Rather than adopting the "cathedral method" of IT infrastructure, a growing number of manufacturers are entrusting critical enterprise applications to the hosted model. Both AMR Research and Gartner are projecting growth of the software-as-a-service (SaaS) market to be twice as fast as the overall enterprise applications market through 2011.
According to on-demand ERP provider QAD, there are 12 major benefits to this software model for its manufacturing customers:
IT costs can be trimmed across the enterprise
Risks can be mitigated
Improved management of IT talent
Faster go-live with short time-to-value interval can be realized
Minimal effort needed to plan and execute implementations
Additional hardware infrastructure is not required
Corporate standards and version compatibility are more easily ensured
Significant reduction in local resource allocation can be realized
Easier mobility and scalability
Capital expenditures are reduced
A simple, cost-effective upgrade path can be rolled out
Manufacturers can devote more focus to true core competencies (such as manufacturing)
Brad Kenney is the former Technology Editor of IndustryWeek and now serves as director of the mobile/social platforms practice at R/GA, a global marketing/advertising firm in New York City.