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Jonathan Corey By Jonathan Corey • March 15, 2019

ERP Upgrades Driven by Data Needs and the Cloud

Businesses depend on having the right information at the right time, ensuring that production meets demand, inventory levels are neither too high or too low, and customer expectations are met. This important data flow and management is often now coming from cloud-based ERP systems—and that is proving a major driver of ERP upgrades at many companies.

With ERP now in the cloud, businesses are more easily tapping into data trends such as big data, artificial intelligence, Internet-of-things (IoT) reporting, and more widespread access to ERP system business data overall. Whereas cloud-based ERP was merely a cost-effective way to deploy an ERP system five years ago, it now is being adopted for what it brings, not just what it reduces.

IoT and Big Data Opportunities

The scope for added efficiency and business insight is huge with IoT and big data technologies. When every device can collect operational and environmental information, and this data can be analyzed for iterative adjustment, businesses have entered a brave new world of opportunities.

Cloud ERP and the connectivity it brings is the enabler for these technologies. Whereas before, businesses would collect and enter them in a central system for later analysis, cloud ERP now enables IoT devices and workers to input data automatically. This data can then be fed automatically into analytics or big data systems for real-time analysis. Because the ERP system is in the cloud, the data flows seamlessly and is processed in real-time within the system or passed along to cloud services that perform this analysis.

This is leading firms to start tracking the moving parts of the business in real-time, and to make business adjustments based on the data almost as fast.

SAP Analytics Cloud Content for SAP Business ByDesign

Added Connectivity

A second reason that many firms are upgrading to cloud ERP is because it greatly simplifies the core mission of an ERP system: collecting all of a firm's data in one place.

With their old, on-premise ERP systems, businesses often struggled with data access because connectivity was challenging or not possible. The on-premise ERP solutions that many firms have relied on do not easily connect with cloud services, and integrating them with the systems of suppliers and ecommerce storefronts required clunky integrations in the best of circumstances.

Cloud ERP, being built on connectivity and anywhere access, much more easily connects to other systems in the cloud through one-click integrations or API connections. This connectivity is central to the promise of ERP as the nerve center of a business, and is leading many firms to make the change.

Enabling Mobile Access

Along similar lines, businesses also are upgrading to cloud-based ERP systems because this connectivity extends to employees.

Increasingly, employees are working outside the office from laptops and mobile phones. While virtual private networks and other workarounds have long made it possible for businesses to open ERP access to employees outside the corporate network, these interfaces were clunky and made ERP data less accessible. Cloud-based ERP much more easily travels with employees, and fits with modern work habits and expectations. This keeps the company's ERP system front and center for employees, improving usage and encouraging better use of the system.

Increased mobile access also enables field service use for technicians and sales staff, improving the reliability of the data in the system by cutting down on data that must be entered later.

Reducing IT Headaches

There's a fourth reason that businesses are upgrading to cloud ERP, too: less headaches.

Upgrading on-premise ERP systems is a complicated affair that often requires large up-front capital investment both in terms of hardware and software. This is one reason that ERP systems do not get updated frequently.

Upgrading to a cloud-based ERP system greatly reduces the upgrade path, though, since businesses no longer need to buy hardware or worry about software setup: cloud ERP vendors handle the process end to end, which means businesses only need to configure the system and import data.

Not having to manage the hardware and software also frees up the IT department to focus on more strategic projects, and a significant advantage for most businesses.

The upgrade path is a lot more manageable, and once the cloud ERP system is in place it largely is handled by the vendor.

ERP Systems Are Getting Better, Too

The quality of cloud-based ERP systems also is a reason for increased adoption. Whereas early cloud-based ERP offerings were limited and often amounted to second-rate versions of their on-premise counterparts, that no longer is the case due to widespread demand for cloud offerings. There now are full-featured ERP systems that are cloud native, such as SAP's Business One, as well as industry-specific cloud offerings through SAP's Business ByDesign and other offerings.

ERP has long been important for businesses. With increased data and accessibility needs, that now means ERP in the cloud.