There are hundreds of ERP systems in the market today, from Tier 1 Enterprise systems all the way to smaller, niche systems. And while it’s not easy deciding which ERP is right for your company, a first important step is deciding between an on-premise, cloud or hybrid ERP strategy.
Undoubtedly, there are pros and cons to each approach, but we believe, all-in-all, the benefits of a cloud-based ERP system outweigh the cons.
Below we dive into the 6 benefits that have made the IT-as-a-Service model a very attractive offering.
1. Less required resources = a decrease in operational costs
An in-house ERP system requires hardware and human resources to maintain it. Put this together with licenses and the upfront purchase of the ERP software and it is likely that your IT budget has increased significantly. The main benefit of a cloud-based software is that you don’t have any additional capital outlay for networking hardware. And since you are buying a subscription from your provider, you don’t need to buy new servers to house the application nor do you need to hire people to install, troubleshoot and manage your hardware and software solution. This is all covered in your licensing costs.
2. Security Enhancements
The data going through your ERP system is confidential and needs to be protected. A cloud-based ERP solution provides a more secure environment in most cases. The truth is with the amount of investments companies like Microsoft invest into their cloud, it’s unrealistic that any company can match this expenditure of over $1 billion in cybersecurity and research and development. Through the cloud, information is adequately encrypted and protected, while user access allows activity tracking giving you some control when it comes to user accountability. While you still have to take a hand in making sure that your data is safe, reputable cloud ERP vendors act as your partner when it comes to security measures.
3. Real-time Analytics and Business Intelligence
Today, real-time data and business intelligence is essential to stay ahead of your competition and keep up with your customers’ needs. Cloud ERP systems comprise of API links to the platform to allow customers to scale reporting and analytics needs accordingly. Additionally, instantaneous access through the cloud makes valuable information accessible and key decisions can be made immediately.
4. Agility and Scalability
A huge benefit that early cloud adopters have quickly realized is that through a cloud-based ERP system, they can simply scale up or add features as they grow without increasing license costs. If you are going through a period of rapid growth, it’s very simple to just increase the number of licenses. The reverse is also true as well: if your organization is seasonal, then reducing your license requirements is just as quick and easy – and you always pay for only what you use.
5. Greater Availability
A cloud-based ERP solution gives you the ability to access your system anywhere at any time. This means you can provide access to your team in remote offices or to someone who is at home or away at a conference.
6. Round-the-clock Support
Your cloud partner maintains ownership of the software and hardware, and this often means 24/7 support for their customers. Unlike on-premise hosting, which sometimes requires purchasing support packages, cloud vendors generally offer this as well as software upgrades.
In the end, choosing the right ERP solution takes a lot of serious thought. A cloud-based ERP solution is not a fit for all organizations. An on-premise solution could be the only way to go for some businesses. But if you are or will grow very fast and want to control your costs if you are able to see all the benefits of not managing your own data centers and ERP software, then opting for a cloud-based solution makes perfect sense.
Interested in learning more? Here are 6 tips for a Successful ERP Implementation.