Cloud-based ERP systems have become essential tools for businesses of all sizes, including small businesses. These systems integrate various business processes into one streamlined platform, enhancing efficiency and productivity. Let's explore how cloud-based ERP systems can benefit businesses by looking at key features like project management, supply chain management, and more.
What Is Cloud ERP Software?
A cloud based ERP (Enterprise Resource Planning) system is a type of software that allows businesses to manage and integrate their core processes through a single, centralized platform. This includes everything from accounting and human resources to inventory and warehouse management. By utilizing the cloud, these systems offer mobile accessibility, making it easy for employees to access necessary information from anywhere.
All major ERP software providers offer cloud-based solutions at this point. And, it’s fair to say that on-premises ERP will eventually be replaced almost entirely by cloud-based services — which is what we see happening with most software.
Similarly, SAP ERP for small businesses has moved to the cloud, providing all the benefits of implementing SAP at a significantly lower cost. The financial benefits of cloud ERP become apparent when one conducts a cloud versus on-premise cost comparison. Let’s dive deeper into the concept of cloud ERP and look at how these platforms can help small businesses achieve their goals.
How Does ERP on the Cloud Work?
The solution is usually offered as a subscription-based service, which means that businesses only need to pay for the features and functionality they need and use. This type of billing model is often referred to as “Software as a Service” (SaaS), and it’s become increasingly popular in the software industry over the past few years.
With on-premise ERP solutions, businesses need to purchase the software outright and then pay for any additional licenses, support, and maintenance costs. This can be a significant upfront investment, which may not be affordable for small businesses.
In contrast, a cloud ERP system is much more flexible and affordable. businesses only need to pay for the features and functionality they use, and they can scale up or down.
Why Should a Company Use Cloud ERP Solutions?
Historically, ERP system implementations have delivered tremendous value to organizations by helping them gain business insights that enhance productivity. As we have moved into the global digital age, businesses are required to keep up with the growing demands of the market.
Cloud-based ERP systems are the trifecta of business optimization, offering unparalleled flexibility, rock-solid reliability, and top-tier security.
Here's how:
Flexibility: Cloud-based ERP systems offer flexibility, allowing businesses to scale their operations as needed. This adaptability is particularly beneficial for growing businesses.
Reliability: These systems provide reliable performance with minimal downtime. Cloud providers ensure that ERP systems are up-to-date and running smoothly, reducing the risk of operational disruptions.
Security: Security is a top priority for cloud-based ERP systems. They offer advanced security features, such as data encryption and regular backups, to protect sensitive business information from threats.
As a business manager, you’re always on the lookout for products and services that are delivered faster, are improving their standards, and come at lower costs. On-premise ERP systems, designed for simpler landscapes, often struggle to keep up with these growing demands. Cloud-based ERP software allows companies to handle increasingly complex internal processing, while also helping them manage their business networks all over the world.
Key Features and Benefits of Using Cloud ERP Software Solutions
Project Management: Cloud-based ERP systems offer robust project management tools. These tools help businesses plan, execute, and monitor projects efficiently, ensuring that projects are completed on time and within budget.
Cost Effective: Implementing a cloud-based ERP system can be cost-effective for businesses, especially small businesses. These systems reduce the need for extensive on-premises hardware and IT support, lowering overall costs.
Supply Chain Management: Effective supply chain management is crucial for business success. Cloud-based ERP systems streamline supply chain operations, from procurement to delivery, ensuring smooth and efficient processes.
Warehouse Management: Managing warehouse operations can be complex. ERP systems simplify warehouse management by tracking inventory levels, optimizing storage, and improving order fulfillment.
Business Processes: By integrating various business processes, ERP systems provide a comprehensive view of operations. This integration helps identify inefficiencies and areas for improvement, leading to better overall performance.
Customer Relationships: Managing customer relationships is vital for business growth. ERP systems help track customer interactions, manage sales pipelines, and provide insights into customer behavior, enhancing customer satisfaction and loyalty.
Human Resources: From recruitment to payroll, ERP systems streamline human resources management. This integration ensures that HR processes are efficient and compliant with regulations.
Mobile Accessibility: The mobile accessibility of cloud-based ERP systems allows employees to access important information on the go. This flexibility enhances productivity and responsiveness.
Inventory Management: Accurate inventory management is critical for meeting customer demands. ERP systems provide real-time inventory tracking, reducing stockouts and overstock situations.
Accounting Software: Cloud-based ERP systems often include robust accounting software. This integration simplifies financial management, from invoicing to reporting, ensuring accurate and timely financial information.
How Do Cloud ERP Systems Help Small Businesses?
In the introduction, we explained that one of the biggest benefits of cloud ERP for a small business is how accessible it is.
While the benefits of having an ERP system are the same regardless of company size, the fact that cloud ERP systems are so much more affordable and easier to implement and manage helps small businesses get more value out of them.
Where on-premise solutions often have prohibitively high implementation costs, there are cloud ERP solutions to fit any business size.
Additionally, small businesses often don’t have the in-house resources required to support on-premise solutions. Cloud ERP providers serve as an extension of your team, managing updates, maintenance, and monitoring for you.
This lets you focus on using the software to grow your business rather than worrying about whether the software is up and running.
Improved Agility for Your Business
Agility is of utmost importance to a growing business. Companies need to be able to seize opportunities by adding new locations, introducing new products and services, making acquisitions, or responding to competition in the market. By providing real-time access to data across departments, cloud ERP systems give companies the flexibility required to grow their business.
Cash Flow Visibility on the Cloud
Cash flow is the lifeblood of any growing business. By integrating accounting processes with business operations, cloud ERP software helps increase the availability of information such as working capital, operating expenses, and investments. This helps ensure that everything in the organization is accounted for accurately, ultimately fueling growth.
Seamless Integration on the Cloud
Small companies must frequently adjust to keep up with the growing demands of the market and consumers. Cloud-based ERP solutions–by simplifying the integration of new software, processes, and solutions–help with these frequent adjustments.
Some Challenges of Cloud-Based Systems
While a cloud-based ERP system is generally a good idea for most businesses, it can often present challenges as well.
Migration from on-premises ERP systems to a cloud system can be a trying process. This is especially the case for a company that has been using the same on-premise solution for many years.
It can often be difficult to incorporate legacy data and processes into a new system. One way to get around this is to implement a cloud-based ERP piecemeal, integrating new processes one at a time.
It’s also a good idea to involve as many stakeholders in the decision-making process as possible to get them on board with the transition.
That brings up another potential challenge in the process of integrating a cloud system — resistance to change. Getting stakeholder buy-in is vital to complete a cloud migration successfully.
This is an area that many cloud ERP vendors overlook. We work closely with our customers to equip them with the tools needed to make the process as painless as possible.
Lastly, migrating to a cloud ERP solution can expose you to regulatory compliance issues.
With more and more data in the cloud, businesses in certain industries like pharmaceuticals need to know where and how their data is being stored and protected.
This is one of the areas that we specialize in and we have a long track record of successful ERP implementations for pharmaceutical companies of all sizes. The key is in working with ERP software solutions providers that are ahead of the curve, such as SAP. These providers have solved the issues of regulation and offer the same level of compliance with their cloud solutions as they do for on-premises ERP software.
Conclusion - Enterprise Resource Planning on the Cloud
Cloud ERP solutions offer what many growing companies need to achieve their goals. Our dedicated team of experts at Navigator Business Solutions is here to answer any of your queries regarding these ERP solutions–reach out to one of our experts today to learn how to take your business to the next level by utilizing these solutions to their full potential.
