In today's private sector, cloud-based enterprise resource planning (ERP) has swiftly become an essential part of business infrastructure. As businesses compete in the online marketplace, various processes that were once separate — accounting, warehouses, databases, documents, spreadsheets — can now be streamlined on a common interface for instantaneous, across-the-board access by authorized personnel.
While most companies find it valuable to streamline business processes, few have taken action on the matter. According to a study by the Institute of Finance and Management, a mere third of AP departments have implemented automation, while only an eighth have embraced cloud technology.
Cloud-based ERP is an enterprise resource planning solution that is offered to businesses for subscription by cloud vendors. On a remote cloud server, the features of ERP software are accessible from any Internet-connected device.
So why cloud ERP? In a world where business colleagues can collaborate on documents and enter data from any location, ERP is most efficient when it's accessible via the cloud. The remoteness of the cloud also makes an ERP system easier to use because there is no onsite, laborious upkeep required. Moreover, businesses save money with cloud ERP solutions because it doesn't require any expensive hardware to access and use a vendor-run, cloud-based system.
Since 2013, cloud-based ERP has gained on traditional, on-premise ERP as the preferred solution for businesses. Cloud requires as little as one-sixth of the ERP operating expenditures an online solution would otherwise consume.
Some companies opt to run on-premise ERP, which requires a large capital investment to license for perpetual use. Once they have licensed it, company personnel must then roll out the solution, which can take several years to fully implement in a large-scale company. Furthermore, the technical requirements for an on-premise ERP system can add up quickly.
Fully implementing on-premise ERP might require a company to update its computer arsenal for system compatibility. As time goes on, they may also need to invest additional money in hardware maintenance, parts replacement and software upgrades, some of which can lead to new compatibility issues. Essentially, on-premise ERP requires highly skilled IT staff to operate.
Basically, when you don't have ERP in the cloud, you are likely to encounter equal measures of benefits and challenges. By contrast, the benefits of cloud ERP system solutions far outweigh any drawbacks. Aside from the fact that you have to pay a monthly subscription for cloud-based ERP — which can add up over many years and ultimately surpass the much larger upfront licensing fees of on-premise ERP — there really are no drawbacks.
Cloud-based ERP benefits range from reduced overhead and streamlined processes to easier accessibility and mobility. While the vendor maintains the server itself, a third party provides 24/7 system support. Since everything runs on a remote cloud server, you do not have to invest in a large computer network to reap the benefits of ERP. In fact,
With cloud ERP, you can free up onsite space and resources that might otherwise leave you with a sprawling and costly setup. Since the system is fully on the cloud, it frees up your in-house computational work for other matters. For smaller businesses, this can make operations a whole lot more affordable because you don't have to earmark part of your budget for a standalone ERP infrastructure.
Traditional onsite ERP necessitates manual upkeep and periodic hardware updates, all of which can impact a company's budget. Cloud ERP, by contrast, is a relatively low-cost operation. With a minimal startup fee, you could have an ERP cloud system fully implemented for your business in good time.
The subscription costs for cloud ERP are reasonable and are generally tailored to work around the budgeting flow of small and medium-sized business. With cloud ERP, you won't need to make huge investments in an overhaul of your hardware or software.
One of the greatest benefits of cloud ERP is the superior security it offers businesses of all types and sizes. When it comes to the storage and retrieval of classified company data, it is crucial operations remain foolproof at all times. With cloud ERP, you never have to worry about data getting hacked by a third party, because the system tracks all activity and fully encrypts your data.
Cloud ERP provides real-time analytics that allow companies to see vital information as it becomes available. As numbers change and dollars fluctuate, this information is readily available as you make important decisions in the course of business. For companies in the realm of manufacturing, cloud ERP facilitates process optimization by providing analytics in real time.
Beta-testing application programming interfaces (API) is easier to do over a cloud platform. Likewise, cloud ERP also makes it easier to perform user acceptance testing (UAT). When tested over the cloud, companies can see the types of issues that are liable to emerge with a product within a working environment. Unlike traditional testing settings, which only yield speculative conclusions, cloud ERP offers accurate UAT and API beta test results.
If team members are spread across the country, you can all input data in real time from any connectible device, be it a PC, laptop, smartphone or tablet. As long as everyone has an Internet or Wi-Fi connection, co-workers can collaborate across great distances and time zones.
The centralized nature of cloud ERP also ensures data interfaces display uniformly across all devices. Moreover, business intelligence tools work more easily with cloud ERP.
In a traditional, onsite infrastructure, scaling can be a costly and complicated aspect of business. On the one hand, you might scale too slowly for the growth and scope of your business and wind up with a cramped infrastructure. Alternately, you might scale too fast and overspend on extraneous equipment that costs huge amounts of money up front and also leads to costly maintenance down the line.
