Demystifying the (ERP) cloud
Enterprise resource planning in the digital landscape (within the focus of the cloud) should be viewed as a more intelligent way of managing a business.
Thanks to the recent arrival of multinational data centres in the country, the cloud has become a business priority. It is an essential tool in how a company remains competitive in a continually changing digital environment. Within this context, enterprise resource planning (ERP) solutions have a critical role to play.
And this is reflected in the momentum of the cloud worldwide.
Gartner estimated the global public cloud services market will grow 17.3% this year to $206.2 billion, up from the $175.8 billion in 2018. But this does not mean the cloud is a silver bullet that can solve all organisational challenges. There must still be a fundamental strategic value in making the transition, whether it is through ERP solutions or simply accessing documents collaboratively.
In South Africa, with its growing small to medium enterprise (SME) market, ERP has become something of an anathema. Thanks to how it has been positioned in the past, ERP is viewed as expensive, cumbersome and inflexible solutions that integrate different business components. And while there is some truth to this, the modern ERP environment is quite a different one, especially for the small business sector.
Part of this can be attributed to the success of the cloud when it comes to delivering more secure solutions more cost-effectively using more computational power than what a business can afford to have on site.
Even so, SMEs do not care about the cloud or even ERP as a concept. They just want to get business value as cost-effectively as possible with the minimum amount of disruption to existing operations.
A cloud-driven ERP environment provides a more secure way of benefitting from a digital approach to business.
If anything, ERP in the digital landscape (within the focus of the cloud) should be viewed as a more intelligent way of managing a business. Irrespective of whether a company is using public, private, or hybrid cloud services, ERP must be able to integrate data and deliver on business expectations with an all-in-one solution that transcends IT knowledge.
ERP is vital in the modern environment driven by data. Consider some of these statistics. By 2020, every person will generate approximately 1.7MB of data per second. Also, by that year, the accumulated volume of big data will increase from the current 4.4 zettabytes to approximately 44 zettabytes (equal to 44 trillion GB). Google now processes more than 40 000 search queries per second. According to InternetLiveStats.com, when Google was founded in 1998, it was serving 10 000 search queries per day.
Furthermore, the much-touted cost benefits of going the cloud route is not something to ignore. With corporate budgets under pressure, everything from human resources to IT spend need to be managed. And with cloud providers offering all these services in a hosted environment, companies can focus less on spending resources on hardware and software upgrades, and more on delivering strategic objectives.
Another significant advantage of going the cloud route, is its ability to scale up or down according to the needs of the business. Instead of purchasing additional servers or expanding an on-site data warehouse, the cloud provider has the required functionality to add capacity.
An ERP world
By migrating ERP systems to a cloud environment, organisations can free up internal IT resources. In turn, these employees can focus more on delivering strategic value instead of performing ongoing maintenance and support. The IT staff can therefore ensure all the systems are aligned to delivering on the growth objectives of the organisation.
Another advantage with ERP in the cloud is that the solutions always stay up to date with the latest technological innovations. No more running continual updates on-premises or being stuck doing patch management on an almost weekly basis. Updates in the cloud happen with minimal disruption. Some service providers even offer sandbox functionality for customers to test out significant new features before they are rolled out.
However, one of the most critical benefits to doing ERP in the cloud is the ability to embrace mobile access. Given the growth of mobility in South Africa and the rest of the continent, linking mission-critical data to professionals in the field in real-time ensures business value is delivered as close to the source as possible. No longer do employees have to get back to the office to access databases and upload customer (and other) data. All relevant information is accessible from the convenience of a smartphone or tablet.
A cloud-driven ERP environment provides a more secure way of benefitting from a digital approach to business. Given the complexities of regulatory compliance, it is all about keeping data safe, available and online using dedicated resources tailored to the specific needs of the business, irrespective of its size or industry sector.
Those organisations willing to embrace it sooner rather than later will be the ones to gain significant competitive advantage in the months and years to come.
Dr Danéel van Eck is software architect at Epicor, with a BSc Computer Science, MBA Strategic Management and PhD in Business.
He has 29 years of experience designing, developing and implementing software solutions, and 21 years of experience in designing and building ERP solutions.
At age 13, Van Eck wrote his first commercial software application that was distributed on thousands of PCs, and by 16, the software products he had developed for technical configuration of telecommunication systems had gone fully commercial. This progressed and he built a business on custom software development.
Van Eck has provided consulting input to many companies on their IT and business strategy, and has built and sold multiple companies. His research for his PhD concerns the conditions under which intuitive decisions can be effective, and focuses on how complexity affects this.
He is also a qualified commercial helicopter pilot and instructor, and in his spare time teaches new pilots to fly.