2017 ERP Trends – Infographic
Category: ERP
The State of Cloud 2017 – What’s the opportunity?
With all the articles you’ve probably read on cloud, all the hype and all the talk about cloud – you’d think that every business was now at least 90% in the cloud. Yet apparently there’s still some way to go. Here’s a little round of some of the latest predictions, stats and figures relating to the cloud industry. We also think there’s a great opportunity for innovative startups in the enterprise IT and cloud market to disrupt the status quo for cloud migration and enterprise hosting services. What do you think?
So what’s the state of cloud in 2017?
74% of tech CFOs believe cloud computing will have the most measurable impact on their business in 2017. Is this the year that things get done? The year in which those large scale moves to cloud happen and central business applications finally tip over the edge into the cloud abyss? Perhaps… (Source: https://www.forbes.com/sites/louiscolumbus/2017/04/29/roundup-of-cloud-computing-forecasts-2017/#2e4fa41631e8)
Enabling top performers
A report from IBM showed that the top-performing companies in the banking sector are 88% more likely than underperforming banks to implement a hybrid cloud strategy. We’ve always had an inkling that the best performing companies have embraced cloud where it makes sense, but it’s good to see it in stats and facts! (Source: https://enterprisersproject.com/article/2017/8/hybrid-cloud-10-notable-statistics)
Cloud spend 6 times the rate of spend as traditional IT
Still pushing against the pull of cloud and refusing to budge? Apparently cloud compute spend is growing at 4.5 times the rate of IT spend – and that rate is expected to increase to 6 times the rate of IT spend between 2016 and 2020. Is your IT reseller still telling you to buy on-premise or ignore SaaS tools? Maybe 2017 is the year to reconsider your supplier strategy. (Source: https://www.forbes.com/sites/louiscolumbus/2017/04/29/roundup-of-cloud-computing-forecasts-2017/#5834998231e8)
91,740,000,000
The hybrid cloud market is expected to be $91,740,000,000 in 2021, raised from an estimate of a comparably feeble $33.28bn in 2016. With such a huge increase in the market size, we’ll be paying close attention to who the big players in the hybrid cloud market are – surely it’s going to be an attractive play for many existing cloud providers and startups? (Source: https://enterprisersproject.com/article/2017/8/hybrid-cloud-10-notable-statistics).
Global IT-as-a-Service spend
Deloitte believes that in 2018 the global spend on ‘IT-as-a-service’ will be $547bn, up from $361bn in 2016. With such an increase in spend, we are predicting that providers will be bringing evermore innovative solutions to market to make it easier for the larger organisations with complex ERP systems and on-premise legacy environments to move over. We haven’t seen much innovation in the arena of cloud migration services and taking legacy apps to the cloud – maybe this is an area for startups to focus on in the future to harness the uptick trend in as-a-service spending? (Source: https://www.forbes.com/sites/louiscolumbus/2017/04/29/roundup-of-cloud-computing-forecasts-2017/#5834998231e8)
I believe that many of these cloud statistics offer a lot of possibility for newer market entrants to capture a piece of the cloud pie – customers are looking for something different; they want simpler systems and easier paths to migration. Who will own the market for easier migration to a hybrid cloud environment?
ERP as a Sales Engine
Enterprise resource planning is rarely seen as one of the more glamorous sides of modern business. However, contrary to popular belief, ERP is not just about managing your operations. While data and processes may sound boring, they define the way modern business works. In fact, there’s a good chance that data is the most valuable asset your company owns. With the right technology at your disposal, you’ll be better equipped to leverage this data to increase sales and reduce your overheads. ERP is not just about the boring side of business – it’s also a core lead generation tool and helps you to better connect with customers.
Know Who Your Customers Are
All digital processes, from online transactions to customer support requests, generate data. Making sense of this data allows you to learn more about your customers, and that’s exactly what a modern ERP solution does. An ERP suite provides a centralised database containing information about your customers, such as their purchases, the amount of revenue they generated, the number of support requests they’ve filed and more. By making this information more accessible, you’ll have everything you need to adapt future marketing and sales campaigns to better cater to the needs and habits of your customers.
Provide Better Customer Service
Poor customer support is one of the most common reasons for consumers and businesses alike to look elsewhere, particularly now that a company’s reputation is now very much at the mercy of online reviews. Great customer service, on the other hand, creates brand ambassadors who will happily spread the good word about your company, in turn leading to increased revenue. Since a cloud-based ERP solution provides a centralised database with information about everything from customers’ past purchases to what’s in stock over at the warehouse, it allows you to provide a timely service with far more effective real-time communications.
