5 Business Benefits of Cloud Based ERP

Atul Sareen, MD, Infor, India

The emergence of mobility, cloud and analytics is revolutionizing the way business is conducted. Even the age old Enterprise Resource Planning (ERP), which was chained to desktops earlier has evolved, all thanks to the cloud. Enterprises originally deployed ERP software to centralize key processes such as manufacturing, supply chain and HR amongst others. The focus was on pulling these processes together as the pulse of the organization. However, the only backlash organizations faced was in terms of its complex nature of implementation. The mobile revolution and cloud is bringing about a positive change in the same.

A cloud-based ERP solution can help free up capital, while providing the flexibility to meet ever evolving operational needs. This will enable enterprises to quickly and easily respond to opportunities in the market. In addition, in this rapid paced market, mergers and acquisitions happen very quickly, and very frequently. Unfortunately, when two organizations merge, so does their software, hardware, infrastructure and processes. Cloud based ERP provides a safe, efficient, and economical way to avoid disruption and creates a smoother path to synching these processes.

Before moving to the cloud, organizations need to consider the following reasons to make the jump:

Cost Reduction

Numerous studies have shown that moving to the cloud can significantly reduce costs. According to a recent report, cloud-based implementations typically require lesser development and testing resources, and cloud vendors usually provide much of the required appli­cation support and maintenance. As a result, organizations that deploy cloud-based applica­tions spend 40% less on consulting and 25% less on support personnel than organizations that deploy on-premise applications. In addition, cloud-based solutions are typically more cost effective than on-premise solutions.

Increased Time to Value

With cloud based ERP, deployments are faster, there are fewer work slowdowns during implementation, and there is no need to invest capital in upgrading the infrastructure. Rapid response is critical when unforeseen events take place – such as new competition that can eat into your market share in a couple of months. On-premise applications aren’t as quick to rapidly structure, expand, and scale up operations, like cloud solutions are, which can put a company at a disadvantage when faced with other fast growing businesses.

Because cloud launches require less internal support—in terms of both physical infrastructure and human resources—organizations typically experience little business disruption during implementation. And without the physical infrastructure that on-premise solutions require, you don’t normally need to invest capital in new IT equipment.

Faster Growth Projection

Cloud deployments don’t force one to install any physical infrastructure. They help make it significantly less expensive and less time consuming to establish business presence in new and remote locations. If your business venture is successful, you can quickly and easily scale the solution to meet your expanding needs; and if the venture is a bust, your minimal investment in the cloud deployment for that location represents a much smaller loss than you’d incur with an on-premise solution.

A cloud-based ERP solution is also easier to update than on-premise solution. With on-premise, the bills don’t just stop after you finally build and finish the data center. There will be ongoing maintenance, needs for periodical upgrades, power bills, cooling costs, administrative needs and this will continue to mount every year. Money used in maintaining an on-premise data center can be used productively for more modern solutions, if you are ready to curb your expenses.

Better Efficiency

Business growth is only profitable if it’s balanced. Cloud solutions are ideally suited for improving the efficiency of manufacturing operations because they can help automate many of the typical steps in business processes, replacing manual activities and virtually eliminating the need for duplicate data entry. For instance, automating new product development and introduction processes can help get your products to market quicker. A cloud-based ERP solution can also give you a platform for easily collaborating between departments of your organization, as well as externally with your suppliers and distributors. An enterprise-wide, cloud-based ERP system can also give you early detection capabilities and real-time access to information about capacity, availability, qualifications, and interdependencies of employees, equipment, tools, and materials data. As a result, you’ll have access to the information you need to adjust schedules and avoid any unforeseen disruptions.

More Visibility

A cloud-based ERP system can also give you complete visibility across your entire organization as well as one access to robust collaboration tools. These collaboration capabilities extend across your enterprise and suppliers, enabling you to identify potential problems more quickly and accurately, analyze them more deeply, discover what’s truly driving them, and identify solutions before they can create bottlenecks.

As organizations gear up to seize new growth opportunities, you need capital to invest and the infrastructure to support your organization’s new direction. A cloud-based ERP solution delivers everything you need to free up capital and positions you to swiftly respond to whatever surprises the market sends your way.