More businesses are transferring their enterprise resource planning (ERP) systems to cloud computing or starting their ERP in the cloud. A 2014 global survey by Epicor Software Corp. found that 64% of businesses favor cloud deployment for their ERP implementation “or the ability to mix and match cloud, on-premises or remote servers.”
Epicor noted that “ERP users are bullish on ERP capabilities, including mobile, social and cloud, believing they offer new and exciting opportunities for improved organizational responsiveness.”
Similarly, the information technology research company Gartner reported in 2014 that 30% or more of “service-centric companies” will relocate most of their enterprise resource planning applications to the cloud by 2018.
“Longer term, over the next 10 years and more, we envision a scenario where more of the market ‘flips’ to the cloud,” Gartner’s research vice president, Nigel Rayner, said in a statement.
Although some companies have been reluctant to migrate to cloud-based ERP solutions due to concerns about the vulnerability of their data, they may reconsider as they recognize that ERP cloud solutions can provide superior user experiences.
This could generate a growing need for cloud-based ERP solutions and innovation in cloud ERP solutions in order to keep pace with marketplace trends.
Cloud ERP solutions can provide numerous benefits. Cloud computing facilitates the sharing of software and digital information, and technological resources. It can lower costs by operating on a pay-per-use model so that companies do not have to invest heavily in infrastructure. In addition, information technology (IT) functions, including support, maintenance and security, may be outsourced. Similarly, the purchase of hardware, software licenses, and annual hardware and software maintenance support contracts may be unnecessary. Overall, enhanced performance, ease of deployment, increased scalability and faster response time are among the potential benefits for organizations considering a transition to cloud-based ERP.
Although the cloud is becoming the standard infrastructure method for IT, some data storage and other functions are likely to remain on-premises aspects of daily operations. For example, a business may use the cloud for resource-heavy parts of ERP systems, such as transaction management, while keeping other ERP processes in-house. These so-called blended deployments can enable businesses to transition into the cloud while maintaining a consistent customer experience.
Hybrid, two-tier ERP options combine cloud functions with on-site functions. IT managers, chief information officers and chief technology officers should identify business areas where a cloud provider can benefit operational efficiency, as well as which functions are best kept in-house, behind company security measures.
ERP solutions can provide value to a business in the form of improved efficiency, performance and productivity. The implementation of enterprise resource planning systems can also lead to reduced operating costs, tighter control over marketing, production and inventory, enhanced tracking and forecasting, improved customer service and satisfaction, and stronger interdepartmental communication.
Although the growth of cloud computing is transforming and revitalizing the ERP market, Epicor Software’s survey found most organizations don’t want to be forced to choose between cloud-based and onsite solutions.
“Flexibility in deployment models, including a hybrid cloud/on-premise deployment option, should be a natural progression for ERP vendors,” the company’s chief marketing officer, John Hiraoka, said in a statement.