This blog discusses the increased need for a cloud-based ERP system in the case of Small and Medium-Sized Businesses. Also, it shares the reasons for the shift to Cloud ERP from Traditional ERPs.
Today, every business organization has deployed an ERP software that helps them in aggregating and organizing the data spread across various departments in the business organization. Talking about the traditional ERP software, it is present within the company’s self-managed infrastructure with a constant need for updating and servicing.
Challenges Related to Traditional ERP
Most of the businesses opt for an ERP system for easing their inter and intra-department processes. However, despite easing the processes, ERP implementation does offer certain challenges to the SMBs like-
- The major challenge that is associated with a traditional ERP is that it is difficult for businesses to understand which of their processes and system are going to benefit from the implementation of ERP systems.
- Another challenge that arises with a traditional ERP system is flexibility. If the implemented ERP is not flexible enough, then the business will have to adopt the processes in line with the ERP to make it work.
- Any traditional ERP system needs timely maintenance, which brings in its associated maintenance costs. The maintenance costs related to ERP post its implementation are much higher. As the ERP systems are not deployed with any other business, the small businesses are forced to pay these costs by themselves.
What Exactly is Cloud ERP
A Cloud ERP, as its name suggests, is based in the Cloud on similar lines to SaaS. Unlike the traditionally used ERP software, a Cloud-based ERP is dependent on the Cloud for helping the companies share their information across different departments. Cloud ERP systems depict a shared database that supports various functions being used by different business units. Cloud ERP allows the employees present in various departments to have access to the same information to match their own needs.
Benefits of Cloud ERP
In today’s scenario, various Cloud ERP vendors provide innovative and sophisticated alternatives as compared to on-premise ERP implementations. There are a number of benefits that SMBs get when going for cloud ERP solutions. These benefits are beneficial for SMBs as they don’t have sufficient resources to implement an on-premise ERP solution.
Following are the benefits that the small businesses receive with a Cloud ERP system-
- Usually, a cloud ERP solution has a lower cost as compared to an on-premise solution. The reason for lower costs is because a business shares some of the hardware-related costs with other customers who’re also using the cloud ERP solution. When the businesses share hardware and other costs, it makes the Cloud ERP a much affordable option. Also, the business need not worry about the security concern. Another benefit of using a Cloud ERP is that it reduces the IT costs. Similar to the hardware-related costs, the cost of IT staff also gets shared amongst other customers present with the same vendor. Lowered costs can be of great help to the SMBs as it helps the SMBs to overcome the unwanted cost of their under-utilized staff.
- Experts believe that the estimated time taken to implement a Cloud ERP is nearly 1/4th time taken to set up an on-premise ERP. The fact that Cloud ERP takes lesser time to setup is owed to the fact that a Cloud ERP is already set up with predefined modules integrated into it. All the business needs to do is pay the subscription amount and just start using it. Installation of a Cloud ERP is much easier as compared to traditional ERP software. Cloud ERP faces less downtime s during the upgrade process. Cloud ERP systems are entirely managed by the vendors, and set up of software eliminates the need for any intervention from the businesses or even any kind of disruptions taking place in business operations.
- For the businesses, it is difficult to have an on-premise set up as the ERP needs continuous maintenance to keep it running and functioning at all times with the highest degree of efficiency. On the contrary, with a Cloud-based ERP solution, the only requirement remains is a steady connection that helps the businesses to have maximum proficiency with no hindrance and interruption in their working.
- An ERP system is responsible for storing confidential data for any business. When the small businesses go for a Cloud-based ERP system, it offers several layers of encryption for enhancing the security levels of business-critical data, thus, ensuring the data is stored securely. The management can administer individual access to this data.
- Cloud-based ERPs helps the small businesses to streamline all of their crucial business processes. Employees are provided role-based access to data. With this form of ERP, the employee doesn’t need to physically present at the location. With Cloud-based ERP solutions, all the business processes’ status gets updated concurrently.
- An ERP solution helps in integrating all the necessary information from various departments and proves to be an effective method for enhancing business operations. With a Cloud-based ERP solution, this process is made simpler. The Internet contains all the necessary information about the business, thereby making it easier to establish a Cloud ERP connection. The Cloud ERP connection helps the employee to fetch and update the required data. Cloud ERPs can be of great help for the employees who’re working from remote locations to find and share the information that they want.
The current market trend depicts that the SMBs are relying heavily on cloud computing for storing their crucial business data. ERP systems, when integrated with the Cloud is going to offer several benefits to these business organizations and will help them to stay ahead of the competition.