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Why Businesses are Moving Their ERP to the Cloud and How It May Help in The Long Run?

Why Businesses are Moving their ERP to the Cloud and How it may Help in the Long Run?

The attitude towards ERP and cloud computing has witnessed a gradual shift in perception over the last few decades. While most of the IT managers were not so confident about using a cloud solution a few years back, they are now up and running on the new cloud based systems managing their entire organizations. Traditionally, Enterprise Resource Planning (ERP) solutions were regarded as "software crown jewels". Though they were expensive, bulky and large, they stood at the epicenter of a company's core business. Not surprisingly then, the IT guys considered the cloud as a fanciful escapade from these robust software whose main job was to ensure smooth running of the business.

However, in recent times, the focus has shifted towards cloud based ERP solutions, given their holistic approach that takes into its purview almost everything a business requires and the fact that they are easy to keep pace with the ever changing customer needs which traditional ERP solutions lack to quite some extent.

According to Ventana Research, the transition from host based midrange systems to client/server technology was one of the most significant steps taken towards ERP solutions. Legacy ERP solutions are not only expensive, but also time-consuming and cumbersome to maintain and modify from time to time. While, some vendors have made it less costly to configure in recent times, legacy ERP systems lack attention to detail which might be a pain in the neck after a period of time. Instead, the answer may be blowing in the cloud for such clients.

Reaching Out to the Cloud

Many companies are recognizing with every passing day that migrating their ERP systems to the cloud would in fact eliminate the major obstacles faced by their on-premise solutions. Cloud based ERP solutions not only cut down on the hardware costs, they  greatly reduce the operational costs as well as there is no need for an extra IT support team to periodically upgrade the system and patches manually.

Secondly, a cloud based ERP solution helps people to collaborate simultaneously on an issue on the cloud in real-time. Anything from an inventory problem to a supplier issue can now be solved with just a few clicks.

Moreover, role-based dashboards could also be created as per the user requirements and remote access to information is also available on cloud based ERP solutions which is lacking in on-premise ERP solutions.

Hybrid ERP

According to Gartner, an analyst firm in the USA, ERP deployments over the next five years would be of hybrid type, involving on-premise as well as the cloud. It would involve a cloud integrated with a smaller 'core' based on an on-premise solution. Also, Gartner expects to see a 30% migration to cloud based ERP solutions amongst service centric companies by 2018.

Whether you are pondering to implement an ERP solution for your business or to migrate your existing ERP solution to the cloud, do your homework and gauge the efficiency of the product and requirements of your business before taking the big leap.

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