Future for Cloud ERP? Still Cloudy

Nov. 19, 2010
Aberdeen study finds that more manufacturers are considering SaaS, but only 39% of respondents are utilizing the service.

As digital technology infrastructures continue to advance at a dizzying pace, perhaps the most promising (and overly-hyped) trend to hit the market in recent years is the emergence of cloud computing. Wherever companies turn, theres someone ready to tell or sell something related to the ubiquitous cloud.

According to new research from the Aberdeen Group, more and more manufacturers are starting to accept the concept of enterprise resource planning systems through software as a service.

The report, entitled Leveraging SaaS ERP for Impressive Results, reveals a 70% increase in the willingness of corporations to consider ERP as SaaS. This comes, in large part, as a result of users wanting to avoid complex upgrades and control IT costs. System features are also a key variable, in addition to vendor viability, references, ease and speed of implementation and ease of use.

The research found that while most ERP providers use a waterfall development approach to ERP implementations, which is a sequential software development process, the most highly-rated vendor in SaaS was Plex Systems, whose ERP services go back more than a decade.

The survey found that of the 878 companies queried, the average survey respondent performed a major upgrade every 3.5 years. Skipping releases is a common occurrence, with 29% of companies indicating that ERP upgrades are too difficult.

One reason Aberdeen rates Plex so high is it offers new features on its SaaS every day, some extensive and some minor.

The ability to configure or tailor the solution without touching the underlying program code has come a long, long way in recent years and the average respondents to our survey indicated 59% of all necessary tailoring can be done without programming, said the reports author, Cindy Jutras, who serves as Vice President and Research Fellow at Aberdeen Group.

But while willingness to consider SaaS as a deployment option for ERP might be surging, it still isnt being deployed on a mass scale, as only 39% of respondents are utilizing the service. The top reason cited, according to the study, was users desire to control their own upgrade process.

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