Cloud ERP: Raised expectations in the cloud

Organisations have high expectations of the cloud when it comes to hosting and running their back-office functions, according to a recent survey of IT leaders. For example, they want cloud platforms and services to be high-performance, reliable, secure, and compliant with data protection regulations - baseline concerns for any organisation.

But that's not all: organisations demand cost reductions and cost predictability. They want the cloud to offer them agility and competitive advantage, and the ability to scale to meet the peaks and troughs of periodic workloads.

More, they want applications to be always up to date, with access to new product features, and there to be a single data set. And as if that's not enough, business leaders demand customer insights, employee insights, and an improved working environment for themselves and their staff.

Taken together, that's a broad spectrum of expectations, partly fuelled by the marketing hype about cloud platforms.

These are just some of the findings of a Computing Research survey of 150 IT and data managers in medium to large organisations. Respondents came from most sectors in the UK economy, with a particular focus on areas such as business services, property, law, accountancy, technology, manufacturing, engineering, and the pharmaceutical sector. These are all markets for whom reliability, transparency, trust, and security are paramount.

The option to access artificial intelligence (AI) and software automation capabilities in the cloud would be another major bonus, found the survey - cited by 64 percent of IT leaders.

According to analysts at IDC, worldwide spending on artificial intelligence (AI) systems is forecast to reach $35.8 billion in 2019, a 44 percent year-on-year increase. Much of that growth will come from the application of AI in the cloud, because of what IDC sees as a symbiotic relationship between the two technologies.

The business benefits

From the Computing research survey, it's clear that businesses see particular benefits in integrating their finance, human capital management (HCM, or HR), and planning applications into a cloud-based enterprise resource planning (ERP) platform, alongside their customer-facing functions.

Or at least, they have high expectations of achieving those benefits from their remotely hosted services - perhaps partly due to the ‘consumerisation' of technology, and employees' familiarity with consumer apps, public cloud platforms, and social networks that are intuitive and easy to use.

It's fair to say that such services rarely impede people's daily lives or communications. Indeed, a major outage at a popular consumer cloud platform would make the national or international news. Nowadays, that same level of expectation is ‘ported over' to professional services.

This shift to a mobile, flexible, platform-centric, and demand-driven technology model has happened almost overnight in business terms, and has challenged the traditional enterprise model of ‘the office' being a place that offers professional-grade technology to on-site workers.

Today's office is often more a set of expectations, skills, teamwork, aims, and brand values - a mindset, perhaps - all tied up and delivered by technology that can be accessed from anywhere.

Counting the benefits

According to Computing, the on-stream availability of new product features was identified as either a major or significant motivation for moving to the cloud by over 81 percent of IT leaders.

Scalability was cited by nearly 80 percent of respondents; greater agility and competitive advantage by 74 percent; cost reduction by 73 percent; an improved working environment by 70 percent; cost predictability by 68 percent; and the performance and proximity of applications by 67 percent.

It's fair to say that these are now core expectations for most respondents, and business and IT leaders trust that they will be met.

Asked how successfully their reasons for shifting functions to the cloud have been turned into business results, 79 percent said that scalability has been achieved either "extremely successfully" or "very successfully".

Nearly 75 percent said that cost predictability is now greater against those measures; 73 percent that agility and competitive advantage have been realised well; 67 percent that performance has improved; and 63 percent that costs have been reduced.

The security challenge

But while shifting functions to the cloud can produce these and other benefits, many users remain concerned about potential risks to data security (42 percent, with 38 percent of respondents believing their fears were justified). With rising regulatory demands and financial penalties for non-compliance, those fears are understandable.

However, the survey produced some surprising findings for those people who regard the cloud as a security risk: more IT leaders see the cloud as promising improved data security over on-premise systems: a total of nearly 70 percent described better security as either a major or significant motivation for moving back-office functions into the cloud.

Sixty-four percent of IT leaders said that data security has been improved extremely or very successfully, with a further 25 percent acknowledging that some improvement has taken place.

 

This article is from Computing's Cloud ERP Spotlight, hosted in association with Workday.