Cloud not ready for ERP in manufacturing

While cloud computing is one of the latest trends in the IT industry, the delivery of computing and storage capacity as a service is not that new. In fact, some of the underlying concepts of cloud computing date back to the 1970s with users accessing mainframes via thin clients or terminal computers.

Yet, cloud computing is not something that any company, especially those in the manufacturing industry, can afford to blindly adopt. The mission-critical nature of manufacturing operations and their systems necessitate a cautious approach and one that is not very open to cloud-based solutions.

Manufacturers are wary about a multi-tenant approach, which sees multiple companies use the same cloud services on the same platform. They want a service that is dedicated to them and tailored to suit their unique needs.

Mission-critical software like Enterprise Resource Planning (ERP) also requires an absolute certainty that things are running the way they should. Imagine the consequences to a business if the manufacturing systems go down for a few hours due to a problem with the cloud.

Manufacturers are also wary about who accesses their data when it is in the cloud. Another question is who owns that data? If a manufacturer relies on vendor X for its cloud requirements and that vendor decides to either move its servers or close its business, then what happens to the data?

In general, manufacturers are suspicious about the cloud for mission-critical applications. When you are a manufacturer, you cannot rely on a solution that makes every customer work the same way. You need something that is tailored to your specific requirements.

For manufacturing, ERP solutions in the cloud are a challenge for the industry and not something that can easily be solved with an out-of-the-box solution. While one needs to monitor developments in the cloud space, it is not yet at the mission-critical or customizable level that manufacturers require.

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This entry was posted in Business Software, Cloud computing and tagged , , by Kevin Dherman. Bookmark the permalink.

About Kevin Dherman

I am a Product Development Manager at SYSPRO, and have been at the company since 1999. My passion for software development started at a very young age. Along with my team, I spend most of my time doing research and development – where I am responsible for investigating new technologies, integration strategies and development. Before joining SYSPRO I worked at a SYSPRO customer, where I developed add-on programs, reports and a fully functional Kan-Ban system. I have been involved with the architecture and development of e.net Solutions, SYSPRO Reporting Services, SYSPRO Office Integration and recently SYSPRO Workflow Services. I have always believed in choosing the right technology at the right time – where the success of the modules that I have developed are testament to this. I often work closely with the Microsoft development team in Redmond, whilst in the RND stages of a new module. I have lectured at numerous Microsoft Tech-Ed and Microsoft Developer Days too. I am an avid Manchester United supporter and enjoy watching the English Premiership. I also coach both my son’s junior soccer teams.

2 thoughts on “Cloud not ready for ERP in manufacturing

  1. Great points Kevin! You’ve highlighted a lot of the concerns I have heard from Canadian customers exploring a “move to the cloud.” Some of these concerns can be addressed by a credible hosted/Managed services solution provider that offers dedicated environments, fail-over options, SYSPRO ERP experience and location independent data-centers. Though Manufacturers may still be wary about moving into the cloud, their IT departments are moving more quickly by farming out crucial but mundane tasks such as nightly backups. How long will it be before manufacturing follows with their ERP systems?

    • My blog has caused quite a stir, given the number of emails I have received querying what SYSPRO’s stance and strategy is on cloud computing. SYSPRO does offer private cloud services which enable us to tailor the cloud solution to our customer needs and we have some great customer examples of this. However, I agree with the comment by Steve Ballmer, CEO of Microsoft, that the public cloud is not yet ready to properly support mission critical applications, such as manufacturing ERP. Having said this, as cloud services continue to develop it’s just a matter of time before we see mission critical applications in the cloud. SYSPRO recognises this trend and is actively working to make our software platform agnostic. To this end, we are in the process of extending SYSPRO to cloud aware platforms like Microsoft’s Windows Azure.

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