5 Reasons Manufacturers and Distributors Should Consider a Cloud ERP Solution

Today’s IT departments increasingly leverage the cloud to deliver applications and services throughout the organization, as well as to customers and partners. In fact, last year Gartner reported that 40% of organizations in North America plan to spend the majority of new or additional funding on cloud technologies.

Modern, forward-looking ERP vendors offer a cloud version of their products. In the UK, 78% of CIOs who responded to a 2019 survey by Accenture stated that the cloud is critical to their overall IT strategy – and that 50% already are running a hybrid cloud ERP platform.

Where does that leave you? Here are five reasons to consider a move to cloud ERP:

1. Real-Time Data Analytics

Business moves quickly, and decision-makers in your organization need the most up-to-date data possible. This can be difficult if you don’t have the staff, expertise or financial resources to support the advanced on-premise software required.

Cloud ERP systems often have the most up-to-date data analytics tools. By the very nature of the cloud, you’re able to scale up your storage and resource usage as needed, so you don’t have to buy more hardware to run analytics. As a result, your business, from the shop floor to Sales, can use the most accurate information to make decisions, whether it’s maintaining quality or upselling a customer. 

2. Accelerated Implementation

Implementing an on-premises ERP system can take many months, and sometimes years, to complete. That includes the needs assessment, planning, business process improvement and ERP selection phases, hardware purchases, installations, and more.

A cloud ERP system can be up and running in far less time than it would take for an on-premises ERP system. Cloud ERP removes the steps involved in purchasing and installing hardware, and configuring and implementing software. In some cases, a cloud ERP system can be live in weeks.

3. Reduced Maintenance

In addition to being able to go live quickly, choosing a cloud ERP solution means that less IT staff time is spent maintaining the system – and more time is available to do tasks with more strategic value. The software provider installs patches and updates so that you always have the most current version and immediate access to new features and functionality. Additionally, the cloud provider is responsible for installing more storage space and upgrading nodes, as well as running the power and cooling to the servers.

4. Robust Security

ERP systems hold large quantities of sensitive company data, including customer lists and payment information. A security breach can be very costly in terms of lost revenue and lost customer trust.

Security traditionally has been considered a barrier to cloud adoption. And many IT organizations think cloud applications are less secure than on-premises solutions. But the perceived risk gap may have disappeared. A September 2019 survey of U.S. and UK security professionals found that 61% say the risk of a security breach is no greater, or even lower, in cloud environments. Here’s why: Cybersecurity is a specialized discipline, and it takes only one crack for a hacker to enter the system. Cloud providers have a team of security and compliance experts with far more expertise than you can develop in-house.

5. Lower TCO

While cost shouldn’t be the only factor considered when moving to a cloud ERP system, it’s still an important reason why a move may make sense for your organization. In addition to the money saved by not owning the hardware, companies also reduce costs associated with hiring specialists to implement and maintain the system from top to bottom. The cloud provider takes care of all of that for you.

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Jeff is the founder of Ultra Consultants, a well-known voice in the ERP consulting industry and an expert on ERP solutions for discrete and process manufacturers. Over the last 40-plus years, his companies have helped more than 2,000 organizations improve their business processes, select ERP software and implement advanced solutions.

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