5 Cloud ERP considerations: Stay current with timely resources

Before deciding whether or not to implement Cloud ERP, a company should consider the benefits but also the proper timing for the specific company.
By Ultra Consultants July 12, 2017

Ultra Consultants' Cloud Formation Matrix shares the attributes that make a true cloud system, including an off-site delivery model, subscription payment method, and mandatory upgrades completed by the enterprise resource planning (ERP) vendor. Courtesy: Ultra Consultants

As cloud enterprise resource planning (ERP) vendors gain momentum in the manufacturing and distribution industries, ERP selection teams continue to give serious consideration to the technology platform. For today’s project teams, since adoption and ERP implementation are more widespread, cloud ERP considerations are very much on the minds of today’s small to medium organizations.

Key business drivers contribute to the growing interest in cloud ERP, including the advantages the model delivers in terms of timely product upgrades. The enterprise gains control from all users operating from one version of the software, while the software vendor does the heavy lifting of updating the software and making changes automatically available. Another critical business driver is "anywhere anytime access" as well as the ability to run more flexible systems that adapt to changing market conditions. Small to medium manufacturers and distributors also look to the promise of more adaptability in terms of bringing on new operations as an enterprise grows through mergers and acquisitions.

Today’s cloud ERP considerations

The cloud model is an effective, scalable, and economic way to implement business applications. Cloud ERP is designed to allow a company to respond to the challenges it will face years into the future, as well as those confronting it today. Companies looking to use cloud ERP should keep five things in mind before going forward with it. 

Consideration 1: Cloud ERP—a working definition

Cloud service is delivered through an off-site model, as opposed to on-premise or co-located hardware and software. In the case of cloud ERP, the enterprise resource planning solution is hosted off-site through a vendor. Cloud ERP solutions are proving to be strategic, innovative, cost-saving measures that can fit business needs without investment in on-site hardware and other infrastructure.

Consideration 2: Cut costs, increase return on investment (ROI)

Cutting time and resources during a cloud ERP implantation is a key driver. Cloud ERP can be deployed quickly and is designed to enable real-time access to important business information. Cloud ERP solutions also feature frequent, automatic upgrades that evolve to fit growing/changing businesses.

These lower operating costs make it easier for organizations to improve ROI without interruptions to day-to-day operations. Though the specific offerings vary with each solution, most cloud ERP vendors also offer substantial business and user support—lessening the burden on internal teams.

Consideration 3: Reduce risk

Every organization seeks to reduce risks associated with enterprise software implementation. Cloud ERP systems offer increased security and often 24-hour support, allowing companies to significantly decrease risk by choosing to transition to a cloud ERP. Cloud ERP also increases uptime, meaning less disruptions and increased productivity for companies running less reliable legacy systems. Cloud solutions generally include a commitment for uptime. Secure data storage in the cloud also alleviates concerns that can arise when an employee leaves the company or a company device is stolen or misplaced.

Consideration 4: Improved productivity

What’s the impact on the bottom line? Cloud ERP provides many tools to improve users’ productivity, allowing for flexibility without the need for "bolt-on" solutions. Implementing modern technology is also important for attracting and retaining top employees. The cloud offers consistency and enables the entire organization to be on the same up-to-date version of the software. Cloud ERP is also designed to aid businesses with real-time monitoring of key performance indicators (KPIs).

Consideration 5: When to make the move to cloud ERP?

While every business is unique there are a few prominent factors that can indicate readiness. If current applications are no longer upgradeable or if there are security concerns, it may be time to address cloud ERP considerations. Other indicators include:

  • A low ROI from an on-premise program
  • Lack of organizational flexibility
  • The frequent need for customization
  • Substantial use of internal technical resources to deal with support issues rather than focusing on business initiatives.

If any of these factors apply, then it might be time to consider cloud ERP’s potential benefits on the plant floor.

This article originally appeared on Ultra Consultants’ blog. Ultra Consultants is a CFE Media content partner. Edited by Carly Marchal, content specialist, CFE Media, cmarchal@cfemedia.com.