ERP being a management software it helps an organization to integrate different applications with the aim to manage the business and to automate various functions. Despite its various advantages, earlier there were several challenges associated with the ERP implementation like scalability issues, integration, flexibility, budget constraints etc. for which companies must have to find the solutions real quick, considering the potential and future of ERP. Though ERP trends are still evolving and in an emerging phase, just like cloud technology.
In this era of cloud, to overcome those problems of ERP, companies have started resorting to Cloud ERP technology in their businesses. Cloud ERP is nothing but integrating cloud technology with ERP solution, it can help in streamlining the mechanisms by dealing with the inbuilt rigidities in existing ERP software thereby empowering businesses to decide on the options which are most suitable.
Cloud Computing is not just a buzzword or any random hype in the IT domain anymore, the industry has very well realized the importance and potential of cloud technology. Cloud is making “use of the internet” for storing, saving, managing your confidential data. You can go for Public, Private or Hybrid Cloud, as per your requirement and budget. The integration of cloud computing and ERP can indeed do miracles. ERP Solution is expected to generate a revenue of around 47 billion during the forecast period of 2017–2022. If we talk about the CAGR, then the pace is near about 7%.
As the cloud is on the verge of becoming a trillion dollar industry soon and by 2020, more than 80% of companies will be on the cloud for their data needs. The global cloud IT market revenue will be aspiring to move up from $180B in 2015 to $390B in 2020, with a staggering CAGR of 17%. So is the case with ERP implementation, around 60% of the companies have already started with either planning, acquiring or upgrading their ERP solutions. As per IDC, The expenditure on Cloud computing is expected to grow more than 6x the rate of IT spending by 2020.
ERP affects the entire organization and acts as an umbrella, but mainly it is related to the below-mentioned core components in which cloud technology can go great.
- Human Resources: Cloud HR has facilitated the HR industry by doing centralization of information i.e. storage, maintenance, and retrieval of data of candidates, whenever required.
Almost 72.8% of employers struggle to find the right candidates for their companies.
- Customer and Supplier Relationship Management: Customer and Supplier related data can be stored on the cloud and delivered to the end user via the internet. Scalability and flexibility are crucial advantages here provided by the cloud.
Global cloud service revenue from CRM has increased from 3.39 to 8.96 U.S. billion dollars from 2010 to 2016.
- Business Intelligence: Cloud BI provides easy access to BI-related data like dashboards, Key Performance Indicators, and other business analytics to the organizations.
Financial services, higher education, business services, and retail are holding huge importance on cloud BI today.
- Supply Chain Management (SCM): Cloud SCM provides agility and streamlines the operations of SCM in the organization.
In 2016, the cloud SCM market size was at $3.3 billion, which will grow with a CAGR of 19.2% by 2023.
- Inventory Management: In the context of inventory, when and how much inventory to procure, coordination in terms of being utilized and buffer stock, really requires real-time data management practices, cloud helps IM in that.
On an average, inventory is accurate only 63% of the time, which is a serious issue and requires an agile technology like the cloud.
- Financial Management: Financial transactions require safety, security and also the database is huge, which is a point of consideration. The goals of Cloud FM are to provide cost transparency, cost accountancy, cost empowerment, and cost management.
Around 74% of Tech CFOs believe that cloud computing technology will have a significant impact on their businesses.
Let’s jump quickly to the benefits of cloud ERP:
- Entry is a lot more feasible and easier:
In the case of cloud computing, there are no entry barriers. You can consult a cloud computing solution provider to get a suitable solution for your business need, as there are various vendors for the same like AWS, Azure, GCP etc. These three will capture around 80% of the market in terms of revenue by 2020. They charge a respective subscription fee for their different services, you just need to find the best solution that suits your need and you just have to pay till the time you are having a presence over the cloud.
As per Deloitte, with the start of 2019, IT-as-a-Service for data centers, software and services will achieve $547B figure.
ERP is complicated and full of complexities indeed. It can be very well related to the SaaS model of Cloud computing. SaaS is software as a service which is related to software availability. As compared to have a core on-premise system, it is better to take the services of the vendor company for hosting the software that you will be requiring.
According to KPMG, 49% of businesses are using cloud technology to drive cost efficiencies, while 42% are using it for more enabled mobile workforce and flexibility.
- Scalability will not pose any threat:
Scalability is the convenience and ease, where you can anytime scale up or scale down your transactions in terms of data. A small company can scale up the data-oriented transactions anytime, whenever it wants to expand, whereas a large company can downsize its transactions in case of crises or urgencies.
There will be no underutilization of resources in any way. Hence, there will be optimal usage and savings in terms of time, cost, efforts, and resources.
According to KPMG, Businesses had substantially improved their performance with successful cloud implementation, while 70% encountered cost reduction in their working.
In ERP, as the infrastructure is managed and taken care of by the vendor company, there will be no need to install physical servers, hardware or components for creating IaaS. Just by paying more, you can avail a wide range of services. Cloud can effectively help in providing the Infrastructure as a Service to organizations.
Cloud computing can enable better flexibility by 37% and reduce the support burden on IT staff by 36%. Wikibon has predicted that enterprise cloud spending is growing at a 16% CAGR from 2016 through 2026.
In the context of ERP, around 51 % of firms are already using advanced cloud services related to Financial and Accounting Software Applications, Customer Relationship Management (CRM) to run their business applications.
- Mobility and Accessibility:
There will be no geographical barriers when companies are using cloud technology for their ERP needs. The data is anytime and anywhere available on the snap of fingers, just a decent internet connection is required as a prerequisite.
If companies are having an on-premise ERP system, then they have to install multiple devices for the same. And if its a global company or MNC, cloud solutions are boon indeed. Employees can access the Cloud ERP software from any place, they can easily do work from home, they can use it while commuting etc without any hassles or barriers. Cloud technology can also withstand downtimes.
60% of enterprises have accepted that at least half of their infrastructure will be on the cloud-based platforms by early 2019, considering the factors like mobility and accessibility.
- Security concerns will not be a challenge anymore:
Earlier it was believed that the on-premise ERP system is preferable over any other alternative because companies had a notion that it is more secure as they have more control over it.
But now, the scenario is changing, it is now believed that data is more secured over cloud against malicious uses, hacking, system breakdowns and so on. And ERP works on the huge database for integrating different functions altogether, so assurance of safety is utmost required.
Companies like AWS, Microsoft Azure, Google cloud platform are incurring heavily on cloud infrastructure for the purpose of security. The vendors of Cloud are spending almost millions of dollar to safeguard the cloud data of their clients through passwords, firewalls, several encoded encryptions, multiple layers of authentication and so on. Earlier, the data was considered to be “safe” in-house, but now it has been considered “safer” on the cloud.
As per Gartner, By 2022 at least 95% of Cloud Security failures will be the result of the customer’s fault and mistakes, and not because of cloud vendors or cloud itself.
As per Goldman Sachs’s report, there is a 30% CAGR rise in the expenditure on a cloud computing infrastructure and platforms from the year 2013 to 2018.
You can consult Zymr Inc. for your Cloud Computing Solutions. We have a rich domain experience of around 6 years. It has also been recognized as Top Cloud Computing solution provider by Clutch. Zymr’s team is highly skilled and is having substantial expertise in all cloud-related concerns and issues. You can also get detailed information through Zymr’s integrated Cloud and Mobility Solutions. We are here to support you with your each and every cloud-related concern, so consult Zymr Inc. today and get the best cloud solution as per suitability to your organization.