With cloud ERP, scaling becomes a breeze because you can adjust the whole infrastructure to the necessary size for each stage in your development as a company. For new and smaller businesses, cloud ERP makes it possible to skip the growing pains of scalability that have hampered many of today's veteran companies.
In terms of budgeting, one of the main benefits of cloud ERP is that there is no additional expense for network hardware. You pay for the service itself on a subscription basis. Therefore, your company will not have to invest in new hardware just to use features of the service. That makes operations a whole lot easier and more affordable to manage because cloud ERP allows companies to eliminate earmarks for hardware repairs and software upgrades.
Cloud-based ERP services are vendor-run. As such, support is available 24/7 for any service issues that might arise with cloud ERP. On-premise hosting, by contrast, typically requires the additional purchase of a support package. As a cloud-based ERP service subscriber, you can access the support you need around the clock in any time zone, including help with software upgrades.
With its low startup cost and reasonable subscription fees, cloud-based ERP is a highly accessible solution for startup businesses. Effectively, cloud ERP allows smaller companies to gain access to the same enterprise resource planning features of large corporations.
In many cases, cloud ERP makes it possible for newer companies to bypass the infrastructural buildup that has taken established companies years to amass. When everything is in the cloud, it eliminates the need for an in-house IT department or hardware base. Effectively, this sets a low entrance barrier for startups seeking to compete in today's business sector.
Thanks to the remote nature of cloud-based ERP, a business can operate with no downtime. If a power outage occurs in your area, you can still access the cloud with a Wi-Fi connection to retrieve and enter data as normal. Even if a snowstorm prevents travel in your area and no one can get to company headquarters, all authorized personnel can connect to the cloud from the safety of their homes via PCs, laptops, tablets or smartphones.
In the cloud ERP vs. traditional ERP debate, the former has the advantage because cloud-based ERP services are run by vendors that specialize in enterprise resource planning. That is why cloud ERP operates virtually free of system downtime. In fact, subscribers of the leading cloud-based ERP vendors enjoy 99.98 percent uptime. Moreover, cloud-based vendors are constantly making updates to keep subscribers in the loop of service developments.
Once you have fully implemented a cloud-based ERP, your company productivity is bound to increase tenfold.
If a team member makes a discovery or has an idea while traveling, he or she can access the system from a mobile device and input the info. Likewise, if a team member is on vacation and suddenly remembers something vital, they can add it instantly from the most remote locale. Basically, cloud-based ERP allows authorized personnel to work and collaborate piecemeal on projects at any hour in the midst of any activity.
With the clutter-free and easily understandable interface of cloud ERP, you can more readily make crucial decisions for your business.
For example, if you are looking to pinpoint developing markets, cloud ERP makes it easy to examine customer behavior by demographic and locale across year-by-year, season-by-season flow charts and heat maps. Likewise, if you are trying to determine which products to move up or down the priority chain, you can instantly review similar charts and graphs — updated daily from on-the-ground sources.
With cloud-based ERP, information becomes streamlined and business processes grow more connected. As such, your company will enjoy optimized coordination among various branches, such as the customer database, the accounting department and the ordering warehouse. With the synchronized communication of these branches, order fulfillment becomes easier to manage.
Cloud ERP allows invoice managers to process several orders simultaneously. Likewise, your employees will be able to estimate delivery times with greater accuracy and ship more orders in a single day. As a result, customers enjoy superior service and order delivery from your company.
If you run an online retail store, accounting is liable to become difficult without enterprise resource planning. Cloud-based ERP makes it easier to monitor your accounts and keep information updated on an hourly basis. Moreover, cloud ERP allows you to generate invoices and process returns without the hassle of sorting files and managing paperwork. With cloud ERP, you can grow your store with ease and handle increases in order volumes free of stress.
Cloud-based ERP allows companies to trim overhead and make better use of the time you would otherwise spend on process coordination. Your business can boost its efficiency and complete tasks faster and more easily with cloud ERP.
In all the time you save with cloud-based ERP, you can devote hours to company improvement that could grow your business in ways you might never have imagined. For example, you could devote more attention to customer service and hold staff meetings to discuss ways to improve in this area. Likewise, your company could invest more time, energy and resources into areas like product development and online outreach.
For a smaller company, cloud-based ERP makes it possible to manage large bodies of data and streamline complex processes that would otherwise be disconnected from one another. Without ERP, information can sometimes fall between the cracks as tasks change hands among accountants, management personnel and inventory handlers. Online ERP integrates all the pertinent information on a remotely operated interface for superior efficiency and organization.
Thanks to the improved efficiency of processes afforded by solutions like cloud-based ERP, businesses that switch to such a system can expect to see a 30 to 40 percent increase in productivity in the coming years. For small startups, the boosted efficiency, reduced overhead and smaller, less cumbersome onsite equipment will allow for greater speed and mobility of processes. As such, these businesses will have the ability to grow more rapidly and break into the big league.