In a blog post earlier this year, we explored the nuances and complexities of implementing an Enterprise Resource Planning (ERP) system in the workspace. While we attempted to dispel some of the inhibitions one would have against an ERP implementation, there is no denying that some of the concerns are very valid especially from the view point of SMEs. While setting up an ERP system in the workspace, the sheer capital expenditure is a major point of contention. Further, traditional ERP systems can sometimes be relatively rigid to manage and to process dynamic business practices that a company would seek to adopt. Because certain on-premise ERP systems cost a fortune, it is understandable why many would have reservations against investing in such technology.
However, this does not mean you have to forego the many benefits of implementing an ERP due to the initial expenses involved. Cloud based ERP systems have been proven to be the best suited to keep up with evolving technology and dynamic business practices. They have become the preferred deployment option for companies of all sizes and cloud is the most conducive environment for innovation. Let us explore the top five reasons why leading businesses opt for the implementation of cloud-based ERP systems.
1. No Capital Expenditure
Cloud based ERP systems enable businesses to minimize upfront, software and hardware investments. Software licenses are paid for on a per user basis and the most significant minimization in expenditure is the sheer absence of the infrastructure cost. There is little to no hardware investment and even a small company can gain access to sophisticated software systems without investing in as much as a Server. There is also a resultant saving in operational expenditure on hardware maintenance and support which is ongoing.
With the world hurtling towards an increasingly digital age, there is a need for companies to be able to adapt to changing business practices and understanding disruptive business processes. Cloud based ERP systems provide a flexibility that allows businesses to implement enhancements and changes in business practices across the full breadth of the business itself.
Furthermore with Cloud pricing, upgrades can be significantly cheaper for cloud-based ERP systems. Vendors like RheinBrücke can update cloud software seamlessly resulting in an easier transition to the upgraded version. Cloud ERP systems are sensitive for the seasonal nature of certain organizations and allow for user licenses to be scaled up or down depending on the demand. This can greatly reduce the overall cost of the software licenses due to forced purchase bulk licenses for the maximum number of potential users.
3. Increases Mobility
Cloud based ERP systems are designed to empower businesses to integrate across the entire value chain, thereby connecting customers to vendors across the board. Cloud ERP allows the many stakeholders in the organization, even logistics and shop floor personnel to access information and stay up-to-date with their respective operations. This allows businesses to internally collaborate better, make more informed, confident decisions and greatly improve their efficiency. Data consistency is thus, extremely crucial for companies that have global workforces. With access to the cloud possible from anywhere (subject to company security policies), Cloud based ERP systems are thus, the most suited for increasing a company’s mobility, allowing it to increase its scalability as well.
4. Improves Collaboration Within Workforce
Since cloud-based ERP systems are web-oriented and easily accessible, there is a significant increase in interdepartmental integration and this enhances data accuracy. For leading businesses that employ workforces across the globe and value innovation, cloud-based ERP systems allow personnel to collaborate more effectively on a real-time basis. By providing easy access to operational data and connecting people quickly, Cloud ERP enables an organizations workforce to proactively solve business problems together.
5. Environmentally Friendly
In a day and age where the sensitivity regarding your carbon footprint is paramount, successful businesses have a responsibility to ensure that their business practices do not come at a cost to the environment. ERP on the cloud has been proven to be one of the most environmentally responsible IT solutions. The absence of an onsite ERP system infrastructure, means that there is a reduction in the power required to cool and maintain large servers. Cloud based ERP systems can host thousands of users on shared infrastructure and can thus utilize servers more efficiently using lesser energy, besides reducing the carbon footprint of underutilized redundant infrastructure that you would need to deploy to ensure that an on-premise ERP is fail-safe.
The on premise vs cloud ERP decision is a challenging one. The best choice for you will depend on your organization’s structure and business strategy. While there are many compelling reasons to implement cloud ERP, you must ask yourself if your business is ready for ERP on the Cloud. Calculating the ROI on an ERP implementation is vital to measuring the payback potential of an ERP as well as to ensuring a successful ERP project.
Are you ready to find out if implementing a cloud-based ERP solution is the right next move for your business? Click here for more information or leave a comment with your question and we will get back to you with a helpful suggestion.