Enterprises that think they can escape the clutches of vendor lock-in by shunting their Enterprise Resource Planning (ERP) operations to the cloud are in for a very rude awakening, according to Gartner Inc.

The research house has just landed a sucker punch with the claim that almost all cloud ERP projects are doomed to fail by 2018, just two years from now. It says that 90 percent of enterprises that roll out what it calls a “post-modern EPR” will end up suffering exactly the same problems of greater complexity, failed integration and higher costs that are so often associated with traditional ERP projects.

According to Gartner’s definition, “post-modern ERP” systems are those which are federated and loosely coupled, and no longer provided by a single provider like Oracle or SAP SE.

The number one reason why Gartner predicts such doom and gloom is a total lack of an application integration strategy and the skills needed to create one.

“This new environment promises more business agility, but only if the increased complexity is recognised and addressed,” said Carol Hardcastle, Gartner research vice president. “Twenty five or more years after ERP solutions entered the applications market, many ERP projects are still compromised in time, cost and more insidiously in business outcomes.”

One of the key mistakes made by companies moving from on-premises to the cloud is they mistakenly assume cloud vendors will take care of application integration. But Gartner says most cloud vendors won’t do this, and it often comes as a shock to unprepared customers.

Gartner blames pressure from the upper echelons of company management for these problems.

“Organizations need to resist the temptation to succumb to pressure from business leaders to get started before it is really ready – and without a business-agreed ERP strategy. Business leaders must understand what it will take to ensure success,” Hardcastle explained.

The analyst firm also singled out vendors for putting their own interests ahead of those of their customers.

“The blame for this, however, does not lie solely with end-user organizations that lack the experience and expertise to avoid many of the pitfalls,” Hardcastle continued. “System integrators and ERP vendors have to be accountable to their customers in this respect.”

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