Cloud shaking up ERP

The ERP market is rapidly changing, and while traditional ERP suites won’t completely disappear, hybrid deployments that blend cloud apps with connected services and modular applications will start dominating the space, writes JEREMY WATERMAN.

The ERP market is changing at a rapid pace as hybrid and cloud-based architectures bring new levels of efficiency, affordability and flexibility to the enterprise applications market. Gartner goes as far as to predict that heavily customised ERP implementations will soon be

called legacy systems.

Companies that want to remain competitive have no choice but to modernise their systems so that they’re better aligned with the pace and connected nature of the digital world. In time, we can expect to see monolithic ERP suites give way to more agile deployments.

While traditional ERP suites won’t completely disappear, we’ll see hybrid deployments that blend cloud apps and connected services with modular on-premises applications start to predominate.

Here are four ways I expect to see the cloud transform the ERP landscape:

1. Cost

Enterprise applications have traditionally been expensive – not just because of licensing costs, but also because of expenses such as hardware infrastructure, integration, customisation, implementation and support.

With the cloud, you turn the cost of the application into a monthly subscription fee. The capital outlay is lower and the operating cost may be lower, too. This lowers the barriers to entry to ERP for small companies and frees up money for larger business to spend on strategic initiatives.

2. Speed to market

Today’s cloud-based solutions are usually quick and easy to configure for the needs of your business, which means that the implementation cycle can be shorter. Rather than focusing on the technical nuts-and-bolts, you can instead work on process improvements. And since you’re not building an implementation from scratch, you can start benefitting from your investment in the new technology faster.

3. Agility and scalability

One of the biggest challenges of old-fashioned, monolithic ERP systems is that they are inflexible. They often dictate your business processes: have complex integrations into your other systems, and feature extensive customisations. This makes it difficult to adapt them when the market changes – and if your business changes in size, scope or focus, you might need to rip everything out and start all over again.

But the cloud makes it relatively easy to add new users and functionality to your basic application. For example, you can add additional modules when you need a new business functionality. A good cloud platform will evolve comfortably alongside your business.

4. Mobility and connectedness

Traditional ERP systems aren’t really designed for the needs of a modern workforce, which is mobile and geographically dispersed, and often takes the form of an extended enterprise embracing partners and contractors. The cloud makes it simple to give people secure access to business systems wherever they are, with a frictionless user experience. It helps companies mobilise business processes and, in the process, becoming more efficient and responsive.

* Jeremy Waterman, Managing Director of Sage ERP Africa and Middle East.

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