Manufacturers’ cloud resistance is weakening

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16 March 2016 | 0

Manufacturers are slowly warming up to the idea of putting portions of their complex enterprise resource planning (ERP) systems in the cloud, according a report by Technology Evaluation Centres (TEC).

Although most manufacturers do not see cloud-based ERP as currently viable, they are “keeping an eye on the market for potential future use” in certain circumstances, says TEC research analyst Aleksey Osintsev. For example, one promising option is a hybrid approach of combining traditional ERP software with cloud-based ERP for non-mission-critical or non-transactional applications. Another option is a private cloud for ERP to keep company data inside the firewall.

The TEC report, “Cloud ERP Buyer’s Guide for Manufacturing,” addresses the typical questions manufacturers have about cloud-based systems and provides a framework for evaluating them.

Manufacturers typically will not rip out an on-premises ERP system just to switch to the cloud. But the report notes that there are business scenarios where cloud-based ERP could make sense.

The report finds that global companies with facilities scattered across countries and regions may want a two-tier ERP strategy.

“Local ERP systems combined with a global cloud-based ERP allows for easier information gathering from distant facilities and global data consolidation and analysis,” says the report.

Another case is where smaller organisations that cannot afford a traditional on-premises ERP but have complex business processes.

Also, companies with a “lean” philosophy that would “prefer not to deal with the complexity of an IT infrastructure” while they stay focused on business priorities would be disposed towards using ERP in the cloud.

The report says that new manufacturing businesses that start operating from scratch would be well placed for such services, as well as manufacturing companies with a heavy emphasis on mobile access for remote users, or a reliance on social media channels.

 

 

IDG News Service

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