Economic Forecast: The cloud and system integration landscape

Rick Sommer

The major overall trends I see with software solutions for small- and medium-sized businesses (SMB) are centered on information.

As in the past, technology change is always an opportunity and challenge for any business. From early computers to the Internet to bringing your own device to work (BYOD), business has been changed and will continue to be, as technology
and our acceptance of it evolves.

The first trend is that SMBs will continue to move their enterprise resource planning (ERP) or financial accounting systems to the cloud.

Cloud can mean many different things, based on the scenario and situation. In my opinion, a true cloud solution is provided directly by the software developer, hosted in their professionally managed, secure data center, seamlessly updated for frequent new versions and purchased on a flexible subscription-licensing model.

There has always been a reluctance to move critical accounting functions out of the company-controlled data center. The perception was that their data was more secure because they could control it. There has been a transformational shift in this thinking. SMBs are now seeing that moving their ERP systems to a cloud solution is more secure, dependable and economical.

The comments I hear directly from CFOs are that, in order to exercise proper due diligence of the financial and informational assets of the company, the cloud
is the way to go. As I work with SMBs moving to new ERP/accounting systems,
I see this direction accelerating exponentially.

The next trend is that SMBs will integrate their financial and operational systems together. This concept is sometimes referred to as the “best-of-breed” solution.

In the past, with traditional on-premises purchased software, SMBs generally had two options. The first was to purchase an industry-specific package that tried to meet all of the operational and financial needs of the company. The challenge with this model was that, while trying to do it all, they sometimes did not do everything as well as they should. In addition, because the software was designed for unique needs and a smaller potential customer base, it was costly
and traditionally slow to update and add new functionality.

The other option was to purchase specific, separate solutions for each functional area. While this usually met the functional requirements, custom code was needed to aggregate the data of these disparate systems together. Maintaining this custom integration was a challenge as the software programs were updated.

Cloud ERP solutions help with the best-of-breed approach because they are generally designed with newer underlying technology that facilitates interaction with separate software programs. The result is that each functional area can get the best solution for its individual needs, and the data can be more easily integrated together, using standard tools to eliminate silos of information.

The last trend is related to dashboards. SMBs are implementing solutions that highlight key metrics and performance indicators that quickly show each role in the organization how their area of responsibility is doing. This allows that person to take timely corrective action, as required.

My prediction for 2015 is that it will be a breakout year for overall cloud adoption by SMBs. Moving business functions like Microsoft Office to an online solution like Office 365 will continue to accelerate. Being able to access business information from anywhere on any device is becoming not only accepted but also expected.

The cost and complexity to maintain in-house computer systems justifies moving to the cloud. SMBs need to embrace this transformation trend and access to information to stay competitive. I see 2015 as the year when SMBs make it happen with cloud solutions.

(Rick Sommer is president of Intellitic Solutions, and President of Technology Forum of Delaware)

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