According to a recent article by Forbes, PwC is predicting that by 2016, investment in SaaS or cloud based ERP solutions will more than double to $78 billion while investment in traditional on premise ERP systems will decline over 30% to less than $15 billion. Their recent analysis of cloud based ERP adoption shows that net new license revenues for traditional ERP systems have been declining since 2013 to a level that has already been surpassed by global revenue from cloud-based SaaS ERP solutions.
The report by PwC, Beyond ERP: New technology, New Options also states that Leading cloud based ERP providers including Acumatica, Financial Force, Intacct, Kenandy, NetSuite, Plex Systems, Workday are all increasingly being integrated into Hybrid ERP and two-tier ERP system architectures as their customers shift gears into new business models. To support new business models, enterprises are integrating cloud based and legacy ERP applications, creating Hybrid ERP systems that can scale to new customer demands.
PwC is seeing enterprises opt for cloud based ERP systems and applications that can scale across human resources, supplier management, e-commerce, customer relationship management, selling, service and many other areas. Hybrid ERP systems are enabling enterprises to make the most of their legacy, on premise ERP systems while scaling their IT strategies to align with and accelerate current and future customer-driven business models. Hybrid ERP systems are especially valuable for manufacturers who rely on diverse sourcing, supply chain, production and service operations as they can unify a company across diverse locations. Multisite ERP support has challenged legacy on premise ERP providers in the past, yet the current generation of Cloud ERP providers are looking to capitalize on this requirement.
Another report by Hitachi Solutions Europe has found that over 31% of organizations have already moved part or all of their ERP solutions to the cloud. Looking at the responses from larger organizations (those with over 500 employees) suggests that it is no longer just smaller organizations taking a Cloud-based approach to ERP. In fact, almost a third of larger organizations surveyed said they have moved all or part of their ERP to the Cloud, or are in the process.