Large ERP Vendors Stepping down a Market. Organizations have accepted the cloud model which has enabled ERP cloud vendors to offer customizable software that can accommodate nearly every type of vertical and industry. The SMB market has seen the largest increase in smaller ERP system vendors. Larger vendors are stepping down into the SMB market through smaller deal sizes and have realized this is where the largest opportunity and growth exists. Having moved down a market, larger vendors often have trouble harmonizing their solutions towards smaller businesses. Their enterprise solutions often do not translate to smaller organizations due to the SOA, technology stack and if the solution is capable of being delivered as a cloud system or not.
Private Clouds and Hybrid Clouds. Private and hybrid clouds are now a moving target as to what is defined and how these models are deployed. Organizations are opting to use private and public clouds to build infrastructure, provide sustainability through scalability and offer quick agility if done correctly. Organizations should implement a strategy to select the right solutions to align their business initiatives with the correct technology. Organizations are choosing a combination of deployment models where infrastructure, applications and platforms are created as part of the overall IT strategy. A combination of products, services, applications and infrastructures reside partly behind the firewall with on-premise systems and the remainder of the systems and applications reside in the cloud, which may be private/public/hybrid or any combination thereof.
Combining the two strategies of private and and public clouds is rapidly becoming a norm as some technologies and systems are better suited for delivery through the cloud. Organizations can leverage the strengths of each model to maximize the effectiveness of the combined IT infrastructures. This new model requires organizations to closely examine the benefits of each and how to orchestrate each application (whether public or private) to reduce its IT investment and retain a comparable level of service of software or technology delivery.
Industry Specific ERP Emergence. The SMB market has shown the greatest increase in spending and most opportunity for vendors. New SMB ERP cloud vendors are emerging with new industry specific solutions. Solutions within this market cater to service-based and product-based type companies which were previously limited in the SMB space.
Further specialization in the SMB ERP market has created diverse modular functionality to comply with different business requirements. New system types have evolved, such as Sales Resource Planning and ERP for Services systems. They now include interactive GUIs – CRM, PM, Project-based Accounting, BOM, Reporting, CPQ, Design, Social, Mobile and Collaboration. This combination of modules is unique and ever-evolving as organizations shift and add new business models that require flexible systems.
Organizations should closely examine which functionalities are needed. While the differentiation within services and manufacturing still exist, new types of modular framework forming such categories as Service Resource Planning and ERP for Services complicates software selection for organizations. Additional choice and functionality overlap will complicate the buying process for organizations. Organizations will be forced to differentiate, prioritize and weigh the economic impacts of selecting the correct system.
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