to your Friends
It’s a cliché to say you need a Cloud strategy. What everyone working with Oracle Applications needs is to be is pragmatic and honest when considering the business challenges with your current Oracle HCM implementation. Make sure you are educated in the alternatives available to address those challenges – they don’t all involve spending a lot of money and time throwing away your existing HCM estate.
Most importantly, if you are considering a major move to the Cloud, talk to another customer. Not a vendor representative like me. Not an Oracle partner that has a vested interested in a juicy service contract. Not an Oracle salesman who is only going to give you one message. We’re all biased and have vested interests.
Find another customer to talk to, someone that has gone through what you are planning to do and can evangelise the benefits and prepare you for the challenges. Oracle Cloud HCM turns 5 years old in 2017; the customers are out there. Insist on speaking to one of them.
Do any of these situations ring a bell?
- Is your current Oracle system so badly implemented that you need to start again or do you have a smorgasbord of interfaced applications? Fine – rip & replace.
- Is your Core HR and Payroll stable and well implemented but certain HCM processes need some modernization? Enhance with some new bolt-ons.
- Do you have immense pain when it comes to Total Cost of Ownership and system upgrades? Explore Cloud Hosting.
- Is it all working fine except for the poor user experience and lack of mobile apps? That’s my favourite – look at Applaud.
I did warn you about author bias.
If you’d like to know more about Applaud and how our solutions could benefit your workforce please get in touch.