Cloud ERP Software Update

Posted by admin on October 7, 2011 under ERP Software | Be the First to Comment

Over the past year, we have seen a substantial increase in interest for Cloud based ERP software solutions with our software selection clients. While Cloud based solutions for CRM and HR/Payroll have had a lot of momentum for many years, Cloud based ERP has seen slower acceptance, particularly for the mid-market to larger enterprises. This has resulted in the majority of Cloud ERP software installations implemented in smaller companies over the past few years. That is changing now as larger companies are evaluating Cloud ERP solutions for their enterprises.

However, it is important to note that Cloud based ERP systems such as Netsuite, Intacct, and SAP Business By Design are still maturing. They have much of the base functionality now, but some of the more sophisticated requirements, especially with regard to multi-company/multi-national environments, or specific functionality required by markets such as manufacturing and projects, are still being built. Cloud vendors are ramping up their functionality quickly and every release (typically about every 6 months) brings more robust functionality. Netsuite, for example, has increased multi-company functional depth with the release of Oneworld a couple of years ago and then acquired manufacturing functionality from Rootstock. SAP’s Business by Design has built-in multi-company capability. Workday has followed the PeopleSoft model and released a high-end financial solution after focusing exclusively on the HR/Payroll market for the past few years. Still, these systems do not have all of the advanced functionality or breadth of capabilities right now if you compare them with on-premises software solutions.

From the other side, the traditional on-premises software vendors like Microsoft, Oracle, Sage, and Infor, have mature functionality but are working to modify their technology to offer a Cloud solution. As a step in that direction, the traditional ERP vendors offer a “hosted” model that allows customers to outsource their servers and maintenance to a 3rd Party. But for most of these vendors there is still a lot of work to do to get to a pure multi-tenant Cloud solution. This development is definitely underway as evidenced by the new pricing model and enhancements built into Microsoft Dynamics AX 2012 that clearly point to a future Cloud solution.

The bottom line is that for right now if you are considering a Cloud ERP software solution, you have to make some choices. You can get the technology of a pure cloud solution that may lack some functionality (depending on your requirements), or you can have a more functionally robust software solution that has not quite moved their technology to the Cloud. In either case, over the next few years, these two sides will move to their respective goals and you will see a wide variety of fully functional Cloud technology ERP solutions on the market.