Benefits of Moving to Cloud ERP for SMEs

Categories ERP

Benefits of Moving to Cloud ERP for Small and Medium-sized Enterprises

This article introduces the benefits of moving to cloud ERP for small and medium-sized enterprises. What is the effect of moving away from the conventional analog environment and moving to a digitized system environment? If you're a small business owner considering your intentions to cloud ERP or cloud, refer to it.

Very few of us use fax machines to communicate in our personal lives. Most of us use free tools such as LINE, Telegram or Facebook to connect with others and some apps on our smartphones to make our lives more convenient.

On the other hand, there are many businesses that still use fax machines to receive orders, and there are also cases where paper forms are used to manage inventory. In fact, in this IT society, there are many businesses that have yet to adopt IT.

Table of Contents:

  • Cloud ERP
  • Advantages of implementing cloud ERP for small and medium enterprises
  • The Era of ERP implementation for SMEs

Cloud ERP

For those who don't know what cloud ERP is, let me give you a quick overview. Nowadays, even small and medium-sized businesses started implementing business systems such as accounting software. However, there is one major problem: it is not possible to integrate the data held by each business system.

It is not limited to small and medium-sized enterprises. However, due to the progress of individual system optimization since the late 1990s, many companies have built independent business systems for each department. It was great for streamlining each business, but in today's world, where information visualization by data analysis and efficient management are said to be important, the system is now considered outdated.

These days, management needs data analysis to take the helm instantaneously. Without this, it is said that we will become the losers of the digital society. Many companies consider an integrated system environment where all business systems work together, but small and medium-sized enterprises abandon it because of the enormous development costs. However, if you continue to use a fragmented business system, management and strategy centered on data analysis are not suitable.

That's where enterprise resource planning (ERP) came in. By packaging a set of pre-integrated business systems, you can aim to integrate business systems more cheaply and reliably. Among them, ERP provided as a cloud service was an opportunity for SMEs to implement ERP because it reduces the cost of implementation and significantly reduces the operational burden.

Benefits of implementing cloud ERP for SMEs

The benefits of cloud ERP are very diverse. There are many attractive benefits, especially for small and medium-sized enterprises, and it will be an opportunity to consider the integration of business systems concretely. So, what are the benefits?

Almost no initial investment for ERP implementation

When it comes to implementing ERP as a packaged product, there are many cost items involved in the ERP implementation, such as hardware procurement, network maintenance, software licenses, parameter settings, customization costs, etc. Even for a small to medium-sized company, the implementation costs start at tens of thousands of dollars. If you are a small or medium-sized company with good capital, it is a good idea, but if not, you will have to give up.

On the other hand, since cloud ERP is a service provided via the Internet, there is no need for hardware procurement, network maintenance, software installation, etc., so the cost of implementation is much lower than that of on-premise ERP.

For small and medium-sized enterprises (SMEs), where the initial investment has been a bottleneck, cloud ERP is a service that has boldly lowered the threshold for ERP implementation.

The cloud service provider takes care of the operation and management

Other than the initial investment, the other bottleneck is the day-to-day operation and management of the system. Many small and medium-sized companies do not have the IT human resources to implement an ERP system, and in some cases, this is enough to make them give up on the idea. On the other hand, outsourcing the operation management is expensive. That was also a primary barrier to ERP implementation.

Cloud ERP is now available to resolve this issue. Since the cloud operator is responsible for all system operations and management, companies can use ERP for their business operations.

Even SMEs with IT human resources can expect aggressive IT investments because cloud ERP increases productivity.

Requirements of high security

Cloud ERP is a service via the Internet, and the data registered in the system is stored in a data center managed by the cloud provider. Therefore, it may cause some to worry about the high risk of information leaks. However, in general, major cloud ERP providers have invested heavily in security, so implementing cloud ERP can strengthen the security system of the entire system environment.

Cloud providers that offer cloud ERP have met many security requirements with high standards. They have not neglected either the security system to physically protect the data center or the data itself. That is why many small and medium-sized companies use cloud ERP to improve their security rather than failing to leak information.

Immediate access to an integrated business system environment

When implementing ERP as a packaged product, not only does it require an initial investment, but it also takes a considerable amount of time before it is fully operational. That is also a high cost and a burden for small and medium enterprises.

On the other hand, with cloud ERP, there have been cases where full-scale operations have been achieved in as little as one month, significantly reducing the cost of ERP implementation.

Access the system on the go

Cloud ERP is a service over the Internet, so it can be used via the Internet even when you're on the go. Since the terminal to use is not chosen, it becomes practical to expand the range of business and implement telework. It is attracting attention as a solution that is directly linked to work style reform.

Provides a management dashboard

Many cloud ERP's have a management dashboard that allows managers to get whatever they want, whenever they want, they need for management. The ability to grasp business situations in real-time enables management activities centered on data analysis. In addition, drill-down into details can instantly identify management bottlenecks.

Fixed costs make it easy to plan the budgets

Cloud ERP, like previous business systems, is fixed for the overall cost of the system environment. That will make it easier to plan your budget and allow you to spend more strategically.

Flexibility to scale the system according to the environment

In the case of ERP as a packaged product, adding new licenses or hardware is required to expand the usage environment. On the other hand, cloud ERP has the advantage of being able to expand the system flexibly according to the usage environment, as you only need to add the necessary licenses from the management screen.

The Era of ERP implementation for small and medium enterprises

ERP adoption rates for SMEs are increasing year by year, especially in cloud ERP. There is no doubt that cloud ERP has become a convenient option for small businesses, and this trend will continue. If you haven't deployed ERP yet, why not take this opportunity to focus on the benefits of cloud ERP and consider deploying it?

See also:
Difference between CRM and ERP
SaaS – Benefits of Implementing SaaS
Advantages of Cloud Services
Benefits of Implementing ERP for the Retail Industry
Differences between On Premise ERP and Cloud ERP

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