Seek Out New Market Opportunities
Without scalability, future business growth will be severely stunted by the limitations of your existing IT infrastructure. However, modern ERP systems provide an unprecedented level of scalability, since they’re not reliant upon on-premises servers and other expensive and bulky hardware. The data such a system generates, as well as the way this data is stored and accessed, allows you to quickly identify new market opportunities and proactively respond to changes in the market. A modern and flexible ERP solution also makes it easier to expand into other locations or even to other countries.
Agile Service Delivery
The agile software delivery model is all about adaptive planning, continuous improvement and evolutionary development in accordance with the release of new technologies. By their very nature, modern ERP suites are agile, since the systems are maintained and updated constantly by vendors rather than by an in-house team. As such, ERP allows for the early delivery of business value without having to worry about the unforeseen impacts of major software or hardware releases. Other advantages include greater visibility, management and control and faster recovery from failure, all of which ultimately translate into increased revenue.
You might not think of ERP as one of the more glamorous elements of business but, by making it the central lead-generation tool of your company, you’ll quickly see just how beneficial it can be as a sales engine to drive your business forward. At C24, we strive for continual improvement of your business through an agile approach to ERP. To find out more, speak to one of our experts today.
Top Five Important Facts About ERP in 2017
(In the digital age, companies need to make sure that all the different parts of their business can share information and create strategic plans from their data. This is where enterprise resource planning software(ERP) comes into play.
Whether in a small firm that is looking to grow or a huge corporation that needs to take control of its resources, ERP is a way of making sure that people at every level have the access they need to the same information. The right ERP solution can transform every area of a business, from inventory management and human resources right through to sales.
For some time the big names in this market have been SAP, Oracle and Microsoft, but the landscape is changing as cloud ERP offerings become more prominent. Adoption is high, and the signs point towards ERP being a central factor in most enterprise IT environments and IT strategies from now on.
Here are five important facts about ERP, how its adoption is growing and how new technologies are making it easier than ever to migrate to a new ERP solution.
ERP is a huge area of growth
The worldwide market for ERP is now worth over $25.4B (1), and is increasing year on year. New innovations in business IT are resulting in an increasing demand for software that meets the needs of the companies using it.
This growth is a part of the wider expansion of the global enterprise software market which is predicted to exceed $500B by 2022 (2). Within the enterprise software market, there are two segments which are outperforming all others when it comes to expansion; customer relationship management and ERP.
Everyone’s using it
ERP is hugely popular, with a majority of firms making use of it. In research conducted throughout 2016, Panorama Consulting found that 81% of organisations have implemented ERP software or are in the process of doing so (3). A further 14% are looking at which ERP software will suit their needs. The sector has moved beyond being a niche for large organisations with complex needs and has become the mainstream and accepted way of meeting the challenges a company faces.
It’s all in the cloud
The cloud is the future when it comes to ERP, as it is with many other areas of IT. The agility of cloud-based systems allows companies to move with the needs of their customers, and this versatility is driving growth in the sector and making it much more attractive. Eric Kimberling, of Panorama Consulting, points out that between 2015 and 2016 cloud ERP rose from an 11% market share to 27% (3). This rise is set to continue throughout 2017 as companies invest more in the development of cloud-based ERP software.
Saving cash
With the increase in agility that comes with the adoption of cloud-based ERP comes a reduction in costs. Research published by market analyst firm IDC asked a variety of companies for their top five reasons for moving to cloud ERP, and 40% of them said that reducing the total size of their IT budget was the major factor (4). Another 40% said that an improvement in the way in which their resources are utilised was the prime motivator for them.
Safety is still key
When companies in IDC’s recent CloudTrack Survey (4) were asked about the use of specific applications in the public cloud, they reported increased use across several application types, including ERP.
But when these firms were asked if they have any issues with using such software, security still came up as a major concern, something which points towards this being a problem that could affect the growth of cloud-based ERP. IDC’s research found that almost half (49%) of the businesses it spoke to cited security as their biggest concern when considering a move to a cloud-based system. Other worries included the way in which such a move will fit in with regulatory and compliance issues and whether or not cloud-based systems can deliver the kind of performance that each company needs.
