Last week I attended Infor’s Innovation Summit in New York City, which showcased recent accomplishments, provided a general business update, and previewed upcoming product and technology initiatives. Over the course of two days I had the opportunity to sit in on multiple breakout sessions and a message that was relayed consistently was the fact that “No two clouds should be alike”. This refers to the idea that enterprise software must be industry specific as there are unique challenges each has to deal with.
This is of course true. Those within the Food & Beverage or Aerospace & Defense industries have unique compliance concerns to adhere to (ITAR, FSMA, etc.), while automotive or industrial equipment manufacturers have to deal with increasing product complexity and the constant need to reduce costs. That is why this focus on industry specific applications was very encouraging to hear. No matter the industry you operate in, what matters the most are the capabilities of the software that you use to run your business.
The question of how to deploy this software (like ERP), cloud versus on-premise is another animal. Manufacturers in particular, have been slow to accept ERP deployment options that are not the traditional on-premise model. While the adoption rate of cloud ERP has risen over the past few years, recent Aberdeen research shows that over 70% of manufacturers still have on-premise licensing. There are various reasons for this slower rate of adoption, but the top factor clearly continues to be security concerns (Figure 1).
Figure 1: Factors Preventing Adoption of ERP SaaS
For manufacturers, security has been a topic that has risen in prominence over the past decade or so. High profile industrial incidents like Stuxnet, DuQu, and Shamoon are still fresh in most manufacturers’ minds. While these were viruses targeted lower level PLCs and control systems, the lasting impact has made manufacturers wary of any conversations that involve data leaving the plant floor. Much like the answer for industrial security is a layered approach with the right procedural, organizational, and technological capabilities; the same is true for application security. The good news is that Infor had an entire section in their presentation focusing on this very aspect of their cloud solutions. This included application and infrastructure requirements, multiple layers of security testing, and third party compliance and certification. Cloud applications offer numerous benefits around TCO, scalability, and less effort to upgrade. This brings up an interesting question that will be answered in the near future, will all of these security efforts be enough to cause manufacturers to finally take the plunge and more actively adopt cloud solutions?