IFS Cloud Upgrade Series – Why is it Worth Upgrading? (part 1)

Lukasz Majer (LM): Why now is the right time to consider a cloud upgrade for the ERP systems? Could you quickly describe the situation in the market? Are all the major ERP vendors already in the cloud?

Lars Steen (LS): If you take a tour through the websites of major ERP players today, you will see “cloud” mentioned all over. Cloud is the primary message for everyone. This trend started more than 10 years ago with solutions like Salesforce and NetSuite, which were built natively for the cloud. Now, all the major players—SAP, Infor, IFS, Microsoft—are producing cloud solutions. There are various reasons for this, including different business models and agreements, but the general direction is clear: cloud is the future.

One reason for this is that shifting to the cloud is more cost-efficient for vendors, allowing them to focus their development resources on fewer releases.

However, a major driver is the shift in business models. The cloud enables vendors to offer subscription-based models, moving away from the old perpetual license models. This transition stabilizes the company, providing a reliable revenue stream and allowing for better future planning and investment.

Additionally, the move to fewer releases means vendors only need to maintain one version of the software, significantly reducing the complexity and cost of supporting multiple versions simultaneously. Long-term, a single-version strategy is the future of ERP in the cloud.

LM: We’ve discussed the benefits from the ERP vendor perspective. How about from the customer’s point of view?

LS: There are several benefits from the customer perspective as well. The big conceptual change is moving from updating your solution every five or seven years to an evergreen state where you are always close to the latest software, technology, and releases. This means taking small steps every year instead of making a big leap every five years—a more gradual approach to improvement.

Other benefits for the customer include eliminating the need for costly hardware and the staff to maintain it. You can outsource this to your vendor or SaaS operator, who are experts in this area.

Scalability is also a significant talking point for moving to the cloud. It offers customers the ability to scale up easily, and in some cases, scale down, although this can be more challenging in terms of licenses and number of seats. Additionally, security is a major benefit. A few years ago, there was skepticism about cloud security, but now it’s clear that professional hosting partners provide better security setups than most businesses can manage on their own.

And finally, even though sometimes AI is considered a buzzword, with generative AI, we see real implementation areas emerging. AI can significantly improve daily activities and will become a solid part of ERP system capabilities. Sticking with an old version, like IFS 7, would prevent you from benefiting from these advancements. The evergreen concept is crucial now because we are at the start of a significant AI revolution, and staying up to date with your ERP system is essential.