In terms of the growth of ERP, the facts speak for themselves. A large majority of companies already have ERP deployments in place and nearly all others are looking at their options. The future is now not a decision about whether or not to make use of ERP, but simply how to go about it.
There are understandable concerns amongst some adopters, but these seem to be based more on the wider use of cloud technology and general security issues that are applicable across many areas of IT. ERP has firmly staked its claim as the central software stack in the business world and has become integral to any company that wants to take control of its resources and improve operations.
References
(4) http://resources.idgenterprise.com/original/AST-0111292_ERP_US_EN_WP_IDCERPInTheCloud.pdf
ERP Industry News Roundup
We thought we would do a roundup of a few of the top ERP news stories over the past few weeks that caught our eye. Here is our ERP news roundup.
Cloud or nothing
Firstly, Forbes reported that many people find the headache of upgrading or implementing newer versions of their ERP systems (and the associated customizations that go with it) so painful that they decide to remain with their existing software rather than change.
However despite this reticence to change, Gartner reports that alternative procurement models to on-premise licence purchases now account for more than half of new software deployments. Maybe this suggests that when companies are electing for change on their ERP systems, they are moving to cloud or SAAS platforms.
Read the full article here.
Oracle’s Cloud Solutions for Manufacturers
Oracle has announced that it has released the industry’s first new software as a service product for the manufacturing industry in years with the introduction of its Manufacturing Cloud solution.
Oracle has said its new solution will enable the design of manufacturing processes and standards, management of work orders and the monitoring of shop-floor status – all delivered as a service rather than an on-premise licence. Manufacturing and warehouse management solutions have traditionally involved large scale purchases of expensive onsite software licences that require chunky hardware to maintain and run the applications. Oracle’s plan to deliver more of these enterprise applications within the cloud mean that companies can start to diversify how they pay for and consume their applications depending on what makes the most sense for their business.
Despite the new announcement, analysts highlighted the fact that changing applications in this sector is usually triggered by a change in overall manufacturing equipment, which then requires a software upgrade. This suggests the market is led more by the underlying manufacturing hardware systems rather than by the vendors bringing new and improved functionality to market.
Read more here.
Microsoft reorganising its ERP division
Microsoft has recently made changes to its Cloud and Enterprise business unit, bringing enterprise software teams closer to the cloud division. It has moved around teams in order to bring its Windows Server, SQL Server, Dynamics CRM and ERP teams into the vendor’s cloud organisation, to hopefully encourage more cross-divisional sales of enterprise applications into the Microsoft cloud.
Microsoft is betting on its commercial cloud revenues soaring, which includes Azure and Office365, so is trying to better integrate the range of enterprise applications that businesses can purchase through its cloud solution.
Are companies ready to put all of their enterprise app eggs into the Microsoft cloud basket?
Read the article in full here.
ERP: Departmental or just IT?
A recent study has found that despite ERP affecting many different departments and often sitting within the control of the manufacturing and production teams, 80 percent of business leaders deferred to their CIO or IT leaders for advice and strategy about moving ERP functions to the cloud.
This is perhaps the opposite of what can be seen in other departments where cloud often enables departments to circumvent IT in order to deploy a new application or service.
In reality, changing such a business-critical application such as ERP should involve all stakeholders, especially if the ERP system is highly integrated into other periphery tools and data vaults across the organisation.
The research also highlighted that 60% of companies are concerned about their dependence on an external vendor when choosing a cloud solution, yet 53% recognise that the scalability offered by cloud solutions is one of the key benefits for ERP deployments.
Read the full press release here.
Highly sensitive: Highly cloudable?
Verizon have published their State of the Market: Enterprise Cloud 2016 report which suggests that companies are now becoming more open to transitioning ‘highly sensitive’ workloads to the private cloud (which Verizon terms as a private cloud within a hosted datacentre, not on premise).
The report goes against Gartner’s wider prediction that hybrid cloud was still some way off being a mainstream method of IT resource consumption for enterprises.
The full article in Computer Weekly is available here.
Image courtesy of Mick Baker Rooster.
Cloud ERP Trends *infographic*
Enterprise Apps Are Upwardly Mobile
As employees demand more from their corporate IT systems, mobility will inevitably increase in importance as mobile or remote working becomes the norm in most workplaces. Users will expect to access their applications from wherever they are, whether that is at a coffee shop using public Wi-Fi or in a branch office. Additionally, users will want to dictate the device they use – in the same way that they would access their own personal applications (mobile banking, shopping, TV streaming services) via a range of devices to suit location and accessibility. A recent IDC survey revealed that 40% of devices used to access business applications were personally owned by the user – and this is an increase of 10% from 2010, so we can only assume this will increase.
