The road to Cloud ERP (part 2 of 2)

“What changes are currently taking place in the ERP software market due to the rise of cloud ERP?”. In my previous blog post, I discussed some key findings from my research on this question. In this blog, I share additional insights, based on a survey of nearly 200 decision-makers in the manufacturing and wholesale industries, desk research, and 30 in-depth interviews.

Cloud pros and cons accelerating the move to Cloud

In the responses to my first blog, it became clear that “there are still obstacles on the road to public cloud ERP,” but also that “ultimately, most ERP users will transition to public cloud ERP.”

The research shows that the use of public cloud ERP is still limited. This is mainly due to concerns from decision-makers in companies already using ERP. Private cloud is often seen as a better option; it offers the benefits of outsourcing with fewer risks than public cloud. The difference between private and public cloud yields some interesting insights.

The main concerns of decision-makers revolve around security, integration, and customization. Security is viewed as a risk because public cloud ERP relies on an external party for IT management. While outsourcing offers convenience, it also creates dependency on a third party for security, reliability, and performance. Additionally, sharing the IT environment with other companies in public cloud ERP raises questions about security and integration. Customization is also a concern due to limited options and frequent automatic updates that can disrupt custom solutions.

The importance of objectivity

An important question remains: “Are these concerns justified, and will public cloud ultimately be preferred over private cloud and on-premise?” Cloud ERP indeed offers many benefits, such as accessibility on various devices, flexible scaling, fast implementations, and a pay-per-user-per-month model. The research shows that as public cloud ERP advances in functionality and technology, adoption will increase. Whether on-premise, private cloud, or public cloud is best depends on the specific situation of the company and the provider. Company characteristics are often decisive, and the research indicates that some concerns are not always well-founded.

Would you like to know more about the future expectations of almost 200 decision makers and Cloud experts regarding Cloud ERP? Download Research Summary Cloud ERP 2016 for free and find out.

Author and Researcher Ruben van der Drift, Cadran Consultancy