CEO of Asseco Solutions
Integration cost trap – the price per user is not everything
Gartner forecasts that "by 2018, at least 30% of service companies will transfer most of their ERP applications to the cloud"1. Gartner also anticipates that "by 2017 around 70% of companies that accept the hybrid ERP model [will] fail to improve the relationship between costs and revenue, unless their cloud applications offer competitive functionalities."2
Rüdiger Spies from analysts PAC believes that the development in the German-speaking countries is very similar. He estimates that within the next five years up to one-third of the ERP and adjacent systems will either be completely obtained from the cloud or implemented as a hybrid model. However, if you purchase and apply functionalities and technologies of various different origin, you need to learn how to deal with the resulting integration problems and the competences required for them. These costs - barely visible at first glance - could quickly eclipse the attractive price per user. The hybrid approach thus might guarantee flexibility and drive, but not necessarily lower overall costs. Spies therefore believes that a substantial number of the companies who will use the cloud solutions will be surprised about the hidden costs.
How much "hybrid" is good for SMEs?
"The crucial question is how hybrid the postmodern ERP of the future will ultimately be", points out Thorsten Reuper, Chief Technology Officer of Asseco Solutions. "Parallel megatrends such as Industry 4.0 will definitely mean that user companies will deal with technologies from more providers than previously and that these must be interconnected, partially via the cloud. But this cannot be the task of the customer alone. Rather, we as providers must ensure that we create an ecosystem for the customer that is as complete as possible. This system has two tasks: Flexibility, drive and user convenience on the one hand, and ready-made integrations on the other. Then SMEs can also benefit from the blessings of postmodern ERP.“
SMEs have it easier
Ten years ago, the visionary providers of ERP solutions in SMEs established new solutions that support all modern communication standards and protocols and whose only interface is the browser. An example of this is the completely web-based ERPIIsolution APplus, which is in the meantime in its sixth generation and for which the groundwork of the postmodern ERP era has already been laid.
"It is important to support our customers step by step into the hybrid world of postmodern ERP. However, the technical foundations are already laid in APplus", explains Thorsten Reuper. "This means that the current challenges in conjunction with Industry 4.0 are very easy to manage, both with regard to technical and cost aspects. In this context, I'm thinking of the connection of MES and sophisticated detailed planning systems. The exchange of machine data through the cloud is no longer a problem either. Meanwhile, Industry 4.0 presents not only technical, but also legal and security issues. This is one more reason for companies to, in future, sound out the market even more precisely than before and to choose a partner that can deliver answers on all levels."
Evolution at the Asseco stand at the IT & Business
"Our postmodern modernity" can be compared with a house. APplus is the ERP building and material of the future, the core of an ecosystem that includes partner and customer solutions and offers implementation options both locally and in the cloud. The experts from Asseco Solutions will demonstrate how the journey to this future and the era of Industry 4.0 could be specifically conceived at their IT & Business stand in Hall 4, No. D01.
1) Wolfgang Welsch, Our Postmodern Modernity, Weinheim: VCH Acta humaniora, 1987, Berlin: Publishers: Akademie Verlag, 72008
2) Cf. press release „Gartner Says By 2016, the Impact of Cloud and Emergence of Postmodern ERP Will Relegate Highly Customized ERP Systems to ‘Legacy’ Status”, January 29, 2014: „By 2018, at least 30 percent of service-centric companies will move the majority of their ERP applications to the cloud.”; http://www.gartner.com/newsroom/id/2658415, retrieved August 5, 2014, 11 a.m.
3) Cf. ibid., “By 2017, 70 percent of organizations adopting hybrid ERP will fail to improve cost-benefit outcomes unless their cloud applications provide differentiating functionality.”