Mismatch in expectations
Despite the evident trend, this expectation from the user is not matched by the enterprise. In fact, 75% of organisations in the survey have no business applications – or plans to create these applications – designed for smart mobile devices which highlights the disconnect between user expectation and business reality.
The reason for developing mobile versions of enterprise applications is not just to keep the user happy, but is a way for the enterprise to keep its employees connected to customers for 24/7 support and also to reduce the costs associated with purchasing devices. After all, if the user is happy to bring their personal tablet that they know and love to work for certain tasks, then that is one more device that does not have to be purchased by the company. It is important that corporate IT teams are not left behind on this issue, as their lack of involvement could lead to serious security breaches if not managed correctly. According to Gartner, 64% of enterprises said mobility projects forged ahead without the full involvement of the IT teams, with many employees utilising a range of consumer applications, personal data storage accounts and their own devices. Employees were even starting to develop their own applications on cloud infrastructure in order to do their jobs more efficiently. This is a valuable resource that organisations should harness rather than prevent.
Mobility for the sales force
Furthermore, sales and marketing teams are encouraged to spend more face to face time with clients; on the shop floor, in meetings or travelling – and mobile devices better lend themselves to this flexible approach to information delivery. Enterprise software vendors are now having to think about how they can make their apps more consumer-like in a bid to make them more attractive to organisations who are recognising that desktop based applications are not going to work within a flexible and collaborative sales environment.
If you are interested in knowing more about the consumerisation of enterprise applications then read our whitepaper on “The Consumerisation of Enterprise Applications”.
Image provided courtesy of Terren In Viriginia.
Open and Integrated – The Future for Enterprise Applications?
Open Source in the Enterprise Space
Many consumer or freemium apps take advantage of the cost benefits that Open Source platforms offer, building on previous development work carried out by online communities to offer bespoke functionality for their applications.
Whilst Open Source apps still have very low market share (as little as 1 or 2 percent in the ERP market), software vendors are recognising that in order to integrate effectively into organisations’ IT environments, it is crucial that new as-a-service applications are developed on industry standards. The rise in the use of common public cloud services will mean that many established software vendors are pushed to ensure that they deliver services that can be delivered across these public cloud offerings, by following industry recognised standards for maximum interoperability with other applications.
It is expected that the increased popularity in Open Source development will further penetrate the enterprise application market, and one suggested way cited in Enterprise Apps Today is for Open Source app developers to build on an Open Source core, but develop safer, bespoke software around this that can be supported and commercialised for better security and steadiness.
Integration
A key feature of many consumer apps is their ability to integrate into popular application ecosystems. For instance, many SAAS CRM systems (even free versions) come ready with the ability to integrate into mainstream email clients.
Within the enterprise application space, this level of integration is limited. Companies such as Salesforce are looking to create their own standards by creating the Salesforce App Exchange where developers of products that are complimentary to Salesforce’s CRM can develop, integrate and publish apps that work in conjunction with Salesforce.
Outside of initiatives such as this, integration is mainly limited to integration within a vendor’s portfolio set according to a Forrester report. For instance, you can purchase an analytics tool from the same vendor that created the ERP software and integrate the two solutions. Outside of the vendor portfolio, the level of integration is low and adherence to standards is mainly limited to a hardware and infrastructure level.
Data integration
Improving integration is an obvious objective, however it is not a simple task as enterprise applications consume, produce and store huge amounts of data, and integration between not only different applications, but on premise and cloud services, means that real-time reconciliation of data is critical for the integration work to be deemed a success.
Furthermore, integration work on the part of the software vendor across a number of different applications also ignores the fact that many enterprises have legacy IT infrastructures that do not adhere to the standards warranted by most modern application sets. Consumers are used to the flexibility and agility experienced when accessing web applications across the internet and understandably expect their work applications to meet those same high thresholds of agility and integration.
If you are interested in knowing more about the consumerisation of enterprise applications then read our whitepaper on “The Consumerisation of Enterprise Applications”.
Image provided courtesy of Nicholas Boullosa.
