Cloud or bust: how ERP is changing

The world is going cloud crazy and it’s not difficult to see why. Where enterprise resource planning software is concerned, the old paradigms of immense cost, lengthy deployments and fiendish complexity are giving way to no capital expenditure, greater flexibility and reduced maintenance – and from that, a new competitive landscape is emerging in which there will be winners and losers.

The winners will be those vendors which have designed their systems from the ground up for the cloud; the losers, those who are stuck with solutions which were always intended for on-premise deployment.

And while most ERP vendors are scrambling to adopt a cloud strategy, those that fall into the second category have a problem, even if they are seeking to adapt to the cloud. They simply don’t have technology that lends itself to running in the cloud. If your system was designed for on-site deployment, it typically ‘expects’ a LAN or WAN to provide the bandwidth to exchange data. The internet, while improving rapidly, still suffers from constraints and perhaps obviously, the lower the bandwidth requirement, the better the application will run.

Rewriting systems designed for on-premise to operate in a cloud architecture comes at major cost (and risk) and, in some cases, may not be feasible.

Hand in glove with the move to cloud is the rise of mobility. Today, some ERP systems extend all the way to tablets and smartphones, with apps available that present data in the appropriate format for handsets. Again, those vendors with ‘traditional’ applications are faced with a problem when it comes to mobility. For cloud ERP providers, extending to the handset is relatively straightforward, as the client software is ‘light’ and the bandwidth requirement low (so it works on mobile connections – even GPRS). The same cannot be said for all ERP solutions.

The stakes are high as the ERP vendor landscape experiences probably the biggest upheaval in its history. For those which are mired in the past, there is a distinct possibility of losing market share in the face of systems which are more affordable, faster to deploy, easier to maintain, operate across platforms and devices and are more flexible to meet changing business requirements. For ERP customers, there is little reason not to consider cloud. After all, the savings in capex can be substantial – hundreds of thousands or even millions of Rands.