New investments in cloud-based enterprise resource planning (ERP) solutions are surpassing those of traditional ERP.
So said Laurent Dedenis, president of international operations at Acumatica, speaking at an event introducing the Acumatica Cloud ERP solution to the Southern African market in Kempton Park last week.
He noted PricewaterhouseCoopers (PwC) predicts the growth of SaaS will more than double to $78 billion by 2016, while investment in traditional ERP will decline by over 30% to less than $15 billion.
PwC points out new enterprise-grade applications are fast replacing old ERP systems as companies move to become more flexible and mobile.
Research and Markets notes the global ERP software market is expected to reach $41.69 billion by 2020, registering a CAGR of 7.2% during 2014-2020. The research firm believes the emergence of cloud technology in the market would lead to a paradigm shift in the deployment methods from on-premises to cloud-enabled ERP.
Cloud ERP software considerably reduces the investments required in alternative IT resources and offers greater flexibility, says Research and Markets, adding enterprises are shifting from on-premises to cloud ERP.
According to Dedenis, cloud ERP brings benefits to organisations as it provides application scalability and reduces hardware costs.
"We live in a world where information is not a secret but a valuable asset, the challenge most organisations have is the ability to use the information as a competitive advantage."
Organisations have to realise cloud is now mainstream and choosing a non-cloud-based ERP solution is tantamount to failure and stops the business from being innovative, said Dedenis.
He believes the number one benefit of the cloud is its ability to connect a business with its customers, partners, employees and vendors. True cloud enables businesses to involve everyone, anywhere and on any device (tablet, smartphone and PC), added Dedenis.
The Internet of things and the proliferation of devices creating huge amounts of data have made it essential for businesses to move their ERP to the cloud and make good use of the data being produced by these devices, he pointed out.
Dedenis noted most of data created is unstructured - and business cannot be sure if it's bad or good - this is where cloud ERP becomes crucial as it enables an organisation to combine data from different devices and make sense of it.
"Because of the cloud, we have information that is in one place where everyone can access it, making it easy to share applications and have access to all the necessary information."
Although it takes time for companies to change their ERP platform from traditional client server architecture to cloud, it is a "journey worth taking", he concluded.