{"id":6491,"date":"2018-04-06T11:50:41","date_gmt":"2018-04-06T18:50:41","guid":{"rendered":"https:\/\/blog-prod.qad.com\/blog\/?p=6491"},"modified":"2022-08-03T10:34:48","modified_gmt":"2022-08-03T17:34:48","slug":"manufacturing-increasingly-moving-business-critical-applications-cloud","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2018\/04\/manufacturing-increasingly-moving-business-critical-applications-cloud","title":{"rendered":"Why the Manufacturing Sector is Increasingly Moving Business-Critical Applications to the Cloud"},"content":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;6493&#8243; img_size=&#8221;full&#8221;][vc_column_text]<span style=\"font-weight: 400;\">If you&#8217;re in manufacturing and responsible for your organization&#8217;s computing infrastructure, you may have been asked to provide <\/span><b>three pillars of business value<\/b><span style=\"font-weight: 400;\"> to satisfy a variety of very active stakeholders:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Your <\/span><i><span style=\"font-weight: 400;\">users<\/span><\/i><span style=\"font-weight: 400;\"> expect <\/span><b>availability<\/b><span style=\"font-weight: 400;\"> and high <\/span><b>performance<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Your <\/span><i><span style=\"font-weight: 400;\">operations<\/span><\/i> <i><span style=\"font-weight: 400;\">teams<\/span><\/i><span style=\"font-weight: 400;\"> need greater <\/span><b>flexibility<\/b><span style=\"font-weight: 400;\"> and <\/span><b>efficiency<\/b><span style=\"font-weight: 400;\"> and lower total <\/span><b>cost<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><i><span style=\"font-weight: 400;\">Everyone<\/span><\/i><span style=\"font-weight: 400;\"> in your organization expects you to address the <\/span><b>risks<\/b><span style=\"font-weight: 400;\"> of security, privacy and regulatory compliance. At a minimum, this includes the risks to the <\/span><i><span style=\"font-weight: 400;\">availability<\/span><\/i><span style=\"font-weight: 400;\"> of your business-critical systems, applications and data. In many cases, it also includes risks to <\/span><i><span style=\"font-weight: 400;\">confidentiality<\/span><\/i><span style=\"font-weight: 400;\"> and <\/span><i><span style=\"font-weight: 400;\">integrity<\/span><\/i><span style=\"font-weight: 400;\"> of your most sensitive data \u2013 including your intellectual property.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If this is true for you, you&#8217;re definitely not alone. When asked about the drivers behind current investments to improve their computing infrastructures, respondents to a recent <\/span><span style=\"font-weight: 400;\">Aberdeen research study<\/span><span style=\"font-weight: 400;\"> indicated that <\/span><i><span style=\"font-weight: 400;\">all three<\/span><\/i><span style=\"font-weight: 400;\"> of these areas are of similarly high importance.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Keeping up with all three of these at the same time is a pretty tall order, however, especially given the incredible complexity of today&#8217;s infrastructure, applications, data, user devices and the surrounding threat environment. How complex? In its analysis, Aberdeen found that more than <\/span><i><span style=\"font-weight: 400;\">17,000 manufacturing companies<\/span><\/i><span style=\"font-weight: 400;\"> in the US and Canada were running more than <\/span><i><span style=\"font-weight: 400;\">165,000 enterprise applications<\/span><\/i><span style=\"font-weight: 400;\"> installed from a total of <\/span><i><span style=\"font-weight: 400;\">60 selected vendors <\/span><\/i><span style=\"font-weight: 400;\">\u2013 with an overage of over <\/span><i><span style=\"font-weight: 400;\">10 operational sites<\/span><\/i><span style=\"font-weight: 400;\"> per company. <a href=\"https:\/\/www.qad.com\/what-is-erp\"><strong>Enterprise Resource Planning (<\/strong><\/a><\/span><strong>ERP)<\/strong><span style=\"font-weight: 400;\"> is by far the single biggest application category, accounting for <\/span><b>51%<\/b><span style=\"font-weight: 400;\"> of all installations in this market snapshot.<\/span><\/p>\n<h2>Cloud Deployment Trends<\/h2>\n<p><span style=\"font-weight: 400;\">With respect to how these applications are <\/span><i><span style=\"font-weight: 400;\">deployed<\/span><\/i><span style=\"font-weight: 400;\">, the pattern over the past few years has been that application workloads are first <\/span><i><span style=\"font-weight: 400;\">virtualized<\/span><\/i><span style=\"font-weight: 400;\"> and then <\/span><i><span style=\"font-weight: 400;\">executed<\/span><\/i><span style=\"font-weight: 400;\"> on the infrastructure that best addresses the organization&#8217;s requirements for performance \u2013 which is increasingly in the <a href=\"https:\/\/www.qad.com\/blog\/2021\/08\/what-is-cloud-erp\">cloud<\/a>. Reliability, cost, geographic location, trust level, security and compliance are key factors behind this decision.