cloud computing

Manufacturing and heavy industry slower to adopt ERP in the Cloud

A survey commissioned by Hitachi Solutions Europe has revealed that 25 percent of manufacturing and heavy industry organisations, including engineering, transport and construction, have moved all or part of their Enterprise Resource Planning (ERP) systems to the Cloud or are in the process of doing so. The survey questioned 315 senior finance professionals with the aim of understanding their position and perceptions around ERP in the Cloud; 79 respondents worked in this sector.

At this time, 75 percent of manufacturing and heavy industry respondents have not moved their ERP system to the Cloud, but 25 percent said they would consider moving to the Cloud in the future. Of that 25 percent, over half (60 percent) said they would be looking to move in the next two years. This suggests that manufacturing and heavy industry organisations are behind the curve when it comes to adopting ERP in the Cloud, in comparison to other sectors. Results from the group of 315 cross sector respondents reveal that 44 percent would consider moving to the Cloud in the future and of that 44 percent, two thirds (67%) would be looking to move in the next two years.

Tim Rowe, Director, Hitachi Solutions Europe said, The survey results suggest that while we are starting to see a shift in people’s attitudes towards ERP in the Cloud, in sectors such as manufacturing and engineering, the approach is a cautious one and concerns clearly remain around how they are going to mitigate some of the risks.

The biggest perceived risk associated with moving ERP to the Cloud amongst manufacturing and heavy industry respondents was connectivity and dependency on a third party provider, with 51 percent ranking this as their first or second greatest concern. This was followed by data security and privacy risk, with 47 percent ranking this as their first or second greatest concern.

Rowe explained, ERP software automates many back office functions but also integrates with areas such as product planning and even the manufacturing process itself, so it is understandable that the biggest concern from respondents in manufacturing and heavy industry was connectivity and dependency on a third party provider. Working with a trusted technology partner can help to mitigate this risk.

For the manufacturing and heavy industry respondents who have already moved all or part of their ERP to the Cloud, 56 percent ranked easier access to information as the first or second greatest benefit they have seen since moving, followed by reduced operating costs (50 percent of respondents).

Steve French, Executive Vice President, Hitachi Solutions Europe said, For organisations in manufacturing and heavy industry, it will be crucial to get ERP in the Cloud right from the start. Selecting a trusted implementation partner that can work with you to ensure that any connectivity risks are mitigated and will support you throughout your Cloud journey is vital.

 

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