Taking the pulse of the cloud-based ERP market
ERPs power businesses, and in our world of remote workers, the cloud is the most flexible, scalable, and cost-effective way to deliver solutions for success.
The cloud makes remote working more productive and accessible, and that's precisely what businesses of tomorrow will need to survive.
Moving to cloud ERP is inevitable. The only question you should be asking is when.
When should I move to the cloud?
The widespread shift to cloud-based applications, remote working, and a growing recognition of cloud-based ERP benefits is already happening. With many organizations already migrating back-office applications to the cloud, this trend is set to accelerate over the next few years.
Interestingly, the global pandemic has only made this a greater priority and pushed timescales forward. So, ignore the advantages of SaaS approaches to ERP at your peril, as it becomes the norm.
So how and where should organizations be working? To get a bigger picture of what's happening to the way, where, and how we work, we partnered with Computing Research to survey 150 European IT decision-makers. Here's what we found:
Remote working and the cloud
Remote working is now very much the norm in many industries. Of our participants:
- 75% had a majority of their employees working remotely.
- 84% said that remote working had increased in their businesses to a considerable extent because of the pandemic.
- Overall, the majority agreed remote working would accelerate their move to the cloud.
And very few expected working lives to return to the pre-COVID norm. A trend very much echoed by mainstream media discussions on the subject.
Also, most respondents believed that cloud ERP enables greater remote working. Because accessing on-premises ERP via VPNs negatively impacts productivity and confines people to their homes when accessing their ERPs. As remote workers begin to move around more and need to access ERP applications via the internet, this will become a larger problem for these solutions.
To understand the importance of remote working, we must look at the benefits cloud ERPs offer businesses, not just their people. Along with improved productivity and scalability, many are also benefiting from reduced capital and operating costs.
- 84% increase in remote working since pandemic.
- 78% accelerating shift to cloud ERP.
- 75% with 51 and 100% of their people working remotely.
- 74% agreed that cloud-based ERP enabled greater remote working.
The Big picture:
- Make remote working easier
- Improve productivity and scalability
- Reduce operating costs.
ERP and the Cloud
The most significant barrier to widespread cloud ERP was the combination of bespoke legacy ERP and their subsequent fragility. Many businesses believe the costs and risks of rearchitecting these mission-critical applications are too high. This leads them to use solutions long past their sell-by dates.
These metaphorical sell-by dates matter because the costs of keeping up with newer product versions quickly become more and more expensive. Organizations are always balancing the costs and risks, but migration will become significantly less than the costs and risks of maintaining old applications after these 'sell-by' dates. The transition to cloud ERP is inevitable. The only difference will be timescales.
This is reflected in views about how cloud computing is likely to change over the next two years:
- 84% of businesses will increase their use of cloud
This was happening before the pandemic, but our research has shown the pandemic has brought forward cloud migration plans for most enterprises.
- More than half of businesses are moving data and applications to the cloud because of the pandemic.
They were also much more likely to be planning a cloud ERP migration, with 80% increasing their cloud services using cloud ERP.
The full effects of COVID-19 on our socioeconomic fabric will take years to understand. But the businesses that survive will be the ones who focused on agility and scalability.
The big picture:
- Currently, ERP applications are most often delivered via on-premises or hosted infrastructure.
- HR applications were most likely to be delivered via the cloud, 64%.
- Web-facing applications, CRM, collaboration tools, and databases were most likely to be situated in some sort of public cloud.
- Moving to cloud ERP delivers considerable cost reductions, boosts agility, and improves performance and productivity.
- The biggest barriers to cloud ERP are bespoke and complex traditional ERPs and security concerns.
- Cloud ERP implementations will lead to cloud services growth over the next 2 years.
- 56% Increase in cloud-based applications/workloads implementations due to pandemic.
- 45% increase in the use of cloud ERPs due to pandemic.
Our exclusive research on cloud ERP has established that, at present, a minority of enterprises are delivering ERP applications via SaaS or other public cloud services. Web-facing applications, CRM, collaboration tools, and databases were most likely to be situated in some sort of public cloud.