The Cloud is Alleviating the Financial Drain of Legacy ERPs
New business technologies, like cloud applications, AI and big data are rapidly enhancing the capabilities of businesses. But according to findings from GCN, these rapid advancements are rapidly rendering business systems obsolete.
This is the case for many traditional ERP models. When installed, a contemporary ERP offers cutting edge systems that bestow countless advantages upon users. But a couple years later, when new functions and capabilities become available, these older ERPs look primitive by comparison.
ERPs delivered through the cloud tend to age better. The systems are more flexible and can accommodate new technologies with greater ease and less expense. “The capabilities of on-premise simply cannot keep pace with cloud-based,” Yvette Cameron of SAP SuccessFactors says.
Cameron’s view is corroborated by the majority of ERP providers, as well as the numerous businesses who have, or are looking into making the switch. Even the U.S. federal government recently touted the advantages of moving to the cloud.
Beyond functionality, older systems can be a burden for a company’s finances. According to GCN’s findings, “In 2010, federal agencies spent about 68 percent of their total budget on IT operations and maintenance.” Though more recent numbers are not provided, that expense is believed to have increased.
While these figures are specific to the public sector they are mirrored in the private sector. The cloud vs. on-premise dichotomy often plays out as innovation vs. upkeep, with the former acting as a fundamental tool for companies, especially small and mid-sized ones looking to grow.
These findings reinforce the growing notion that the cloud has disrupted the tech industry, as well as changed the way businesses are embracing digital technologies to grow.