ERP Special technology report
Ian Wahlers, industry strategy director
remain a lot more cautious of putting the backbone of their operations in the Cloud,” he said. “The key question they ask is ‘where will my data live if it is not on the premises?’ Manufacturers who use ERP are
traditionally a lot later on the curve and
more conservative, and so this is a huge leap for them.”
In the enterprise applications market, Dinesh concurs with Burgess in considering that the most notable first mover on the SaaS model has been CRM. “We can also see substantial HR management, benefits administration and Payroll functions being offered in a SaaS model,” he adds. “The observed commonality between these different areas is the fact that they are somehow considered 'non-core' in the applications portfolio in any enterprise, where an ERP application is considered 'core'. The tendency of the enterprises to hold the ERP processes and data closer to heart, tied with the need for data privacy, maximum availability and complete control, has always kept the demand for hosted ERP solutions low.”
Ahead of the curve In Dinesh’s view, ERP vendors, big and small, have been agile enough to get ahead of the curve and offer their ERP solutions in a SaaS model in expectation of a gold rush in the near future. “They have seen some cautious early adoption in certain industry verticals and geographies,” he said, “but are yet to see the expected deluge of enterprises rushing to adopt ERP on the cloud.” Dinesh continued: “The SMB segment is definitely sitting up and taking notice of the SaaS-based ERP option, as it presents a never-before opportunity to leapfrog decades of multi-million dollar investments made by large enterprises and yet have the same capabilities in time-to- market and automated processes.” Wahlers considers that one of the issues
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worth discussing is whether a SaaS application is multi-tenant or not. “
Salesforce.com is probably the best example where, in the CRM world, there are relatively predictable processes and where you can share multi-tenant deployment of an application, and follow relatively consistent processes while also having the means for some level of customisation,” he said. “But I believe, for ERP, many of the current Cloud models are either quite thin in terms of functionality or scalability. To deploy something in the Cloud as large and complex as an ERP system you’re likely to require a single-tenant model because you want something that’s unique to you and something that you can easily modify when required.” So,
“
[The Cloud concept] feels like a major shift in the same way as it did when the trend moved from large mainframe computers to client server, but things are definitely going in that direction.”
– Ian Wahlers, Lawson.
in terms of where the Cloud ERP model is currently, Wahlers believes it is early days. “No doubt, the attraction of lowering the Total Cost of Ownership, having the infrastructure taken care of, and paying for ERP like you do for your domestic electricity, is a nirvana,” he said, “but we’re a fair way from this perfect vision at the moment.” Wahlers explains that, for Lawson’s part, the company can offer its customers either on-premise or SaaS ERP as, say, a four-year engagement, during which time the customer might decide to go purely down the on-premise or SaaS route based on their own specific user experiences and requirements.
ERP tomorrow
In the wider context, what will the near future hold for the ERP market space? Norwood believes the market will soon start to see the emergence of smarter applications driven by industry best-practices. He points out that some of the thought leadership coming out of analyst firm Forrester discusses the emergence of what it calls ‘smarter
computing’, suggesting that ERP software will expand its capabilities along four dimensions as it becomes increasingly specialised to address complex industry-specific business processes. “One of these dimensions, ‘verticalisation to fit industry needs’, you could argue is not new,” reflected Norwood. “Granted, Epicor is already built to meet the needs of manufacturers, distributors and service firms and supports a number of key industry capabilities out of the box. Expect to hear more and see new approaches to this from vendors, including packaged best practice models for how best to implement and use ERP. These investments must continue in order to deliver even greater support for businesses' need to innovate (new product and service introduction) and improve business execution within industry.”
Starting this year, Norwood believes we will begin to see a paradigm shift in what we have come to think of as ‘user experience’ and a resulting new breed of intuitive user interfaces. “There has been much talk about rich Internet applications (RIA), or business software that adopts many of the concepts we are now familiar with on the consumer and social Web and in gaming environments,” said Norwood. “But not much has actually appeared other than a few Silverlight controls in applications from Epicor and others. Slightly more strange is that some ERP vendors have used modern RIA technology (eg. HTML 5, Silverlight and Flash) to simply recreate something akin to existing user experiences. Maybe that’s a natural step but expect to see some fairly exciting developments in this area over the next few years.”
Norwood added that Enterprise 2.0 has now started to move from over-hyped to table stakes. “We work hard to be at the forefront of Web 2.0 adoption for the enterprise,” he said, “and we have tried hard to demystify it for customers by showing the business value of such technology. However, we are not alone, and any ERP system that doesn’t accommodate the now common RFx requests for Social CRM, Enterprise Search, Data Tagging, Presence, Mashups, Activity Streams, Multi-channel Collaboration (or
March 2011
MANUFACTURING &LOGISTICS
IT 17
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