Manufacturers’ Path to the Cloud: Where Do They Stand?

To cloud or not to cloud? For manufacturers considering integrating new technology, the cloud is an attractive option, particularly for greater security and visibility.

Giving up control of local or on-premises data storage and cybersecurity updates was historically hard for any Chief Technology Officer, especially for manufacturers with little room for downtime or added risk.

In 2024, though, attitudes toward the cloud have changed; nearly half of manufacturers in a recent Sikich-Manufacturing Dive survey view cloud technology as a basic, essential requirement for doing business rather than an optional or advanced feature.

Sikich recently partnered with Manufacturing Dive to survey top executives in the manufacturing industry. They found that half assume cloud adoption is just a part of doing business today.

Why Are Manufacturers Drawn to the Cloud?

This year’s Sikich survey shows many manufacturers are considering adopting or upgrading their enterprise resource management (ERP), customer relationship management (CRM), or demand management systems (DMS).

The Sikich survey shows nearly half want to leverage the cloud to “expand their current ERP footprint.” These platforms can supply a broader view of real-time data across an organization—something manufacturers say they lack. Thirty-seven percent of participants are considering a transition from on-premises to a software as a service (SaaS) model.

Significantly, 51% of survey participants stated the attraction of adopting cloud tools stems from the difficulties inherent in managing onsite servers due to the complexity and resource intensity involved. Onsite servers require constant maintenance, updates, and monitoring to function optimally.

Manufacturers must allocate skilled IT personnel to handle these tasks, which can divert attention and resources from core production activities. The need for physical space, cooling, and power supply adds another layer of complexity, increasing operational costs.

As manufacturing processes become more digitized and data-intensive, the demand on servers grows, leading to potential bottlenecks if the infrastructure is not regularly upgraded or scaled, which can be time-consuming and costly.

Onsite servers pose a substantial data security and disaster recovery risk. Manufacturing environments are often targets for cyberattacks, and maintaining robust security measures on onsite servers is challenging and requires constant vigilance.

During a hardware failure or natural disaster, restoring data and operations can be slow and complicated without proper backup and disaster recovery protocols. This downtime can significantly impact production schedules and lead to substantial financial losses.

These challenges have driven many manufacturers to explore cloud-based solutions, which offer greater scalability, security, and ease of management.

Why Are Manufacturers Going Cloud?

The benefits of cloud computing remain:

• Lowered cost
• Improved scalability
• Convenience
• Increased cybersecurity

The survey still showed that a little less than half of manufacturers worry about the risks related to data security. That’s a primary reason they are considering the cloud.

Are these fears overblown? According to Industry Week, the answer is likely that the number should be even higher. Earlier this year, the publication reported on an IBM study showing manufacturers accounted for one-quarter of all cybersecurity attacks, making the industry number one in cyber-attacks for the third year in a row.

Mike Sanders, Director of IT at Mid-Continent Instruments and Avionics, said, “I was glad to see that ERP migration to the cloud was primarily motivated by the enhanced security coverage it offers. Security is a paramount consideration for IT leaders, and hosting our ERP in the Microsoft cloud provides both myself and our organization with a sense of reassurance.”

Better Cloud Migrations Start with Sikich

With a proven track record of successful cloud transitions, Sikich combines technical proficiency with a strategic approach, ensuring that each migration is a technical upgrade and a step toward achieving broader business goals. Post-migration, Sikich doesn’t just walk away; we provide ongoing monitoring, optimization, and support to ensure that the new cloud environment evolves alongside your manufacturing business.

Our dedication to long-term success sets Sikich apart, enabling manufacturers to fully leverage the power of the cloud to drive innovation, reduce costs, and stay competitive in an increasingly digital world. By partnering with Sikich, manufacturers gain more than just a cloud solution—they gain a trusted ally in their journey toward digital transformation. Contact us to find out more.