Enterprise resource planning (ERP) software is an essential technology for many businesses. It offers greater control and more efficient operation of the business. Ultimately, it helps you control your resources and so directly benefits the bottom line. Traditionally, ERP software was run in house. With the rise of cloud and as-a-service options, there are now many alternatives. So, what are the advantages of moving to a cloud based ERP solution and is it right for your business?
Cost Advantages of Cloud Based ERP
One of the key benefits of cloud rather than in-house ERP solutions is that the implementation costs are far lower. The hardware setup is the endpoint system only. There are no servers or central systems to worry about. Which can be a huge headache if you want to get on with your day job. With on premise you can find yourself spending time and resources on in-house servers. Therefore there is minimal initial investment by comparison.
Cloud based ERP systems are usually paid for on a monthly subscription basis (with discounts for annual subs) so there’s often no up-front cost and licensing fee for the software either. Meaning you are simply paying for migration and training services. This also has major advantage in scalability. As your business expands, it’s much easier to scale up cloud software to take account of extra demand. Plus, there’s no lead time involved in ordering additional hardware or gearing up the system. By the same token, it’s easier to cope with seasonal peaks in demand.
Having a system in the cloud also means that there are fewer worries concerning your return on investment. You won’t be stuck with an ageing system that your business has outgrown because it was an expensive investment.
Reliability is a key issue for any business system. With a cloud based ERP system, downtime for routine upgrades to the software and backups is kept to a minimum. Your point of failure is more likely to be your internet connection, which typically have strong uptime. However on the flip side if you have a poor internet connection, this can be an argument for an on-premise alternative.
With cloud based ERP people do not need to be office based to access to the latest version of the software. Whether they are in the office, working from home or out on site, the most recent updates can be accessed upon log in.
In choosing a cloud provider, you should always look at their reliability record and remember not to simply take their word for it. Talk to other customers or read reviews to assess the overall reliability of the solution.
Location, Location, Location
Of course with a cloud solution, you have the added advantage that the system is available from anywhere with an internet connection. Which is great in the modern world of remote and flexible working. This also makes life easier if you move premises. It also means that all of your branch offices, home and mobile workers are able to access exactly the same system, with the same features, as your main site.
Obviously, you need to consider performance too. Having a reliable, fast internet connection is key to using any cloud system effectively. It’s therefore important to review your network connections before you make the move to a cloud-based solution.
It also means that the system is available across a wide choice of endpoint devices. No longer are your staff reliant on desktop PCs or expensive laptops to do their work. Cloud-based systems can be accessed on mobile devices such as smartphones and tablets too. In many cases, the software providers will have specific apps available to make access easier and offer better features than if using a browser.
If you have a Bring Your Own Device (BYOD) policy that allows your staff to use their own devices for work, then a cloud solution is an advantage here too.
One of the significant advantages of any ERP system is the level of information that it gives you about your business. I think we all know it isn’t a good idea to manage such significant resources over excel but many will still try and use such ill-fitting solutions for far too long, in a quest to save money. Not realising the opportunity cost and the wasted resources when you don’t make the right decisions as a result! Intelligent decision making at a strategic level is enhanced when you have a system that is able to connect seamlessly to your business intelligence solution.
Provided that your cloud ERP solution has data that is organised in a structured way,then linking to a BI system – or simply extracting data to spreadsheets – should be a straightforward process. But many cloud ERP solutions have impressive built-in analytics. This can allow data to be presented in dashboard format, or extrapolate other data to aid with key decision making. Since the system is in the cloud, the data is also more likely to be up to date than in older in-house systems.
Cyber security is an issue for all business systems today. With the risk of attacks and data breaches being higher than ever. Putting any system into the cloud is, therefore, likely to raise concerns as to how safe your company’s confidential information is going to be.
The cloud can provide secure gateways that allow for remote access from anywhere. It also permits document management solutions that enable the use of documents by authorised personnel only. Strong security can also prevent sensitive data being downloaded without authority.
Any good cloud ERP should offer a centralised, structured system of controls. With the ability to control permissions that enable you to tightly control data access. Most systems allow you to grant access permission to line managers rather than IT departments, so that staff can access information they need.
It also helps with retention policies, so that you can ensure you have the data you need to comply with industry standards and legislation such as GDPR. It can help you to build an effective data loss prevention strategy too.
Data remains your responsibility
You should, of course, avoid the trap of thinking that by going to the cloud you are delegating responsibility for security. You are still responsible for your data. It’s a good idea to have your own backup solutions in place as a fallback. Plus of course, you are still responsible for keeping all of your endpoint systems secured.
Any ERP system provides benefits to the business, but a cloud solution takes things to a new level. If you are looking to upgrade from an in-house system, or implementing ERP for the first time, then the cloud is something you can’t afford to ignore.
Should We Move to Cloud Based ERP?
Provided you have a strong and reliable internet connection then I would thoroughly recommend cloud based ERP software. In considering alternative solutions a good provider or value added reseller should provide you with the information you need to determine what is the right solution for you. As there is no one-size-fits-all solution. Cloud based software exists for a reason though. In the modern world of flexible working, needing to access your documents remotely and the trend for subscriptions it is always worth considering a cloud based ERP when it is time to migrate to a new system.
Sarah Moody – Senior ERP Recruitment Consultant