As a wide variety of information technology services move to online offerings in the cloud, is it but a matter of time that Enterprise Resource Planning (ERP) systems will follow? I certainly think so. While 'fringe' ERP services like HR and CRM processes have moved to the cloud, core processes such as financial and supply chain operations have not followed suit as quickly. However, there are signs that this is changing. NetSuite has released its workflow management software on a cloud backbone that can be configured and customized for business processes such as customer notifications, sales processes for follow up, customer record management and SLA enforcement. Bigger players are also getting into the game. SAP recently announced that its HANA platform–based applications will be available via the cloud, and Oracle is responding with its Cloud Services to deliver an enterprise grade ERP cloud solution.
What are the benefits of cloud-based ERP? There are many, chiefly those that address the challenges of on-premise ERP. The main advantage is its lower cost, with its plug-and-play features, subscription-based model and the ability to pay for only what you use. Moreover, since vendors are usually responsible for the support and maintenance of the cloud-based ERP, operating costs are lower as well.
Another advantage of cloud-based ERP is the flexibility and scalability it offers. Most vendors today offer bolt-on applications, making it easy for companies to scale as necessary. In addition, the low upfront costs, elasticity in pricing models and the ability to integrate with the HQ master ERP systems, provide unprecedented flexibility to deliver the desired outcome without worry of software licenses, infrastructure updates, patch management etc.
How are the new trends like mobility and Big Data driving ERP on cloud? The growing trend of enterprise mobility can help companies gain higher value from the cloud-based ERP due to:
- Improved operational efficiencies (employees have anytime-anywhere access to critical data)
- The ability to extend business to new markets and geographies (lower investments in infrastructure and connectivity)
- The ability to integrate other enterprise mobile systems (MES, mobile field forces, sales, inventory tracking, etc)
And what about Big Data? One of the biggest sources of the data in manufacturing is from the ERP. So far, the manufacturing industry has been under performing in its use of data. There is, however, good news round the corner. Big Data generated by manufacturing is forcing cloud adoption – which is where data is being stored, cleansed, sliced, diced and analyzed using massively advanced analytical engines that can remix data from numerous conventional and unconventional sources.
At the moment, ERP in cloud is poised to play a major role in manufacturing. As organizations attempt to increase flexibility, enhance customization, lower costs and drive the integration of emerging technologies, cloud will become central to success. Cloud is not just reshaping the ERP landscape, it is transforming it!