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On-premise ERP facing cloud challenge

Traditional ERP systems face becoming 'legacy' systems fairly soon as users head for cloud based alternatives

A few years ago ERP and CRM were all the rage but then things started to go wrong with big ticket IT projects failing to deliver the results that the customers expected.
For a while it all went quiet and it became easier to talk about business intelligence and analytics rather than to refer to a specific product category.

CRM seemed to have a slightly easier recovery and has become a topic that customers are happy to talk about again, particularly with the move by a lot of vendors to put the tools into the cloud and provide more flexibility than was previously available from the old systems.

When it comes to ERP the recovery in its visibility seems to have taken a bit longer. Given that the technology tended to be expensive and the promises were more wide sweeping it might have taken more time for the disappointment of failed installations to pass.

But pass it has done because IDC is indicating that the ERP market across Western Europe is growing, with cloud and mobile helping push along an increase over the next four years with it delivering a 5.4% increase to a value of $14.5bn in the next year.

Those numbers come from IDC, which is also charting how some of the traditional players, including SAP and Oracle, are now coming up against stiffer competition from some of the born-in-the-cloud companies.

According to the analyst house the challenges of greater consumerisation, the advent of 3rd platform technologies and the desire to make sure that IT investments actually deliver are all things that ERP vendors are having to wrestle with.

Gartner research from 2013 also looked at what was happening with ERP and concluded that on-site systems could be relegated to legacy status as early as next year as users turned to cloud-based systems.

Back in 2013 the analyst house was already warning customers to make provisions to deal with their ERP systems to avoid them becoming a legacy headache.

Laura Bee, marketing specialist at NoBlue, said that one of the biggest challenges with older systems was the lack of flexibility they offered.

"Flexibility is also hindered by access. Unlike cloud-based ERP solutions, on-premise systems can only be accessed on site. Human behaviour is changing with improved technology; we can no longer wait for answers and demand instant information at our fingertips. This is why many business leaders are finding their on-site ERP systems are no longer up for the job," she said.

“The cloud was purposefully designed for easy interoperability, which adds the option for current or future usage of additional products. There are not likely to be interoperability worries if changes need to be implemented to hardware or software. More importantly, cloud ERP systems are completely scalable and can grow with the business,” she added.

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