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Cloud-based solutions and two-tier ERP systems to rise in 2011

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2011 and 2012 will see the continued growth of cloud-based solutions and two-tier ERP systems, says Softworx MD Jane Thomson.

“While most ERP systems still involve on-premises solutions, cloud-based systems are gaining favour, and will continue to do so over the next two years,” she explains. “This is due to the rapid deployment capabilities, constant innovation qualities and subscription pricing of cloud-based offerings."
The importance of this new trend was stressed by Thomson at Softworx Ignite 2011, the company’s annual customer event, which took place at the Wanderers Club in Johannesburg last month.
Thomson stressed that driven by the need for flexibility and speed, organisations will increasingly implement cloud-based outsourcing solutions in the coming year.
The fast-paced business environment encountered by global companies today involves the need for decreased costs and increased flexibility. These are some of the factors driving a related emerging trend in the industry, being the implementation of two-tier ERP systems, says Thomson.
“Businesses today are constantly growing and changing, and software needs to be able to keep up with the potential volatility of the global business environment. Two-tier ERP systems provide this by alleviating the challenges of migrating one ERP instance across multiple subsidiary channels and different business units and this trend is set to continue during 2011,” says Thomson.
A recent report by Constellation Research on "The Case for Two-Tier ERP Deployments" reveals that more firms are looking at a two-tier architecture. In the most recent survey, 48% of companies surveyed responded that they were considering a two-tier ERP system, up from 32% a year ago.
The main drivers behind the move to support multiple ERP systems were the high costs of ERP systems and upgrades. The survey also showed an increase in the importance of innovation and geographic requirements, making multiple ERP solutions to cater for these specific needs more attractive.
Two-tier ERP systems allow companies to have one full featured ERP solution at head office and a second ERP system for company subsidiaries. Other companies might select one ERP solution for their corporate and financial systems and another to deal with their specific plant and manufacturing operations.
“Companies are increasingly finding that running everything on a single ERP solution has proven unmanageable, expensive and inflexible in the fast-paced global world,” says Thomson.
Running a single solution leaves users with no downtime windows for preventative maintenance or upgrades and the diverse needs of many companies cannot be met by a single system. Companies are also finding that upgrading a single global system is both costly and time consuming, which is not the case with a two-tier ERP system where deployment can be quick, convenient and cost effective.
“As an Infor reseller in the South African market, Softworx provides local customers with access to multiple InforERP products based on what types of manufacturing or distribution they do, as well as their geographic requirements, support, financial application needs and platform preference. These ERP product options can then be combined to suit a client’s multi-level ERP system requirements,” concludes Thomson.