While around half of manufacturers already rely on cloud ERP to some extent, the forecasts suggest that many more will move to the cloud in coming years.

Demand for cloud ERP is set to explode. Market research suggests that spending on cloud ERP will grow from $87.7 billion in 2024 to $172.7 billion in 2029—nearly double in the span of just five years.

Manufacturers are the biggest users of ERP overall and cloud ERP in particular. And while around half of manufacturers already rely on cloud ERP to some extent, the forecasts suggest that many more will move to the cloud in coming years. By 2030, cloud ERP will look like the best and only option to most manufacturers.

What’s driving this massive migration?

Some of it has to do with the limitations and liabilities that come with on-premises ERP. The rest can be attributed to the abilities and advantages unique to cloud ERP. In both cases, manufacturers need to understand the case for adopting cloud ERP and the consequences of avoiding it, because having the right ERP will be essential to the future of manufacturing.

The Declining Utility of On-Premises ERP

For modern manufacturers with an eye toward tomorrow, on-premises ERP looks increasingly misaligned with their priorities. Legacy solutions come with inflated maintenance costs, growing technical debt, infrequent updates, and fragile deployments. They’re getting less dependable as ERP grows more important.

Even when it works perfectly, however, on-premises ERP is difficult to scale for multi-site operations and change as requirements evolve. Data visibility can be slow, incomplete, and untrustworthy, leaving decision-makers without key insights. And with poor IoT integration and minimal options for AI-driven analytics, yesterday’s ERP keeps manufacturers stuck in the past.

As on-premises solutions become less viable, many manufacturers are exploring ERP modernization and deciding they need to be in the cloud instead.

Why Cloud ERP Makes More Sense for More Manufacturers

In addition to being a technical upgrade over on-premises ERP, cloud solutions help to facilitate digital transformation and unleash smart manufacturing. In that way, cloud migration transforms the entire business, not just the foundation of the tech stack.

Since cloud ERP is accessible from any device with an internet connection, it’s possible to collect, integrate, and access data in real-time. Automatic updates and predictable pricing lower IT overhead. Critical technologies like AI, IoT, and predictive analytics are also easier to integrate with a dynamic cloud solution than a legacy ERP.

Once the capabilities are in place, manufacturers start to see significant business benefits:

  • Agility & Scalability: In an always-evolving industry like manufacturing, cloud ERP can adapt quickly and scale effortlessly to keep manufacturers relevant.
  • Cost Efficiency: Cloud ERP leads to significant savings on infrastructure and maintenance that manufacturers can reinvest elsewhere to expand their digital toolkit.
  • Innovation: With the help of artificial intelligence and advanced analytics, opportunities to innovate all aspects of production begin to emerge on a consistent basis.
  • Connectivity: Success in manufacturing depends on keeping everything coordinated, and cloud ERP offers a centralized hub accessible to stakeholders around the world.

How to Migrate to Cloud ERP

Compelling as cloud ERP may be, replacing a critical technology takes planning, preparation, and best practices. It also takes an acute understanding of what’s wrong with the current solution, both for current and future requirements, along with a strong alignment between the replacement solution and the business strategy.

With expertise in both the business and technology of manufacturing, along with extensive experience orchestrating cloud migrations, Guide Technologies knows what lies ahead. Our team can help to assess current capabilities, assess different cloud ERP options, and lead the implementation process from beginning to end.

Modernizing ERP doesn’t have to be difficult or risky with the right partner. Find the best path forward—Contact Guide Technologies.