Why Cloud ERP?
Business Reasons to Make the Move to Cloud Computing
For many small and medium-sized businesses, the move to the cloud is done for obvious business reasons—the first one being lower up-front costs.
But another significant benefit is speed to implementation. A 2014 survey by the industry analyst firm Mint Jutras reported that “respondents with SaaS implementations reached their first go-live milestone 19% faster than those with on-premise solutions”. Both of these benefits are possible because cloud computing eliminates the need for purchasing and installing hardware and software.
Other business benefits include:
Anywhere, anytime access to information by staff, customers and partners, since all applications are designed to run on mobile devices
No staff time required to maintain or upgrade hardware as the company grows
Most current functionality is always available since the cloud vendor maintains and updates the software
The SaaS cloud vendor will typically have the best security available, a fact which has been verified by the news of data security primarily affecting on-premises systems in large and medium-sized companies
Data is safely backed up with a disaster recovery plan
True cloud applications are designed with an intuitive user interface to speed time to productivity
Remember, not every ERP Cloud provider is True Cloud and can offer all these benefits.
Success with the cloud
Because cloud solutions have been used to run ERP applications for some time now, the industry has access to documented results of the benefits.
One example is from the report “Improve your Midmarket Business Operations with Cloud Applications” by the Aberdeen Group:
The benefits of the Cloud provide tangible business benefits in operating costs, schedule compliance, and on-time delivery”. Aberdeen reported that the average improvement of profitability over the past two years for midmarket companies that are not in the Cloud was 9% profitability improvement. However, midmarket companies who were Cloud-enabled reported a 17% improvement in profitability over the past two years. This is a staggering 8 point difference. By providing the technology tools their people needed, these market leaders saw an ROI that improved their overall bottom line.
Also in that report, they wrote about integration with other technologies:
“For midmarket organizations, the flexibility that cloud environments provide actually enables these organizations to implement more technology that can improve processes across the organization. Results include
13% more likely to have Customer Relationship Management
43% more likely to have Business Analytics”
Finally, they touched on one of the most important areas for a small or mid-sized business, keeping track of business activities and visibility across the organization:
“Since a cloud solution is accessible to employees no matter where they are, it is easier to share the functionality included in the solutions. Ultimately, this improves visibility, impacts collaboration, and enables efficiency and agility. In fact, midmarket organizations with cloud solutions are
41% more likely to have real-time visibility into the status of all processes
47% more likely to have automated notifications empowering business leaders to react immediately”
Improvements will be made in a company whether they have cloud ERP or traditional systems; however, cloud implementations result in significant ROI improvements over on-premises ERP systems. A few examples include:
8% improvement in operational costs as a result of cloud ERP
8% improvement in profitability as a result of cloud ERP