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Cloud ERP for Manufacturers: Two Sides of the Coin

A look at the advantages and disadvantages of cloud ERP for manufacturers

Cloud computing has been an important trend for several years now and that trend is continuing to gather weight with new and improved ERP software offerings for manufacturers. Like any ERP selection choice, the decision to move to the cloud has pros and cons compared to traditional on-premise ERP systems.

One of the biggest advantages, regardless of the vendor selected, is low cost of ownership. There is little up-front cost for cloud ERP software and often no additional hardware cost. One low subscription gets the software now and includes all aspects of ERP support. You don't need a help desk and you don't need people to maintain the servers required for an in-house ERP.

Another major advantage to cloud ERP is that you can use it anywhere. This is not just mobile. If you acquire another business, your ERP is ready to use in the cloud right away.

Start up is very quick. Epicor estimates 20- 30 days to go live. Many traditional ERP systems require years to prepare before ERP go-live.

Two Sides to Every Story
On the other hand, manufacturers have many specialized needs that might not be satisfied by one-size-fits-all ERP systems from cloud providers. I can only find one cloud system specifically designed for process manufacturers. Generally cloud ERP systems are designed for small job-shop types of manufacturers. Cloud systems are still behind in-house systems in rich functionality available to a wide variety of manufacturers needs.

There are still only a small percentage of manufacturers using cloud ERP. This means your peer group whom you might contact for help and suggestions is quite small. You will be the guinea pig, so to speak.

Things are changing though. Netsuite began with light assembly and less complex manufacturers as its target. They now provide work in process tools that will broaden the target market substantially and they continue to improve the scope of their system. Plex began with automotive suppliers in mind and has solutions to fit a wider variety of manufacturers today. Microsoft recently made their dynamics software available over the cloud. Epicor, Infor, QAD, SAP all have cloud ERP available and more providers will add cloud offerings to meet the needs of manufacturers over time.

If you think cloud ERP is the answer for you and your business but still don't see what you need, be patient. What you need is probably coming soon to an internet connection near you.

More Stories By Tom Miller

Tom Miller is an ERP project manager and writer at ERP Focus - the free and independent resource for ERP advice and knowledge. He has completed implementations of Epicor, SAP, QAD, and many more ERP systems in manufacturing companies across North America. For daily ERP updates, follow @ERPfocus on Twitter.

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