For the ERP software space, 2012 was a year of extensive appraisal of the suitability of cloud-based ERP software to the manufacturing industry, says Aleksey Osintsev, TEC research analyst.

The software-as-a-service (SaaS) concept is being clarified, and lessons are being learned by manufacturing companies around the globe. New vendors are offering various cloud-only ERP solutions for manufacturing, while many traditional vendors have developed cloud or SaaS versions of their existing applications, or new cloud systems that parallel the older on-premise ones. Even more significantly, manufacturers are giving cloud deployment serious consideration as part of their IT strategy for the future.

Businesses are starting to realize that perhaps they should not be lemmings in following the crowd to the cloud. In manufacturing, a deployment decision depends on a large number of factors, and these are unique to each business. While some manufacturers can adopt the cloud readily, it won't work for everyone. It is obvious now that cloud ERP adoption is sometimes a controversial process, more complex than it originally appeared, and not that different in terms of long-term total cost of ownership. Some ERP vendors have had to discontinue their cloud offerings. Cloud ERP offerings are not yet mature enough or sufficiently diversified to fully fit the entire manufacturing industry. So far, pure multi-tenant cloud-based manufacturing ERP software packages do not (and may never) fit some types of manufacturing at all.

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Keywords: supply chain management IT, supply chin solutions, supply chain systems, ERP systems in manufacturing