Paula Yarwood looks at how cloud ERP has evolved
Modern ERP is in high demand. As manufacturers grapple with rising complexity, regulatory pressures and volatility across both costs and demand, they’re turning to digital to help. Testament to this demand is that ERP spending has increased by eight percent since 2022 and is set to hit $147.7 billion by the end of this year.
Striving for agility and intelligence
While they contain the functionality necessary to support the financials and production demands of manufacturing, outdated, heavily modified legacy ERP systems are no longer fit for purpose. They can impede progression, as well as harboring increasing levels of risk the longer they’re in situ.
Not only are they manually intensive, which increases the potential for errors and inaccuracies, they also take up resources that could otherwise be spent on value-add activities. They simply can’t pivot and flex to adapt to the need of modern environments.
As such manufacturers are looking to upgrade or migrate to modern cloud-based ERP capabilities in their quest to drive greater agility, intelligence and scale. In fact, Gartner forecasts that spending on public cloud will hit $723 billion this year.
But is cloud always the answer?
A yes for cloud
The short answer is yes. Running ERP on premise typically falls short of delivering on the security, scale and performance benefits synonymous with cloud. The question our prospects and customers frequently ask us now, is which cloud is right for their need, risk, ambitions and mindset.
Multi-tenant cloud
Many manufacturers are opting for a cloud-native, or multi-tenant cloud model. This means that a single instance of the software runs on a server that serves multiple cloud customers (tenants). It typically means configuration is limited, making way for a standardized way of working. This in turn allows regular updates to the software to be released and signifies the end of lengthy, painful upgrades and migrations to the latest version.
Because multi-tenant cloud models run on some of the largest and cloud providers such as Amazon Web Services (AWS), security and performance standards are world-class. Manufacturers can therefore be reassured that their systems are not only technologically advanced, but that risk is managed effectively, and robustness and resilience are covered.
This convergence of advanced technologies and intelligence within a true multi-tenant cloud environment means seamless updates, scale and agility. As well as truly future proofing ERP investment, this model ensures users are always on the latest version.
Modern, composable infrastructure and APIs which afford the ability to easily integrate with third party systems, cements this scalability, driving visibility and collaboration to support long term planning.
Private and hybrid cloud
While a multi-tenant model is right for many businesses, misconceptions around the risk and security aspects of cloud prevail in certain sectors. Concerns around
data privacy, where data resides and increasing regulatory requirements are driving greater scrutiny of the specific types of cloud model. As a result, private clouds and hybrid models are gaining ground.
The best modern ERP platforms are typically built upon a unique, flexible architecture which provides a cost-effective and efficient way to adapt the solution to fit the nuances and parameters of manufacturers’ specific operational models. The flexibility which comes with this kind of composable architecture means that other cloud options can be explored.
Typically, in those instances, a partner or regional data center hosts the platform on a software-as-s-service basis, or private on-premise cloud.
Flexibility and scale
There’s no doubt that cloud has arrived. But whether a fully multi-tenant cloud environment, or on a hybrid or private cloud basis is best, it’s important to understand the respective merits and shortfalls of each.
Working with a partner who has extensive experience of ERP projects as well as manufacturing environments is hugely valuable in ascertaining the right cloud. Often they can align options with the specific needs, nuances and organizational culture to recommend the right environment to support both the now and the long term.
As outlined in the Government’s Industrial Strategy 2035, manufacturing growth is imperative for the economy. And without a modern, cloud ERP, supported by the right partner to facilitate new technologies and scale for the future, manufacturers risk falling behind their competitors.
Cloud therefore represents the only truly real scalable future proof platform from which to embrace a more intelligent and agile way of working, capitalize on new technologies and embrace future opportunities.
Paula Yarwood
Paula Yarwood works at Inforlogic. Bringing together world-class software with years of experience and expertise, Inforlogic delivers practical, manufacturing-centric ERP capabilities tailored to meet the specific needs of manufacturers, no matter how complex. It helps businesses work better, faster and smarter through combining Infor’s CloudSuite Industrial platform with a decade of customer success to help simplify and automate complex business processes.