ERP in clouds or still below

Abstract

Purpose

The purpose of this paper is to investigate the market readiness to adopt the Cloud as the future ERP platform, by using the analytic hierarchy process (AHP) decision support methodology.

Design/methodology/approach

Interviewing is conducted on the convenient sample, of enterprises from various industries. The interview is conducted through expert telephone interview and self-administered questionnaire. Results are then used as a basis for forming the weight factors necessary for the AHP decision model. Data are analyzed and synthesized using AHP and Expert Choice.

Findings

Results demonstrate a huge interest for TCO reduction, but also a concern for data privacy and availability. Large enterprises want their data on local servers, while smaller companies tend to act as “first adopters”, mainly because of the cost benefits that Cloud offers. Finally, vendors see the hybrid solutions as the most suitable approach for the overall market, at least while current Cloud obstacles exist.

Research limitations/implications

This research does not aim to answer the question what is the best solution for a particular industry. Instead, it assumes the general approach, which answers the question what would in general be the adequate solution for the SME and how much are SMEs ready to adopt the ERP in the Cloud. A further research is necessary to validate these results in practice. That research should be industry specific, i.e. narrowed to one industry only. Then, it would be possible to answer the question what is the best solution for high-tech SMEs.

Practical implications

This paper summarizes Cloud pros and cons useful for decision makers to establish a starting point for IT reorganization. Additionally, AHP results provide some indications of the market's perception regarding Cloud and ERP, while vendors' statements about ERP-Cloud solutions provide an interesting glimpse of the ERP market in the next few years.

Originality/value

Market demands constant flexibility and cost effectiveness, forcing companies to adapt faster than ever. Therefore, there is a significant risk for first adopters and their business if they adopt an inadequate solution. This paper offers a high-level overview of the SME's market understanding and willingness to adopt ERP in the Cloud idea, and it demonstrates how the AHP decision support methodology can be used to assess the readiness of enterprises to adopt the Cloud-ERP solution.

Citation

Grubisic, I. (2014), "ERP in clouds or still below", Journal of Systems and Information Technology, Vol. 16 No. 1, pp. 62-76. https://doi.org/10.1108/JSIT-05-2013-0016