Enterprise Resource Planning or ERP is at a few decades old technologies including in Asia. However, IDC says COVID-19 was a tipping point accelerating enterprise application investments as organizations apply speed to their journey of digital transformation.
According to Mickey North Rizza, program vice president, enterprise applications and digital commerce at IDC, the application of big data, artificial intelligence, machine learning, conversational UI, virtual assistants/chatbots, predictive analytics, and natural language processing is enabling a new and more modern and modular enterprise experience.
"Moving beyond rationalization, modernization and transformation are reshaping the enterprise for the future."
Sampath Kumar Venkataswamy, research manager, IDC Asia/Pacific Manufacturing Insights, says: "We have been seeing increased traction from on-premises to cloud enterprise applications in the last couple of years. The changing manufacturing landscape and significant interest toward remote monitoring and maintenance continue to be among the major drivers for organizations choosing cloud-based ERP applications.
The cloudification of ERP is not limited to manufacturing as other industry segments voice similar initiatives for their own reason.
Hirak Kayal, VP of cloud applications at Oracle, noted the increase in holistic cloud computing demand and growth in cloud applications are attributable to two main factors: digital-ready consumers and governments pushing the digitization of public and private enterprises either directly through incentives or indirectly through regulation.
ERP adoption trends in Asia
In the case of ERP adoption, he acknowledged that business processes have grown in complexity and scale. Businesses are finding it difficult to manage new demands, challenges and opportunities using their existing technology landscape because they face difficulties scaling up.
“In the short-term, many businesses are doing patched customisations by bringing in emerging tech solutions like AI, IoT, machine learning and blockchain – but this approach is not sustainable,” he added.
With barriers to entry coming down, traditional businesses are being forced to innovate faster – to come up with solutions that meet current demand – or risk being left behind.
“To do this, businesses need a system or a technology landscape that provides end-to-end visibility of market changes,” he continued.
He also noted the duality of agility and pandemic-induced urgency. He added that the success of remote work would not have been possible without cloud adoption.
“It is therefore important for businesses to ensure that a cloud infrastructure is in place and work closely with a service provider to support this,” he elaborated.
The rationale for lift-and-shift
Some CIOs and CFOs that FutureCIO has spoken of the preference to take a lift-and-shift approach as their cloud strategy of choice. Kayal said this is done because some are very cautious and are concerned about any potential disruption of a wholesale move to the cloud of what they see as business-critical systems.
The lift-and-shift approach allows them to be in the cloud without changing anything in terms of the wider business operation.
Other concerns raised in various FutureCIO roundtables and panel discussions include the lack of in-house expertise and experience to guide them in the use, management and care of a cloud-native system once the solution has been handed to them and they are left to their own devices.
Change is inevitable
“Moving ERP in the cloud can change the way businesses work towards a better, efficient and highly productive and agile work culture,” concluded Kayal.
Click on the PodChat player above and listen to Kayal elaborate in detail on the growth of ERP adoption in Asia.
- What is the biggest reason why businesses are moving their ERP to the cloud?
- What is the main reason why some organisations are opting for lift-and-shift as opposed to a full cloud ERP deployment?
- What is the biggest benefit (#1 is different) for moving ERP in the cloud?