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The Future of ERP in the Cloud

When companies consider moving their processes to the cloud, they typically start with applications that aren’t considered critical to the business. That way they can be sure everything is working properly before migrating more essential apps.

Because ERP applications are some of the most mission critical, enterprises have often wondered whether they should trust them to the cloud.

However, the future of ERP is currently looking up – to the cloud. To save money and become more agile, enterprises are now moving their ERP systems to the cloud. Cloud-based ERP enables organizations to take advantage of a technology that in the past has been too expensive.

The cloud ERP market size is estimated to grow from $18.52 billion in 2016 to $29.84 billion by 2021, according to a recent report from MarketsandMarkets.

Cloud ERP helps companies streamline their business processes, increase efficiency and productivity, achieve more user-centric communication and avoid redundancy, the report notes.

Large enterprises are turning to the cloud because they understand the need for highly agile environments that can be accessed from anywhere. And organizations running legacy on-premise ERP systems realize they have to migrate to an ERP system that meets the needs of today’s modern digital business.

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Additionally, increasing demand from small and medium enterprises (SMEs) in various industries and regions is expected to drive the market growth during the forecast period, according to the report.

In the past, SMEs typically did not deploy full ERP systems because they were too costly and difficult to implement. As a result, small to midsize organizations had to rely on inefficient ledger apps, spreadsheets and manual reporting.

Because cloud-based ERP makes it easier to deploy, support and maintain the technology, SMEs, as well as large enterprises, can now benefit from it.

The main forces driving the cloud ERP market include an increasing need for operational efficiency; increasing awareness and adoption across SMEs and large enterprises in a variety of industries; as well as the implementation of cloud infrastructure and enterprise mobile applications, according to MarketandMarkets.

Deploying ERP in the cloud lets employees access information in real-time from any location and on any device. All they need to stay connected is an Internet connection. Although ERP systems offer end-to-end functionality, companies still need to integrate them with other enterprise systems. Cloud-based ERP more easily integrates with other cloud-based apps, so businesses are able to simplify their processes.

“[Cloud-based ERP] facilitates transparent and seamless integration of various modules, providing flow of information between all functions within the enterprise in a consistently visible manner,” the report notes.

From 2016 to 2021, North America is expected to have the largest market share and dominate the cloud ERP market because of the large number of cloud ERP solution vendors and early innovative technology adopters across the US and Canada.

The Asia Pacific region will also realize growth in the cloud ERP market because there are a number of SMEs that are looking to the cloud to efficiently manage their business processes, including ERP, especially in developing countries such as India, China, and Singapore, according to the MarketandMarkets report.

Enterprises today want systems that are powerful and efficient. Organizations have been hesitant to adopt legacy on-premise ERP systems because they are hard to deploy, difficult to integrate and maintain and extremely costly.

The future of cloud ERP is bright because the technology has allowed more large companies as well as SMEs to adopt productive ERP environments.


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