There are a number of heavy hitters in the ERP (Enterprise Resource Planing) vendor world in 2015. Not to name any one in particular, but the top 3 or 4 ERP giants have stayed at roughly the same spot for a number of years (with one notable change recently). These legacy ERP vendors have relied on innovation combined with tried and tested methods to bring efficiency, lower costs, and increased ROI to many enterprise industries.
However, as the rest of the world has begun shifting to the Cloud in almost all areas of business and commerce, some big name ERP vendors are struggling to play catch up. One such organization has gone so far as to do a complete 180 and rebrand their entire business model around the Cloud. Is this the best choice, or a desperate grab for relevance?
ERP and the Future of Cloud
Some of the big name ERP vendors have spoken unfavorably of Cloud based services and products in the past. The reasons given are numerous; from security concerns to lower functionality, there are legitimate concerns for some businesses over switching to the Cloud for the business software needs. With that being said, there are also many benefits to Cloud based enterprise software, such as lower costs due to less implementation and forward-compatibility. Choosing between an on-premise ERP and a Cloud based ERP truly comes down to your specific situation and needs.
Yet some big ERP companies seem to be panicking. One such vendor has gone from denying the threat of Cloud products as a “fad” to completely redesigning their entire business plan to incorporate the Cloud into every single product and service. The idea is that in the future, “everyone” will be using the Cloud and therefore they want to base their business model around that. Unfortunately, this could backfire for such large companies; the amount of effort it takes to convert a legacy of on-premise products into Cloud based services is huge, and the costs associated with retooling old products to match Cloud frameworks is going to keep rising the more they try to keep up.
Banking on Buzz: Cloud, Cloud Cloud
The problem with trying to play catch up and capitalizing solely on current fads or trends is that it is fairly apparent to your target demographic that you aren’t concentrating on a focused strategy. If you have said for years that Cloud is useless and the suddenly switch to doing nothing but Cloud, it seems disingenuous or even deceitful.
With that being said, investing in Cloud adoption is still a good idea. With competitive prices and a low barrier for entry for most organizations, switching your enterprise operations to a Cloud based system seems like a smart move – one which ERP vendors wish to accommodate as much as they can. The key is not to put all your eggs in one basket, especially if the basket is new and unlike any you’ve used before. If you’re a vendor who has only recently started adopting Cloud technology, then the initial revenue growth is going to look good on paper but ultimately not be that big of a factor – so you shouldn’t ignore the trusted technology that got you into the big leagues in the first place.
ERP and the Cloud: The Future is Coming
When all is said and done, Cloud is probably here to stay. In the next few years, more and more enterprise organizations will either be using a Cloud service/software or something similar. The key thing is to know that the way we develop, implement, and utilize applications in the future is going to be vastly different to how we’ve done things in the past. This is exemplified by the digitization of most companies important data.
What is most important, however, is having a well thought out plan for transitioning to these new methods and technologies. By creating a plan and modeling your business around a slow transition, you not only set yourself up for more structured success but you bring your old clients along with you. Instead of suddenly abandoning ship and being a completely different company than the one that got you to where you are, you can instill confidence in your audience that you are simply adapting to customer needs – instead of jumping on the bandwagon just because it seemed like the right thing to do.