SaaS-Based ERP Leading the Way as Manufacturers Take to the Cloud
For the next decade, the principal driver of IT productivity in the
manufacturing sector will be cloud computing. So says industry analyst IDC in a recent report, Business Strategy: Cloud Computing in Manufacturing.
According to Bob Parker, group vice president of Research at IDC
Manufacturing Insights, "a business-led cloud investment strategy will
deliver the dual benefits of greater business capability and lower IT
Forrester Research notes that software-as-a-service (SaaS) is the largest and most strongly growing segment of the cloud computing market. According to its recently published study
of the cloud market, the total market size of SaaS in 2011 is $21.2
billion, an amount expected to burgeon to $78.4 billion by Q1 2016.
“Highly integrated software applications that process the most sensitive
business data, such as enterprise resource planning (ERP), are the lantern-bearers of SaaS adoption today,” says Forrester analyst Holger Kisker.
The foundation of this growth is better understanding of the profound
advantages of SaaS, particularly for small and mid-sized manufacturers
and distributors. Principal advantages are:
- No installation needed
SaaS runs from a common web browser logged onto a SaaS provider’s website. There’s no need to spend hours installing software.
- Platform neutrality
The user’s hardware platform
isn’t linked to the software; whether a company is running Windows,
Linux, or Mac, all that is needed to access the application is Internet
access and a Web browser. This makes it simple to get up and going, and
also provides greater flexibility for platform change in the future.
- Automatic upgrade/version control
user logs into a SaaS account, there is only one version available—the
latest one. Corporate IT has no need to worry about software
obsolescence or version control.
- Better accessibility
SaaS allows users to work
when and where they choose. All software-related data is stored on the
provider’s servers, making access global to authorized users with an
The idea of simplicity has rarely been associated with ERP solutions.
As SaaS-based advantages make the implementation and usage of ERP less
complex, smaller manufacturers and distributors are taking advantage of
the enhanced functionality it can provide. Because of SaaS, small
concerns talking ERP are no longer thought of as having their “heads in
the cloud,” but rather as being grounded in the new reality of