“There is no doubt that the interest of SMEs in cloud ERP is growing, even in the last 18 months alone,” says Jonathan Gross, Vice President at ERP Specialist Pemeco Consulting, Inc. “In fact, the shift to the benefit of the Cloud is so pronounced that it is almost a tidal wave. ”
As Jonathan Gross and other experienced industry players explain, there are two dominant forces driving cloud ERP services. First, software buyers are becoming less reluctant to use service providers for the core applications of their business, including ERP.
“These buyers are starting to understand the return on investment (ROI), as well as the benefits of not having to administer the IT infrastructure and benefit, in terms of security, from regular corrective updates,” explains Jonathan Gross.
Then, these decision-makers realize that, from now on, the Cloud provides them with capabilities that meet the specific needs of manufacturing and distribution companies. And Jonathan Gross continued: “The functionality that was offered to them was not available just a few years ago. ”
When publishers are betting big on cloud ERP services
At the same time, ERP vendors are putting more emphasis on the cloud. “In terms of product development, we find that publishers who traditionally marketed executable software on-premise, suddenly abandon the ship and engage in an all-cloud way,” explains Jonathan Gross.
He added that SMEs now have a long list of ERP services in cloud mode.
The list includes publishers such as Oracle and SAP – formerly primarily serving large corporations, and now also smaller ones – or Infor and Sage – that have been serving the industry for years.
Another important trend is the rise in the number of cloud platforms, including Salesforce , which collaborates with a large panel of third-party vendors developing plug-in applications for manufacturing and distribution.
Expanding choice is good news for SMEs, about two-thirds of which do not use a complete ERP solution, according to Software Advice , a subsidiary of technology analyst firm Gartner.
The company recently released a report based on responses from 250 software buyers, the majority of which were from SMEs in manufacturing and distribution.
Instead of ERP solutions, around 44% of SMEs rely on a combination of disparate systems … to execute ERP processes. The report explains that this is usually a combination of QuickBooks , Excel spreadsheets, and basic project management software. Software Advice states that this approach often leads to unnecessary hassles, including duplicate data entry, a particularly time-consuming operation.
Subscription rates that make ERP more accessible
Whether small businesses are moving to this type of solution for the first time or transiting from an existing program, the report’s authors explain that subscription pricing models make it easier for them to access ERP software.
Some SMEs are moving to ERP Cloud services looking for new capabilities, including tools designed for niche manufacturing.
However, a SaaS approach does not eliminate a perennial challenge related to ERP: implementation problems.
“ERP remains the ERP,” explains Jonathan Gross. “If, thanks to the Cloud, it is no longer necessary to install servers and software, the implementation remains a vast project. Make sure the most efficient people in your organization have the time and resources to support the project. Ultimately, the success or failure of the ERP will depend on the involvement of the internal team. “