The effect of pay-as-you-go pricing on the Enterprise Application market
Subscription pricing is becoming a standard feature of many modern cloud based enterprise applications, further narrowing the gap between enterprise and consumer applications. Whilst companies may investigate a range of options about where to house their IT for maximum cost savings, most agree that software-as-a-service offerings reduce time, money and resources when it comes to managing the ongoing application upgrades and underlying hardware. For instance, Toyota brought a large amount of IT infrastructure back in house, but chose to capitalise on the savings offered by many software-as-a-service applications that enable the delegation of the software and hardware upgrades to the SAAS vendor.
The availability of enterprise applications under a pay-as-you-go model means that the playing field has been levelled for many smaller companies who previously could not afford the upfront licence costs – now startups and SMBs have the ability to access enterprise functionality and change perceptions about how applications should work for them.
As cloud technology matures and becomes more accepted at the corporate and enterprise level, larger businesses are also experimenting with non-traditional approaches that enable them to access subscription based pricing – without needing to go through layers of finance sign offs that may be required for high-cost capital purchases. Many are now utilising cloud based services such as Amazon Web Services or Microsoft Azure Cloud to deliver reliable infrastructure services on demand with lower costs of entry than would be available years ago. This also delivers a benefit for software developers who may not have previously had the capital available to build expensive infrastructure platforms on which to house their software; they can now enter the market at a lower developmental cost and bring products to consumers faster.
But it isn’t just startups and disruptors who are delivering their solutions via subscription models. The majority of the mature enterprise application vendors all have their own software-as-a-service offerings to meet the demands of a changing consumer market. Oracle has reported that revenues from new software licences have dropped by 17% whilst at the same time revenues from their cloud services have increased by 29% in the same period, showing the shift in the market as vendors pivot to match client demand.
If you are interested in knowing more about the consumerisation of enterprise applications then read our whitepaper on “The Consumerisation of Enterprise Applications”.
Image provided courtesy of Mighty Travels.
Want people to use your enterprise apps? Make the user interface friendly!
User adoption for enterprise applications is critical, especially in an era of BYOD (Bring Your Own Device) or even BYOA (Bring Your Own Application), and the main way of improving satisfaction and adoption of enterprise applications is to improve the user interface.
Increasingly, enterprise app vendors are recognising that in order to increase user satisfaction with their solutions, interfaces need to be as user friendly and intuitive as possible; on a level with the types of user interfaces seen in the consumer sector (i.e. Facebook, Twitter or online booking platforms). Nobody would expect to be trained on how to use the functionality in Facebook or Twitter, however many enterprise applications require hours or even days of training before a user can be deemed ‘fully functional’. Analysts have even cited that 80% of enterprise apps succeed due to their ease of use, hence it is of critical importance that new products and functionality upgrades are developed with immediate use in mind.
Users expect to be able to sit down and immediately use an application, with little to no training. A founder of a CRM app called CRMNext found that the main reason that 50% of CRM application deployments failed was due to difficulty and complexity experienced by users. Additionally, employees expect to connect to services from a range of devices, in the same way they would access their consumer applications from a web browser on a desktop or via their tablet or smartphone with minimal effort. Compare that with a traditional desktop application that has no mobile functionality, and the gap between the consumer world and the enterprise world becomes glaringly obvious. Combined with the fact that many of these consumer applications are free or low-cost, employees quickly lose patience with applications that can sometimes have cost millions to purchase, implement and manage, but which still do not work and adapt to their evolving expectations.
Research cited in a recent article by Forbes highlighted that well designed software interfaces are proven to lead to higher productivity levels as users spend less time figuring out how to use unintuitive applications and more time interacting with the tool. As PC Advisor put it, “the difference is customer experience”. Users must be able to install and be up and running immediately, without reading a manual on how to operate the application.
Vendors are therefore looking to make their applications slicker, simpler and low on bandwidth requirements so that apps can be accessed quickly and easily online and through mobile devices.
Despite this progress, the cost of simplicity is high – as simplicity for the user is often a result of lots of backend technical work performed by the central IT team to ensure that all tools integrate seamlessly. Instead, IT teams should steer away from the speeds and feeds of IT and instead look at developing valuable ‘business partnerships’ with their application users to ensure more productive and optimised usage of apps across the workplace in the beginning, rather than trying to retrospectively integrate disparate systems.
If you are interested in knowing more about the consumerisation of enterprise applications then read our whitepaper on “The Consumerisation of Enterprise Applications”.
Image provided courtesy of Cristiano Betta.
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