\u00a0In general, the research has consistently shown that the more business-critical the application, the more cautious the approach in terms of moving virtualized workloads from the enterprise-managed infrastructure (aka on-premise) to the infrastructure of cloud service providers. For example:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Enterprise application categories in the vanguard of moving predominantly to cloud providers include <\/span><i><span style=\"font-weight: 400;\">Web applications<\/span><\/i><span style=\"font-weight: 400;\">, <\/span><i><span style=\"font-weight: 400;\">CRM<\/span><\/i><span style=\"font-weight: 400;\">, <\/span><i><span style=\"font-weight: 400;\">enterprise email<\/span><\/i><span style=\"font-weight: 400;\"> and <\/span><i><span style=\"font-weight: 400;\">file sync\/share.<\/span><\/i><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Meanwhile, enterprise application categories that have remained more predominant on the enterprise-managed infrastructure include <\/span><i><span style=\"font-weight: 400;\">finance \/ accounting<\/span><\/i><span style=\"font-weight: 400;\">, and <\/span><a href=\"https:\/\/www.qad.com\/manufacturing-erp\"><em><span style=\"font-weight: 400;\">ERP for manufacturing<\/span><\/em><\/a><i><span style=\"font-weight: 400;\">.<\/span><\/i><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">But these trends are rapidly changing, and here&#8217;s why.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For the vast majority of organizations, simply rolling up your sleeves and allocating limited IT resources \u2013 in an attempt to integrate, optimize, and maintain the exponentially growing complexity of computing infrastructure and security \u2013 by themselves would not be considered strategic. <\/span><i><span style=\"font-weight: 400;\">Important<\/span><\/i><span style=\"font-weight: 400;\">, yes \u2013 but <\/span><i><span style=\"font-weight: 400;\">strategic<\/span><\/i><span style=\"font-weight: 400;\">, not so much. <\/span><strong>Leveraging your applications and data to serve your business and differentiate from your competitors<\/strong> is what&#8217;s strategic for manufacturing companies, not managing the underlying technology stack.<\/p>\n<h2>Merging Strategy with Security<\/h2>\n<p><span style=\"font-weight: 400;\">Concerns about data security, data privacy and regulatory compliance have traditionally given organizations pause about moving their business-critical applications from on-premise implementations to the cloud &#8211; but there&#8217;s growing evidence that <a href=\"https:\/\/www.qad.com\/cloud-erp\">cloud-based services<\/a> are actually more secure. In a service provider \/ enterprise subscriber relationship, each party is focusing its resources and expertise on <\/span><span style=\"font-weight: 400;\">doing what it does best<\/span><span style=\"font-weight: 400;\">:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Cloud providers<\/b><span style=\"font-weight: 400;\"> deliver the architecture, integration, optimization, security and operational aspects of the essential lower levels of the computing infrastructure stack at <\/span><i><span style=\"font-weight: 400;\">large scale. <\/span><\/i><span style=\"font-weight: 400;\">They can justify an investment in achieving, sustaining and certifying compliance with security and privacy requirements over a large subscriber base. Critical applications like <a href=\"https:\/\/www.qad.com\/blog\/2018\/11\/why-manufacturers-need-flexible-erp\/\">flexible ERP<\/a> (SaaS) are increasingly included in this mix.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Enterprise subscribers<\/b><span style=\"font-weight: 400;\"> focus their own resources on the most strategic aspects of the computing infrastructure stack: their own <\/span><i><span style=\"font-weight: 400;\">applications<\/span><\/i><span style=\"font-weight: 400;\"> and <\/span><i><span style=\"font-weight: 400;\">data<\/span><\/i><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Both parties<\/b><span style=\"font-weight: 400;\"> share responsibilities for security operations &#8211; and for most organizations, moving to cloud providers will likely drive net <\/span><i><span style=\"font-weight: 400;\">improvements<\/span><\/i><span style=\"font-weight: 400;\"> in data security, data privacy and regulatory compliance when compared to their existing practices for traditional IT or private clouds.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This is especially true for small and mid-size organizations (up to $500 million in revenue). It may be counter-intuitive, but Aberdeen&#8217;s research shows that <\/span><span style=\"font-weight: 400;\">SMBs actually have higher risk<\/span><span style=\"font-weight: 400;\">. At organizations of all sizes, there&#8217;s an ever-increasing demand for:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Keeping IT infrastructure properly configured, patched and up-to-date<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Achieving and sustaining compliance requirements for security and privacy<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Keeping up with the latest security threats and vulnerabilities landscapes<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Ensuring that IT infrastructure and sensitive data are well-protected<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Monitoring, detecting, investigating and responding to security incidents in a timely manner<\/span><\/li>\n<\/ul>\n<h2>Less Risk, More Reward<\/h2>\n<p><span style=\"font-weight: 400;\">Small and mid-size businesses often lack the <\/span><b>resources<\/b><span style=\"font-weight: 400;\"> (both in bandwidth of existing personnel and specialized technical expertise) and the tactical <\/span><b>focus<\/b><span style=\"font-weight: 400;\"> to perform well at these activities. This is because their primary, strategic focus is naturally on running and growing their business &#8211; not on security, compliance, privacy and risk. These factors combine to contribute to SMBs being an attractive target for attackers with a correspondingly higher likelihood of success.