Cloud-based computing facilitates the agility companies require in today’s fast-paced business environment. As cloud software technology matures, companies are moving toward putting their core systems on the web including their enterprise resource planning (ERP) software. In fact, more than half of US companies now use some form of cloud technology and many more are making plans to move additional systems to the web.
Companies that have installed ERP software have already realized the benefits of sharing data across functions, including standardizing processes, controlling costs and providing more data visibility. Traditional ERP solutions are often housed on a company’s own server infrastructure. However, the ERP software market is going through a revolution driven by the accessibility and scalability of cloud solutions. Cloud ERP systems provide the same benefits of traditional ERP and even more. Here is what you can expect:
Benefits of Using a Cloud ERP
With a cloud-based ERP model, upfront costs and on-going maintenance costs are reduced providing a faster Return on Investment (ROI). If you do not have an internal technology infrastructure or your own IT team to maintain your software, a cloud-based model offers a more cost-effective means to implementing an ERP. On-premise implementation projects are more likely to go over budget with unforeseen costs. When your ERP is hosted elsewhere, you greatly reduce the cost needed to keep your technology infrastructure current.
Faster Implementation and Upgrades
Because you do not need to purchase and install on-site technology, the cloud-based ERP installation can be executed more quickly with less disruption to your business. With the web-based model, you receive new features and functionality as they are available because you can automatically receive updates from your vendor. One study found that implementing web-based ERP, on average, took only seven months compared to eleven months for an on-premise solution.
More Flexibility, Scalability and Accessibility
A cloud ERP provides access from any device on any platform without expensive software or customization. This model is especially valuable when you have multiple locations that need access to real-time updates and reports. Cloud-based systems increase the ability to collaborate among a global workforce, enable more agile decisions and promote common organizational standards.
Enhanced Security and Backup
While security is a concern for any system connected to the Internet, your data can be even more secure when hosted by a provider who can provide the latest technology to secure facilities and networks. A capable hosting site will also include disaster recovery plans.
Concerns to Address with a Cloud ERP
There are valid concerns that need to be addressed when considering a move to the cloud. These three concerns are the primary reasons companies choose to keep their ERP system on-site. A robust cloud ERP solution can mitigate and eliminate these concerns in most cases.
The main reason most organizations cite for not moving to a cloud ERP is security. These companies are concerned with the safety of their sensitive data. This is a valid concern that should be addressed with your ERP vendor and hosting site. The key question to ask is whether your data will be more or less secure at the hosting location.
Lack of Control
Another motivation for choosing an on-premise model is that companies wish to control their software and the upgrade process. This is often due to concerns about the need to highly customize their ERP to address unique process requirements. This is a concern that you should address with your vendor as cloud-based software can be customized to meet specific needs.
Finally, companies are concerned about being reliant on a high-speed Internet and an external hosting site for system uptime. However, data show that externally-hosted sites are, on average, more reliable than internal systems.
For more information on using a cloud ERP in the manufacturing industry, read this blog, 4 Key Ways Cloud ERP Drills into Manufacturing.
If you want to achieve maximum productivity, growth and profits for your business in today’s environment, contact us to learn more about the best technology solution for your company’s specific needs.