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There’s more than a few key factors retail businesses should be aware of when deciding whether an ERP (enterprise resource planning) system is right for them. Not only is the cost related to the size of the business an important consideration, but also just how useful or necessary ERP will be to the business over the course of several years. In the past it was quite common to see on-premises ERP systems, but lately cloud-based ERP systems have shown up and grown exponentially, changing the playing field accordingly.

In my experience, business size will often play a role in whether or not a cloud ERP is the right choice for any given enterprise. Generally, most cloud ERP services work better for small to medium sized businesses, since there’s less operational complexity involved. A cloud-based system can be effective for larger, established businesses as well, but are particularly effective if you’ve got a business that is currently in high-growth mode, as they can rely on a very fast deployment. It’s important to note, however, that you’ll probably need lots of help from IT professionals when it comes to getting ERP systems up and running – preferably from certified experts who have followed a recognized program such as SAP’s ERP training. Another common hurdle which requires expert advice is configuring remote functionality on your mobile and smart devices.

Budgeting

While traditionally setting up an ERP system has required a substantial upfront investment, today these same systems often work just fine with a steady level of funding allocated over a given period of time. And while budgeting money is obviously important when figuring out how your company will use ERP software, the budgeting of time should be considered just as important. The old cliché still holds true, after all – time is money. While the amount of time it takes to implement these systems can be hard to estimate with much accuracy, systems that are based on SaaS models are usually implemented faster, this because they have less need for infrastructure and typically require less customization. Also, once implemented, these ERP systems have a much quicker deployment for services that require little more than internet access and a web browser. Along with money and time, the sheer volume of master data is another important consideration when considering cloud based ERP systems. Companies with higher server requirements may find that cloud solutions significantly reduce storage and maintenance expenses.

Other Considerations

There are a couple of other considerations to be made when it comes to choosing whether a cloud-based ERP system is the right choice for your particular small business. Specifically, those enterprises that have SaaS ERP systems will find they might need to be implementing updated versions on a regular basis, which could result in higher training costs or other disruptions. A sudden end of life for a piece of software could potentially result in a loss of access to data and software in the company. Migrating large files over the internet can also increase the risk of data loss, as well as being a time-consuming process in general. Businesses that require immediate results might want to avoid these systems due to the increased latencies often associated with them.

A Viable Alternative: The Two-Tiered Approach

If your small business isn’t quite ready to completely commit to a cloud-based ERP system yet, you can also turn to something of a two-tiered approach. This involves keeping a primary ERP system at a corporate level while enabling each unit of the business to select a second ERP system. This way, an organization could manage hybrid situation of sorts, where they have a combination of on premises and cloud-based ERP software to meet their requirements while maintaining overall flexibility.

Should I choose cloud based ERP? As we established earlier, cloud-based ERP systems can be a great choice for smaller businesses that have very little IT infrastructure and/or business complexity. As a result, small to midsize companies with mobile access needs that want to lower their initial investment costs should consider cloud-based ERP as a viable option for them, while larger businesses can also capitalize on hybrid or two-tier systems to suit their needs. There are considerations to be made, such as the size of your business, your flexibility in regards to data, and whether or not you can afford to reach out for help from IT professionals to get your system up and running, all of which need to be assessed on a case by case basis, as not every solution will work the same for every small business. So while the final decision might not be obvious, there’s a wide variety of reasons why cloud-based ERP systems remain a viable option.

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