A recent blog post from the enterprise app pros at Panaya addressed how realistic cloud ERP solutions are and how likely businesses are to move their ERP apps to the cloud.
First, it’s important to recognize how complicated enterprise resource planning (ERP) is. We’re not just talking about a single app. ERP typically involves a whole suite of cross-department, integrated applications related to product planning, manufacturing, human resource management, accounting, delivery, customer service, marketing and sales.
In the past, ERP apps resided primarily on legacy in-house systems, but now, of course, there’s a push to move everything to the cloud.
To Cloud or Not To Cloud
Panaya marketing manager Avi Hein recently wrote about the dilemmas IT managers face with moving ERP to the cloud. He shared some interesting findings from a Panaya survey of several hundred IT professionals about their cloud-readiness.
The survey asked IT pros when they think ERP will move fully to the cloud. An ambitious 30% of respondents anticipate their ERP systems will move to the cloud in 2016, while another 30% said “in a few years.” That’s 60% total with concrete plans for the near future. Another 24% predicted 2025, while 16% said virtually never.
Interestingly, 57% foresee their ERP systems moving to a hybrid cloud environment, using a mix of on-premise, private cloud technology working in conjunction with outside, public cloud services. 28% see ERP going completely to an outside cloud service, while 15% say ERP will always remain on-premise.
Risky Business
When asked if they trust the major ERP vendors to maintain systems in the cloud, 59% of respondents said, “Yes, but it won’t be without issues.”
Another 23% said they trust ERP vendors more than their own IT staff to maintain systems in the cloud, while 18% said they don’t trust anyone on the outside to maintain their ERP.
These findings likely reflect the newness of cloud technology and the mission-critical nature of ERP systems that can’t — or at least shouldn’t — ever go down without notice.
Measurable ROI
Regarding return on investment, 45% of respondents agreed that moving ERP to the cloud should provide measurable ROI in terms of agility and cost savings. 28% said they don’t yet know how to calculate ROI in the cloud properly, while 17% said that ROI or the ability to measure ROI in the cloud is a fantasy.
One final, interesting point from the survey: When asked which ERP vendor will reach the cloud first, SAP or Oracle, it was a dead heat.
