Will the cloud and the premises converge in ERP this year?

///, Manufacturing Productivity/Will the cloud and the premises converge in ERP this year?

There has been a long debate on what is the ideal strategy for a location-based ERP implementation. Many manufacturers prefer utilizing the security and reliability, along with the tangible elements, of a solution that is on the premises. On the other hand, more businesses are turning to the cloud as software as a service has become faster and more agile, meeting needs as they come rather than on projections. Both have their benefits and flaws, with many implementations including Microsoft Dynamics NAV 2015 offering both as a separate option. However, there is an increasing demand from companies for using these options as a part of a comprehensive business strategy. With 2015 in full swing, it's becoming more apparent that businesses are looking for an ERP solution where it's hard to tell whether the software is working on-premises or in a data center.

A merger that is useful
What is helping bring about a convergence between on-premise and SaaS is the fact that, according to Panorama Consulting, vendors like Microsoft are offering their software in both formats as part of an implementation package. Instead of having to decide between one or the other, a company can use them in tandem however they please. This eliminates a lot of the headaches that go with the decision making process. Instead of phasing in completely new software implementations, businesses can work with the hardware they have. As a consequence, manufacturers are utilizing the two formats to their needs. Customization of ERP solution greatly helps in this situation.

This is not to say that one flavor won't dominate over the other. Such a solution will depend on the immediate and long-term concerns of the company looking to implement the system. As consulting firm Certus Group notes, what makes cloud-based ERP so alluring to businesses as a whole is the lower overhead and upfront costs that a company has to invest in order to complete the installation. That is unlikely to change anytime in the near future. With that said, however, there is a great benefit of utilizing the cloud with an on-premises solution by creating a hybrid system. For example, customer information can be placed in the cloud, while specific processes related to how resources are maintained will be left on local servers. Such policies can help make manufacturers more agile in specific ways, yielding stronger profit margins.

Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website today.