Cloud ERP is Growing but is still seen as a Leap of Faith for Large Organistations
At the 2015 IFS World Conference in Boston, IFS announced the global availability of IFS Applications 8 and 9 as a fully managed service on Microsoft Azure. Their partnership with Microsoft brought together a recognised leader in enterprise software with a top-class cloud-based platform.
The development was hailed as offering customers a flexible and cost-effective way to benefit from IFS Applications. With Garner predicting that 47% of organisations will move their ERP to the cloud in the next 5 years, this new offering aims to help to make that prediction a reality.
IFS offers their customers two options for deploying the service. The first is a single-tenant IaaS option that enables customers to utilise IFS products on virtual servers in Microsoft Azure, rather than in their own data centre. This option is ideal for customers who want to retain control over the application layer themselves, or who have an existing partner they wish to engage to manage the IFS products for them.
The alternative option is a full-service managed, single-tenant offering, where IFS manages the cloud infrastructure, operating system, database, middleware and IFS products, all while offering 24-hours a day, 7-days a week, 365-days of the year support. This option enables a company’s internal IT staff to focus on other important business requirements, rather than dedicate a large portion of their time to administrative maintenance and upgrades.
The following year, at the 2016 IFS World Conference in Gothenburg, the company announced that the fully managed, single-tenant cloud offering had been well received by the market. That past year, 34% of new customers in IFS’s three largest regions (the Americas, Western Europe and Scandinavia) opted for cloud-based enterprise software.
While this is undeniably a good figure, concerns still remain within the market and potential customers as to whether or not cloud ERP can be ‘trusted’. There is still some way to go to challenge the existing mindset, particularly amongst the large multinational customers, that cloud ERP is a risk that is not worth taking just yet. In the main, it is still only smaller to medium sized organisations who have adopted IFS’s fully managed cloud solution and even then, few have moved their entire operations to the cloud, instead choosing to limit the move to certain departments or sections of the business. For these organisations, particularly if they have limited IT staff to dedicate to management of their ERP solution, there are clearly major benefits associated with moving IFS to the cloud:
- It can be deployed quickly and respond to change
- A Customer can choose if and when to upgrade and specify maintenance and upgrades to suit their business needs.
- Round the clock access to data, anytime, anywhere and from any device
- The ability to scale up or down as you choose, according to the needs of your business
- The ability to bring your existing database licenses into the cloud
- Global enterprise support around the clock, 365 days of the year
- Enterprise grade security
- IFS products have been tested and optimized to work seamlessly on Microsoft Azure
However, despite these potentially business changing benefits, ‘would be’ cloud ERP users are still not fully convinced. Cost is one area where many companies take issue. This is generally seen as a positive factor, in favour of cloud solutions, however for some companies, this is a reason to pull back and stick with on-premise ERP. While there is certainly more up-front investment associated with an on-premise solution, the lack of monthly vendor fees which are necessary with cloud ERP, can mean that overall, this option is more cost effective in the long term.
There are also still concerns around data-security. This is especially the case amongst organisations who perhaps hold government contracts or deal with highly sensitive information or intellectual property. While it is true that security, or the perceived lack of, is less of an issue that it has been in the past, the worry over security breaches is still there and bizarre as it may seem, many companies feel more confident about storing their data on their own, tangible, on-premise servers than in a data centre they feel they have no control over.
Performance is another area where deploying via the cloud gives rise to concern. Large companies carry out thousands of transactions every day via IFS. If each time a transaction is made and this leads to a delay in that transaction being processed this becomes incredibly frustrating. Equally, if a user is experiencing delays in retrieving data, due to a strain on the system, this is going to render the solution unworkable in the long term. Again, this is something potential customers of cloud ERP solutions are looking for reassurance from the vendor by way of reference or from holistic benchmarking data.
Our job as an IFS partner and implementation specialist is to help large organsiations understand how a cloud hosted solution might work for them and help them to see that cloud ERP is a viable solution for their business. Clients can take advantage of our ‘techncial grey matter’ and work with us to understand how their solution might work, what servers and other infrastructure they might need and how we can help them make the leap and create an IFS cloud solution that works for their business.
As part of our own R&D investigations, we are building our own capability in the hosting of IFS on the Azure platform (or alternative platforms such as AWS or Oracle cloud). We have already significant experience of using Azure as a platform to host web applications or backend web services for mobile and for extending our infrastructure through virtual machines, for example. Building on this technical expertise and combining with our experience in the IFS arena, we are building a set of IFS/Azure configurations that package good practice with the various components of an Azure virtual network and that will allow companies of varying sizes to understand the setup required plus the costs and maintenance involved.
Clearly, moving an organisations entire business systems to the cloud is not a decision which is made easily and without a lot of investigative research. If you are currently considering whether to stay on-premise or move to the cloud and would like to find out more about IFS’s cloud offering, in particular best practice set up and configuration, we would be happy to discuss your requirements with the aim of developing a best fit solution for your business.
Article by Gary Clark
To find out more about how Cooper Software can help your business with an IFS Cloud Solution, contact me on 01383 840 700.