How Fast Are Enterprise Resource Planning (erp) Systems Moving to the Cloud?

Enterprise Resource Planning (ERP) systems evolved from traditionally isolated applications such as payroll, billing, purchasing, sales, etc. – that neither shared a common base of data, nor interacted well with one another. The need for an integrated view of enterprise systems led to the development of sophisticated and complex software packages that could be tailored for different organizations and provide different modules (e.g. Human Resources, Financial/Accounting, and Logistics), that would interact with one another and use a common base of data. ERP systems were leased or purchased, tailored and installed as in-house computer systems resisting industry outsourcing trends. Cloud Computing, and particularly Software as a Service (SaaS), is moving in-house systems to Private and Public Clouds. Sixty percent of the organizations studied already use Cloud services. Customers Relationship Management (CRM) is prominent among the services moved to the Cloud, but close to 20% of the organization respondents moved the ERP modules of human resources and financial/account systems to the Public Cloud. New ERP development is increasingly Cloud-based, while conventional in-house ERP is decreasing. The factors that are motivating the move to the Cloud as reported by 40% of the respondents are faster access to new functionality, increase in revenue by offering new products sooner, better resource utilization, decrease of IT costs, and decentralization. Finally, the factors that are hindering the move to the Public Cloud as perceived by over 30% of the respondents are security, regulations, reliability, capability and maturity of Cloud services, in addition to IT governance and SLAs.