Cloud ERP: More than just a relocation of operations

There is also a lot going on here, including in German-speaking countries. Both traditional software houses and newcomers are vying for companies that want to purchase modern ERP software as a service.

In our opinion, these systems are ideal for small and medium-sized companies that want to replace individual solutions or outdated ERP applications.

There is also lively interest in SaaS solutions where larger companies want to equip new locations or branches with ERP software. These companies have already gained experience with in-house ERP.

It is hoped that SaaS applications will shorten the implementation process and simplify the management and life cycle of the software. Companies are also opting for SaaS ERP systems as they expect these modern application systems to better meet the new requirements for supporting digital business models.

This is because these modern software platforms already have features for data analysis and artificial intelligence. Many also offer development and integration environments for writing extensions and integrating third-party solutions.

Another reason for its popularity is the modern user interface - SAP customers have not exactly been spoiled here in the past.

We expect SaaS ERP to spread quickly, especially as the relevant solutions no longer only come from the USA. The local software industry is also getting involved in this market.

However, the imminent triumph of SaaS ERP is just one trend in the cloud ERP segment. Another trend concerns the relocation of existing ERP environments to a cloud data center.

We are not only talking about the private cloud, i.e. a dedicated cloud environment for the respective customer, but also the public cloud.

We are seeing a growing interest from ERP users in operating their application systems, or at least part of them, in the public cloud environments of companies such as Amazon Web Services, Google, Microsoft (Azure) and other cloud providers.

This also applies, for example, to SAP customers who are present in different regions of the world. Cloud operators have now expanded their services in such a way that business-critical SAP applications, and not just the corresponding test and development systems, can be operated on their platforms. In addition, these cloud services are also available from local data centers in countries and regions.

It is often not a question of migrating all ERP solutions to the cloud. Rather, many companies we speak to are aiming for a hybrid approach, i.e. a combination of in-house data centers with external cloud services.

So what are the benefits of moving ERP operations to the cloud? There is often talk of cost benefits. However, companies should not overestimate these. There is no need to purchase and install hardware.

Local system operation is also no longer necessary. However, cloud services do not come for free either. Anyone who only relies on the cloud as a new operating environment for ERP solutions because of potential savings could quickly be disappointed.

ERP operation in the cloud offers advantages in other ways. Firstly, there is the significantly greater flexibility in the scalability of the IT infrastructure offered by the cloud platforms.

However, not every company has the same infrastructure requirements as e-commerce providers with highly fluctuating load peaks. On the other hand, a much wider range of companies can benefit from the data management, data analysis, software development and artificial intelligence functions offered by cloud operators.

We see the use of such cloud services in conjunction with the ERP backend as a great opportunity for companies to modernize processes and support new business models.