Supply Chain Managers: Before Jumping to the Cloud, Remember Your Legacy

Managers should consider a hybrid IT environment that mixes both the traditional legacy systems and the cloud.


It’s the era of the cloud and everyone, from CEOs and division chiefs to vendors and analysts, are pressuring supply chain managers to rush into “the future” and employ cloud computing. But a savvy manager realizes complicated factors are involved and plans must be made carefully before making such a move.

This manager recognizes:

·         Companies in this industry tend to use complex and sometimes dated legacy systems that may not migrate easily without disrupting operations.

·         Before moving any data, it is important to consider who all needs access to it and where the inputs and outputs for that data lie.

·         Planning takes time; it’s important to sort data into categories (ease of implementation and impact to the organization) rather than hastily try to move everything to the cloud.

In the end managers realize that while, yes, certain elements may migrate to the cloud, and eventually almost all applications will make the move, the first priority is to ensure that they deliver the most beneficial business approach to all end users (i.e., the concept of being able to access anything – anywhere, anytime).

Therefore, managers should consider a hybrid IT environment that mixes both the traditional legacy systems and the cloud.

Why a Hybrid IT Approach?

Because some applications inherently prove more difficult to move to the cloud, the effort to do so doesn’t benefit the business. In fact, it can consume resources better spent in new features and functionality as well as applications that will differentiate themselves in the marketplace.

To develop and execute a successful hybrid IT environment, supply chain managers must consider some basic tenets:

No. 1: The cloud isn’t a perfect fit for every application. At least not in the short term. The supply chain is like a symphony with many different instruments playing in harmony to make enjoyable music. You have vendors and partners supplying components of that supply chain, and shifting your environment requires a great deal of planning and work to integrate them efficiently.

In addition, right now, the system probably delivers goods very rapidly and is cost-efficient. It’s a tried-and-true system. A just-in-time inventory system is a case in point. To make it work effectively requires a well-oiled machine, and legacy systems used for a long time are undoubtedly involved.

No. 2: Don’t make system updates without a compelling business case. If your mix of applications – legacy and otherwise – are already serving the purposes of your business and your customers, there needs to be a compelling business case to warrant a change.

No. 3; Gradual changes must be strategic in nature. Find the natural reasons that warrant updating your legacy applications. Which applications run on an old version of an operating system that is end of life? Is license support for any applications coming to an end? Is the platform itself end of life? This will help determine the pace at which you move your data and systems.

No. 4 Remember that the future isn’t just about tomorrow. Are you going to make a total migration to the cloud eventually? Most likely, yes. But, again, that doesn’t mean you have to do it all immediately. Make a plan to prioritize shifting from your legacy applications over a three-to-five-year timespan.

What a hybrid IT environment should look like

What entails a hybrid IT environment? Which systems, for example, should be retained in legacy environments and held from moving immediately to the cloud? iSeries, the workhouse of distribution systems for instance, can be converted to the cloud environment, but there’s an opportunity cost associated with it. 

Supply chain companies also, typically, deal with a hodgepodge of systems; some will be cloud-based, some provided through service providers and some through SaaS providers. These systems need to be integrated holistically, inclusive of third-party partners, depending on the supporting business processes. And the process can be exacerbated by mergers, acquisitions or other partner activity when you try to integrate all the systems to the cloud. Managers mustn’t lose sight of the end goal to deliver profitable services to the end user. See the forest through the trees.

Also, be prescriptive on cloud strategy and in the plan you put together to determine which systems will go to the cloud in the short-term, and which will go over the long-term. The best candidates are existing Intel-based platforms, where you’re porting from an equivalent operating system such as Windows or Linux. Other candidates are new applications in terms of a rollout; they should always be employed with cloud as a key consideration. In addition, are those intended to be device-agnostic, such as mobile applications. 

Supply-and-demand-chain managers must weigh all of their options before they make the move to the cloud. Developing a well-planned hybrid IT environment can help with this shift. Managers must:

  • Be judicious in employing a cloud-based approach.
  • Have a governance committee in place to help guide their approach. It should include all key vendors and partners, as well as key internal officers and managers.
  • Keep business goals in mind: greater flexibility and efficiency; increased performance and decreased risk; and availability, which also includes disaster recovery and business continuity.

Last, but not least, managers must hold their ground. CEOs, in fact, will understand if managers put their hybrid IT strategy in terms of business success; specifically, how moving everything at once to the cloud could impact opportunity costs and the bottom line.