Growth in Cloud ERP Adoption for Manufacturers


Growth in Cloud ERP Adoption for Manufacturers

Cloud-based technologies were slow to be adopted by the manufacturing industry, but today, with the cloud being more and more integrated with our everyday lives, cloud ERP adoption for manufactures is on the agenda of many.  The benefits are numerous from improved efficiencies and process automation to driving growth.

Recent research shows that even though manufacturers recognize their need to move to the cloud, only 31 percent of manufacturers say they are making significant use of cloud applications. Interestingly, 84% of manufacturers view cloud technologies as one of the keys to achieving growth strategies, while only 17 percent consider cloud a strategic investment.

Cloud Spend for Manufactures Growing 22.5% Annually

Earlier this year, IDC, an independent research firm, stated that worldwide spend on public cloud services would reach $210 billion by the end of 2019, an increase of 23.8% over 2018. Even though IDC predicts  that annual spending will slow down slightly between 2017-2022, they still anticipate a 22.5% compound annual growth rate (CAGR) which would put the cloud market up to $370 billion by 2022.

Manufacturing Amongst Top 5 Industries for Cloud Growth

It should come to no surprise that IDC predicts that the manufacturing sector will be amongst the top adapters of cloud technology. IDC’s research shows that the top three industries – manufacturing, professional services, and banking – will each spend more than $20 billion on public cloud service. Right behind discrete manufacturers are the process manufacturers and retail industries which are anticipated to spend more that $15 billion each in public cloud services.

Cloud Enables Small Manufacturers to Compete with Large Manufacturers

Back in the day of legacy ERP, only large manufacturers could afford the cost of purchasing and supporting an ERP system. Manufacturers had to invest in not only the cost of software, but also hardware, IT staff, and typically some level of costly  customizations. Cloud ERP has brought down the price point to get into ERP, allowing smaller manufacturers to play with the big players. Ironically, many of the bigger manufacturers, that invested heavily in legacy ERP and customizations have been slow to upgrade their systems, even if they are old and outdated. Outdated technologies makes businesses less competitive, a whole other topic for discussion. What manufacturers on legacy systems may not realize is that as ERP solutions evolve and vendors continue to strive towards verticalizing their solutions, much of what required customization in the past has become a standard feature of modern ERP.

Getting Ready for Success with the Cloud

Like any technology investment, it’s only a good investment if it is accepted and correctly adopted. Cloud technologies are a business investment that should not be rushed into. Taking the time to do it right leads to project success. A few tips to get you headed in the right direction:

  • Don’t jump into a cloud solution without proper planning
  • Hire a technology expert to help with the process.
  • Understand your goals for the cloud
  • Understand your overall business goals, both short-term and long-term
  • Understand the cloud technologies and the skills necessary for the cloud
  • Understand the initial and long-term costs of the cloud
  • Understand cloud security

2W Tech has been helping manufacturers with their technology investments for over 30 years, we’ve grown up and continued to adapt with the high-tech ERP industry; we get it! Not all ERP solutions are a good fit for all manufactures. Discrete and process manufactures have different needs, so 2W Tech therefore offers ERP for discrete manufacturing and ERP for process manufacturing.

Have questions or want to learn more about our solutions? Contact 2W Tech today.

Back to IT News