ERP landscape in transition as data security keeps some deployments on-premise

The days of massive, multi-year ERP deployments across the organization may be gone, but it doesn’t mean vendors have stopped offering enterprise-wide or on-premise options. What’s changed is the ability to run apps from the cloud, and more flexibility to take a modular approach with several different vendors.

San Mateo, Calif.-based NetSuite Inc. recently announced updates to OneWorld, which Craig Sullivan, the company’s senior vice-president of enterprise and international products, said is suitable for businesses of all sizes and models. Some of the new enhancements include configurable tax compliance, support for 20 languages and 190 currencies, and multi-subsidiary management.

And while many of its customers, including Fortune 100 companies, run NetSuite software across the entire organization, Sullivan said often customers start using its software for a specific line of business: “The head of finance isn’t going to wake up and think one system will be used for everything.”

It’s usually a single pain point that needs addressed before a customer spans OneWorld across the enterprise. “The ‘one throat to choke’ motivation is there,” he said. Often, customers come to NetSuite because they have tried other offerings that have failed to work across their business.

Sullivan said mergers, acquisitions and divestitures, including ones that cross jurisdictions, are influencing what organizations are deploying, and being able to customize a cloud-based offering such as OneWorld can get them up and running quickly and help them respond to disruption within their respective industries.

From a jurisdiction perspective, tax compliance is important, he said. NetSuite OneWorld’s global tax engine now supports more than 100 countries with indirect tax calculation and reporting capabilities, tax compliance, filing and audit accountability. Canada is NetSuite’s first international market after the United States, said Sullivan, and its mid-market customer base here operate in multiple provinces and in some cases have separate legal entities. “The ability to support auditing is a huge weight off the shoulders of finance directors around the world,” he said.

Utsav Arora, senior research analyst for enterprise applications at IDC Canada, said whether or not an organization has a more traditional on-premise ERP deployment really depends of the type of company. “It’s hard to generalize across the board,” he said. “For large enterprises, it’s still present.”

However, many software deployments are increasingly being driven by specific lines of business within an enterprise, said Arora, such as human resources, finance and marketing. “They tend to go with specific solutions that address their particular problem.”

Large enterprises are still opting for comprehensive, multi-faceted ERP, but they are not necessarily putting all of the eggs in one basket, and often have different solutions in different departments, said Arora, while the big vendors such as Oracle, SAP and Microsoft are selling by the module. Diversity of the technology stack and vendors mitigates risk, and up to a certain point doesn’t complicate things, he said; each ERP vendor has its own unique value proposition.

Small and mid-size organizations often go with a mix of vendors to tackle different needs. “Small vendors play a very important role,” said Arora. FreshBooks is a perfect example, he said, having gained a lot of traction by focusing on finance and accounting.

The cloud has definitely played a positive role in how organizations deploy ERP, but Arora noted that in the Canadian market there are still some segments that still prefer on-premise deployment, such as the public and financial sectors, which remain the biggest buyers in Canada, due in large part to data sovereignty and data concerns, while smaller organizations are more comfortable taking the Software-as-a-Service (SaaS) route. He said Microsoft’s announcement that it would establish two data centres in Canada will help those enterprises concerned about data sovereignty to migrate from on-premise ERP to the cloud. (Oracle recently announced a new data centre in Canada to support its Human Capital Management Cloud, Enterprise Resource Planning Cloud and Customer Experience Cloud).

Arora said lines of business will continue to influencing spending on software, with human capital management, including HR analytics to understand talent acquisition and retention, being “one of the hottest areas of ERP.”

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Gary Hilson
Gary Hilson
Gary Hilson is a Toronto-based freelance writer who has written thousands of words for print and pixel in publications across North America. His areas of interest and expertise include software, enterprise and networking technology, memory systems, green energy, sustainable transportation, and research and education. His articles have been published by EE Times, SolarEnergy.Net, Network Computing, InformationWeek, Computing Canada, Computer Dealer News, Toronto Business Times and the Ottawa Citizen, among others.

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