Building Better Trust in Business with Cloud ERP Investments
Increased customer satisfaction and loyalty, employee retention, business resilience, and operational efficiency—at their core, they all rely on trust.
An organizational focus on trustworthiness signals to customers that the companies they partner with will handle their business with the competence, transparency, fidelity, and integrity they expect.
Although trust can seem abstract and subject to infinite interpretations, research by IDC shows that companies can build a robust trust strategy by focusing their efforts on stronger security; privacy; compliance; and environmental, social, and governance (ESG). A majority of respondents also expressed a preference for cloud enterprise resource planning (ERP) systems as part of that strategy.
Research highlights
Over 400 ERP customers were surveyed in Europe, North America, and Asia/Pacific. Respondents were selected if they met all four of the following criteria:
1. Respondent uses an ERP
2. Respondent has a role in ERP selection
3. Respondent is knowledgeable in one or more areas of trust
4. Respondent can identify their current ERP provider
Results of the survey highlighted some key areas:
- The operational and strategic advantages customers seek when they consider or decide to move to a cloud ERP
- The level of trust customers have in on-prem compared to cloud-based ERP systems
- The priorities of ERP customers in the areas of security, privacy, compliance, and ESG
- The greatest weaknesses perceived by ERP customers of their current vendor
According to the IDC research, trustworthy businesses feature a robust approach to risk management, security, compliance, privacy, and ESG.
The top reasons for moving to a cloud ERP system include better security, compliance, privacy, and risk posture (45%) and better alignment with company values/ESG initiatives (34%).
Source: IDC’s SAP Global Future of Trust & Security Survey, 2023
Furthermore, cloud-based ERP users report much greater trust in their systems when compared to on-prem ERP users, with 31% of cloud-based ERP users reporting 100% trust in their ERP provider, while only 22% of on-prem ERP users report the same.
Source: IDC’s SAP Global Future of Trust & Security Survey, 2023
Insights from IDC Research: Key Findings
Key findings from IDC's recent survey show that investments in cloud ERP systems have proven to enhance overall business ROI.
Investment in cloud ERP systems yields improved business ROI
Organizations prioritizing trust-building efforts with customers and staff have experienced increased efficiency, market value, and better retention rates for both customers and employees.
Over the last 12 months, respondents reported a 20% boost in customer satisfaction and a corresponding 19% rise in employee productivity. Operational efficiency, a primary business focus, also saw a 19% increase among those investing in ERP initiatives, with respondents reporting a 20% increase in innovation as a result.
Security matters
Security emerged as a critical concern for businesses transitioning to cloud ERP solutions, driven by the pursuit of improved privacy, security, and compliance postures.
The IDC research underscores the foundational role of security, privacy, and compliance in building trust. Cloud ERP users exhibited higher trust levels compared to their on-premise counterparts, with 45% of surveyed ERP customers either migrating or planning to migrate to cloud platforms.
Among security considerations, managing supply chain vulnerabilities took precedence, emphasizing the need for solutions addressing this complex task.
The dynamic technology landscape further highlights the flexibility and responsiveness provided by cloud ERP platforms, enabling organizations to adapt to evolving customer and regulatory needs.
Priorities in compliance and privacy management differ across regions. The IDC research reveals that in the Asia/Pacific region, respondents prioritize data loss prevention and information rights management as their top privacy concerns. Conversely, North American and European respondents prioritize monitoring, reporting, and transparency of privacy policies.
With leaders increasingly focusing on organizational trust as a key business priority, the IDC research highlights the pivotal role of trusted cloud ERP solutions in preserving business value by efficiently managing security, privacy, and compliance.
All survey findings are sourced from IDC in an InfoBrief sponsored by SAP: Trusted ERP Systems: Priority offerings in security, privacy, compliance, and ESG (IDC #US51001623, September 2023).
Find more information on security, compliance, privacy, and cloud service performance at the SAP Trust Center.