Cloud ERP adoption is faster than expected
There has been a lot of speculation on whether cloud ERP would potentially replace aging core ERP systems that are out of support or running on an old technology platforms. According to Palladium Business Solutions managing director Stephen Corrigan, Cloud ERP is accelerating faster than analyst predictions.
Gartner also predicts that on-premises ERP systems will soon get the 'legacy' label. It says the highly customised ERP systems are looking a bit long in the tooth, to the point where by 2016 it will be common practice to refer to them as 'legacy' software.
"As Cloud Computing adoption in the ERP arena increases, the technical edges early adopters achieved narrow a bit, while the disadvantages typical of new technology (down time, reliable infrastructure) also stabilise. This got us thinking about how technical innovations have changed the definition of 'Business as Usual' over the years. As new technology disrupts the status quo, the once cutting-edge tools, processes, and business models get retired," says Corrigan.
Traditional monolithic all-in-one ERP systems proved to be a lucrative environment for ERP vendors as well as for the specialised consultants who implemented and managed these complex systems. They also secured themselves lucrative continuous service contracts that went beyond implementation into extensive customisations.
He says these ERP implementations are now incredibly slow and expensive to change. "Cloud ERP is an approach to ERP that makes use of cloud computing platforms and services to provide a business with more flexible business process transformation."
"Cloud-based ERP benefits customers by providing application scalability and reduced hardware costs. In addition, Cloud computing technology made it easier for vendors like Acumatica to deliver their ERP through a software as a service (SaaS) model, almost on a pay-as-you-go basis, for customers who want to acquire cloud ERP and not have to manage hardware, software, and upgrades while reducing up-front expenses," he explains.
Customers can build an internal cloud to reduce ongoing hardware costs while maintaining greater control over integration and require local access to their data server.
"When ERP was in its heyday, CEOs and business executives wanted reliable and integrated solutions, so they seized upon ERP as the way to provide this. Business stakeholders still want these same qualities, but now they assume that these qualities will be present in any software solution, and their requirements have switched to the twin concerns of lowering IT costs and seeking increased flexibility," says Gartner's Andy Kyte.
He says so many business executives have expressed real concern about the lack of flexibility in their business applications portfolio. "Gartner now defines legacy as any system that is not sufficiently flexible to meet changing business needs. A system that is not sufficiently flexible to meet changing business demands is an anchor, not a sail, holding the business back, not driving it forward."
"A way to compare legacy and current ERP systems is in the old Lotus 123 WYZIWIG (What You See Is What You Get) command versus business at the speed of thought and software adaptable enough to enhance the business process and not to suppress it," says Corrigan.
Cloud ERP software and cloud accounting software is designed to address the inflexibility of existing ERP solutions by allowing businesses to choose the deployment option that fits their specific needs.
He says it's all about helping you play to your strengths and more importantly, empowering your people to help unlock your business potential. "More importantly however is that Cloud ERP is a flexible and cost-effective option for small and medium-sized businesses and offers extensive benefits for growth and expansion."
"Since we started selling Acumatica, what has surprised us most is the varying industries and communities that have completely shifted their way of thinking about the product and their business. It is not uncommon for a company to enquire about purchasing a 3-user licence for Palladium Enterprise and ending up purchasing Acumatica and rolling out an additional 47 users in the organisation."
"We realised a long time ago that accounting software vendors could no longer dictate to business how to run their processes. When we acquired Palladium about five years ago, the first thing we did was promote customer feature requests and it has paid dividends in assisting us to get the product where it is today. We just put this down to having extremely intelligent clients as we could never do this on our own," he concludes.