Navigator SAP Blog

The Benefits of Cloud ERP for Growth-Focused Companies

Written by Ralph Hess | Feb 2, 2024 2:15:00 PM

Some startups grow over time. Others move fast and chase the unicorn status of a $1 billion valuation like sustainable shoe manufacturer, Rothy’s.

For slow-growth businesses, there are many options for backend IT systems. But for fast-growing companies that are growth-focused, there really is only one path: cloud-based ERP.

Enterprise resource planning solutions (ERP) are the backbone of most businesses today, and for obvious reasons. They provide a unified interface for all facets of operations and serve as a single source of truth that makes analytics and widescale automation possible. ERP also enables scalability as transaction volume and complexity increase. If a business is generating at least $1 million in annual revenue, it probably has an ERP system already in place.

Growth-focused companies have additional incentives for implementing an ERP early, specifically a cloud-based ERP solution. Here are seven reasons why cloud ERP is essential for fast-growing businesses.

 

Why Cloud ERP for Growth-focused Companies

Startups that are expanding fast  or plan on high growth have conflicting priorities. On the one hand, they need to expand operations and lay the foundation for sustained growth. On the other hand, they need to move fast and contain costs. Cloud ERP addresses both of these conflicting priorities.

 

1. Massive Scalability

Growth-focused companies need to pay for only the resources they use today but maintain the option for expansion as the business grows. Cloud ERP enables this scalability by allowing fast-growing businesses to use only what they need today without requiring an infrastructure change as transaction volume and complexity increase.

Cloud ERP handles small business needs while also being scalable to match the requirements of a large enterprise when a growth-focused company is ready for it. Additional functionality can be added as a business grows, and cloud ERP supports even the largest transaction volumes and the most complex supply chain considerations.

 

2. Fast Rollout

Growth-focused companies need a long-term backend solution, but they need it fast. With cloud ERP, high-growth startups can roll out a complete backend solution encompassing all aspects of operations, finance, and human resources in as little as 30 days.

While a system that encompasses all that a business needs cannot ever be truly turnkey, cloud ERP effectively can be a system-in-a-box so fast-growing businesses can focus on core product offerings and differentiation instead of having to labor under backup setup considerations that are common across all businesses.

 

3. Best Practices Built-In

Growth-focused companies should be innovating around core offerings, not backend systems; accounting and eCommerce integration probably isn’t the big idea for a fast-growing startup.

With cloud ERP, fast-growing startups can innovate where it makes sense and lean on industry best practices for everything else. Cloud ERP comes with operational best practices and workflows built-in, so companies that are moving fast don’t need to reinvent the wheel in areas such as order management and fulfillment.

 

4. Seamless Integration

Modern business is deeply integrated with third-party systems. These integrations can include specialized cloud services, e-commerce platforms, supply chain networks, partner systems, far-flung warehouses, or even field service devices. Complete and easy integration with other systems is essential for high-growth businesses, and cloud ERP is built for this type of connectivity.

With cloud ERP, a growth-focused company can easily connect any part of its backend with third-party systems in as little as a few clicks, and take advantage of cloud services such as artificial intelligence and advanced analytics. As the business evolves, it also can easily add or change integrations without disrupting core backend processes or workflows.

 

5. Artificial Intelligence Ready

The use cases for artificial intelligence are still evolving, but the need for operations that take advantage of AI is already abundantly clear. Growth-focused companies need backend systems that can tap into artificial intelligence easily both now and as the technology matures.

Central to AI capability is data accessibility. AI needs access to company data, and as a cloud-based central repository for all company data, cloud ERP enables this data accessibility.

With cloud-based ERP solutions such as SAP S/4HANA Cloud Public Edition, a growth-focused company can feed any part of its data stores into SAP’s AI Engine or connect it with a third-party AI engine.

 

6. Limited CAPEX

Fast-growing startups need robust backend functionality without much capital investment or ongoing maintenance. Cloud ERP cuts out almost all backend capital expense and limits the need for IT staff by moving maintenance and hardware support to the vendor, and by turning what traditionally has been CAPEX into an operational expense instead.

High-growth companies can stay lean and leave the infrastructure and maintenance to the cloud ERP vendor.

 

7. Enhanced Flexibility

Growth-focused companies do not always know what lies ahead. New opportunities, changes in product or service offerings, and the simple but sometimes unexpected requirements of rapid expansion require flexible backend systems that can evolve and grow without limiting a business.

Cloud ERP that is built for growth comes with a modular design that allows a fast-growing business to turn on and off functionality as needed, and it enables a business to flex as requirements change. Cloud ERP’s deep pool of modules that already have been battle-tested in real-world business environments means that a business has what it needs even before it knows that it needs it.

 

Two Flavors of Cloud ERP for Growth-Focused Companies

SAP is one of the largest cloud ERP providers, and fast-growing startups and midsized businesses comprise nearly 80 percent of its massive customer base (SAP invented ERP). So SAP has it covered for growth-focused companies.

The two SAP offerings that growth-focused companies should be considering are Business ByDesign, SAP’s cloud ERP for small and fast-growing companies. SAP also has recently developed a public cloud version of its flagship ERP used by the largest enterprises that are ideally suited for growth-focused companies: SAP S/4HANA Cloud Public Edition.

These two cloud ERP solutions are built for growth, and they will help fast-growing companies realize the benefits mentioned above.

For more on these two cloud ERP solutions, or for guidance on laying the foundation for growth with cloud ERP, contact one of our experienced ERP consultants at (801) 642-0123 or by writing us at info@nbs-us.com.