With regards to ERP, what is a hybrid deployment method?

A hybrid deployment method has the potential to enable customers the flexibility to deliver ERP capabilities in the most cost effective manner to users. Hybrid deployments would allow for an optimal mix of the major ERP delivery models:
· On-premise
· Hosted
· Public Cloud
· Private Cloud

A hybrid deployment approach enable customers to have a more scalable ERP solution versus limiting their sizing options to a single deployment model. Four major factors determine how viable a vendor’s hybrid ERP deployment offerings are:

1. ERP architecture: Is the ERP solution constructed in such a way that allows software components to reside in multiple delivery platforms (on premise, hosted)? Integration and orchestration of ERP activities are key software enablers to support hybrid delivery.
2. ERP partner ecosystem: Does the ERP vendor have consistent, reliable partners with a portfolio of hardware/software and professional services to support multiple hybrid delivery models?
3. ERP pricing model: Does the ERP vendor allow customers to utilize multiple delivery methods concurrently? Are there any price penalties or legal restrictions imposed on customers from moving between delivery models?
4. Portability: Customers have the ability to move data and customizations from one deployment model to another as needed.

From a 40,000 perspective, a hybrid ERP deployment refers to a situation where ERP functionality is provided via two or more delivery models. Most commonly, we see this where a company uses on-premise ERP for certain functions and SaaS ERP for others.

A major benefit to a hybrid approach is that companies can take the SaaS model for a test drive without having to put the heart of their operations into the cloud. Under this model, businesses can wade into the SaaS game by testing peripheral functions. We see many businesses trying this with sales, field service, HR and business intelligence (BI) functionality.

One reason why these areas make good test cases is because they're often tied to mobile access needs. And, a SaaS-based delivery model facilitates any-time, anywhere access. So, a sales person might be able to place a sales order from a customer site. A field service technician might be able to check inventory availability while repairing equipment at a customer site. Travelling employees might be able to log expenses. And, travelling executives might be in a position to stay on top of company performance while doing road-shows.

To the end-user business, a major benefit relates to the timeliness of the transactions. Inputting key data in near real time improves the business' ability to forecast and manage cash flow, among other things. In a nutshell, it gives the business an opportunity to become more agile, more responsive.

However, there are potential drawbacks. Businesses that deploy ERP in a hybrid fashion not only position themselves to experience the benefits of both methods, they also set themselves up to experience the costs and risks of both methods.

From a financial perspective, a business might ultimately pay more to support a hybrid approach than it would otherwise pay if it settled on one delivery model. For example, a company might have to incur the heavy upfront infrastructure investment to support on-premise ERP and, at the same time, pay the vendor subscription fees for SaaS ERP that includes the vendor's own infrastructure costs.

Contractual risk is another area that should be evaluated. An end-user company will have to manage multiple contracts or, if the same contract, very different terms governing each of the deployments. The tricky part is figuring out how the obligations are shared among the parties. For example, in many cases the end-user company assumes certain responsibilities for on-premise systems that are assumed by the SaaS vendor. At precisely what point do these responsibilities shift? When is the hand-off made? Before moving to a hybrid approach, businesses would be well advised to structure an appropriate allocation of rights and obligations.

I don't see why ERP should be different than any other Enterprise application with regard to hybrid architectures. Clearly the partner management and customer portals are prime targets to move to the cloud with VPN connections back into the databases housed in the data center. The Web and application servers should be placed behind reverse proxy servers making it difficult for hackers to penetrate the security perimeter in the cloud and work their way back into the DC. For additional protection, the enterprise could expose the cloud interfaces through content delivery networks.

A hybrid deployment model for ERP refers to mixing cloud or SaaS solutions with on-premise ones. During the analysis phase, businesses should consider how a potential vendor’s deployment method promotes or inhibits the business objectives. When looking at department level information or processes, businesses may find conflicting answers and this is when a hybrid model may need to be considered.

The benefits of a hybrid model include being able to offer best-fit solutions for certain parts of the organization rather than forcing a one-size-fits-all approach. For example, members of a mobile workforce (sales, service providers, executive teams, etc.) can be more effective and informed when they can access accurate, timely data outside of the office. Cloud solutions, delivered over the internet, already include the infrastructure to support this. Depending on whether or not private or public clouds are used, additional layers of security may be required, but if the benefits outweigh the other considerations, then this can be a good way to go.

When cloud solutions are delivered as a SaaS model, it can also be easier for businesses to scale up and down without having to carry high licensing costs when demand doesn’t warrant it. For example, for an organization whose remote workforce ebbs and flows on a regular basis, cloud pricing and its ability to scale quickly can be compelling reasons to consider hybrid ERP solutions.

But there are drawbacks too. While some ERP vendors offer both flavors (cloud and on-premise) of the same solution, many have put their feet firmly in one camp or another. Or perhaps the vendor started out on-premise (the traditional approach) and has recently released a cloud offering. In either case, it’s critical to understand how one interacts with the other. Are there delays, limitations, hidden fees to improve the integration? Beware of software that doesn’t play well with others. All the promised benefits of the hybrid approach will quickly disappear if the integration isn’t seamless.

Security is another concern. A large part of ERP data isn’t transient in nature. It’s a significant business asset and it needs to be secured as such. Proper data modeling can help organizations identify data that is deemed to be mission critical and perhaps shouldn’t be shared or modified outside the immediate enterprise. On-premise solutions aren’t immune from data security concerns, of course, but the more an organization ‘splits’ a solution, the more security needs to be a part of the discussion. Understanding where the gaps may be and how best to fill them is essential to providing a safe and beneficial solution to the business.