Manufacturers’ resistance to the cloud is weakening

Cloud gears machine production

Manufacturers are slowly warming up to the idea of putting portions of their complex ERP systems in the cloud, according a report by Technology Evaluation Centers (TEC).

Although most manufacturers don't see cloud-based ERP as currently viable, they are "keeping an eye on the market for potential future use" in certain circumstances, says TEC research analyst Aleksey Osintsev. For example, one promising option is a hybrid approach of combining traditional ERP software with cloud-based ERP for non-mission-critical or non-transactional applications. Another option is a private cloud for ERP to keep company data inside the firewall.

The TEC report, titled "Cloud ERP Buyer's Guide for Manufacturing," addresses the typical questions manufacturers have about cloud-based systems and provides a framework for evaluating them.

Manufacturers typically won't rip out an on-premises ERP system just to switch to the cloud. But the report notes that there are business scenarios where cloud-based ERP could make sense:

  • Global companies with facilities scattered across countries and regions may want a two-tier ERP strategy: "local ERP systems combined with a global cloud-based ERP allows for easier information gathering from distant facilities and global data consolidation and analysis."
  • Smaller organizations that can't afford a traditional on-premise ERP but have complex business processes.
  • Companies with a "lean" philosophy that would "prefer not to deal with the complexity of an IT infrastructure" while they stay focused on business priorities.
  • New manufacturing businesses that start operating from scratch.
  • Manufacturing companies with a heavy emphasis on mobile access for remote users, or a reliance on social media channels - both of which are better handled in the cloud.

TEC provides tools, services, and research materials to help companies evaluate and select the best enterprise software for their needs.

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