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In addition, SMB leaders often make false assumptions about risk, e.g., &#8220;data breaches won&#8217;t happen to us,&#8221; and &#8220;we don&#8217;t have anything of value that attackers would want.&#8221; In truth, however, small businesses may represent extremely high-value targets for attackers, as they represent a much easier beachhead and conduit for attackers to gain access to larger organizations in the supply chain. Sometimes businesses will experience data breaches after underestimating the resolve of attackers and so will not put anything in place to prevent this from happening. They will also then fail to report the incident to their customers, leaving it in the hands of whistleblowers in their employ to reveal the problem to the world.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For SMBs, Aberdeen&#8217;s analysis shows that the risk of a single data breach is significantly higher than it is for larger organizations &#8211; by about 63% across all industries. The manufacturing sector is near the top of this list:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><a target=\"_blank\" href=\"https:\/\/www.census.gov\/cgi-bin\/sssd\/naics\/naicsrch?chart_code=72&amp;search=2012%20NAICS%20Search\" rel=\"noopener\"><span style=\"font-weight: 400;\">Accommodation and Food Services<\/span><\/a><span style=\"font-weight: 400;\">: 354% higher<\/span><\/li>\n<li style=\"font-weight: 400;\"><a target=\"_blank\" href=\"https:\/\/www.census.gov\/cgi-bin\/sssd\/naics\/naicsrch?chart_code=31&amp;search=2012%20NAICS%20Search\" rel=\"noopener\"><span style=\"font-weight: 400;\">Manufacturing<\/span><\/a><span style=\"font-weight: 400;\">: 159% higher<\/span><\/li>\n<li style=\"font-weight: 400;\"><a target=\"_blank\" href=\"https:\/\/www.census.gov\/cgi-bin\/sssd\/naics\/naicsrch?chart_code=51&amp;search=2012%20NAICS%20Search\" rel=\"noopener\"><span style=\"font-weight: 400;\">Information Industries<\/span><\/a><span style=\"font-weight: 400;\">: 69% higher<\/span><\/li>\n<li style=\"font-weight: 400;\"><a target=\"_blank\" href=\"https:\/\/www.census.gov\/cgi-bin\/sssd\/naics\/naicsrch?chart_code=44&amp;search=2012%20NAICS%20Search\" rel=\"noopener\"><span style=\"font-weight: 400;\">Retail<\/span><\/a><span style=\"font-weight: 400;\">: 45% higher<\/span><\/li>\n<li style=\"font-weight: 400;\"><a target=\"_blank\" href=\"https:\/\/www.census.gov\/cgi-bin\/sssd\/naics\/naicsrch?chart_code=62&amp;search=2012%20NAICS%20Search\" rel=\"noopener\"><span style=\"font-weight: 400;\">Healthcare and Social Assistance<\/span><\/a><span style=\"font-weight: 400;\">: 6% higher<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Given all of the above, it&#8217;s not surprising that virtually all planned growth among SMBs is based on moving away from in-house implementations, in favor of using service providers and particularly cloud. It&#8217;s worth asking, &#8220;what am I waiting for?&#8221;<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><i><span style=\"font-weight: 400;\">For more information about cloud security for <a href=\"https:\/\/www.qad.com\/manufacturing-erp\">manufacturing and ERP<\/a>, read this <\/span><\/i><a href=\"https:\/\/go.qad.com\/NA-US-FY19-NUR-CiaB-CloudSecurity_07-WP-01BestPractices.html?utm_source=blog&amp;utm_medium=post&amp;utm_campaign=na-us-cloud&amp;utm_content=bp1-wp1\"><i><span style=\"font-weight: 400;\">recent white paper<\/span><\/i><\/a><i><span style=\"font-weight: 400;\">.<\/span><\/i>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;6493&#8243; img_size=&#8221;full&#8221;][vc_column_text]If you&#8217;re in manufacturing and responsible for your organization&#8217;s computing infrastructure, you may have been asked to provide three pillars of business value to satisfy a variety of very active stakeholders: Your users expect availability and high performance. Your operations teams need greater flexibility and efficiency and lower total cost. Everyone in your [&hellip;]<\/p>\n","protected":false},"author":59,"featured_media":6493,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[182,199],"tags":[441,211,305,292,438,439,440,24,307,442],"class_list":["post-6491","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-manufacturing-trends","tag-business-critical","tag-cloud","tag-cybersecurity","tag-data","tag-enterprise-applications","tag-enterprise-managed-infrastructure","tag-flexible-erp","tag-manufacturing","tag-security","tag-smb"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Why the Manufacturing Sector is Increasingly Moving... | QAD Blog<\/title>\n<meta name=\"description\" content=\"If you\u2019re in manufacturing and responsible for your organization\u2019s computing infrastructure, 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