While working with a client recently to evaluate whether to move from an on premise ERP system to a cloud-based ERP system, one factor that we discussed was how the solution they have right now does what’s needed: it’s not broken. So, they understandably asked, “When is the right time to move to the cloud?” That’s a big question for any business, and the decision can impact everything from operation efficiency to your bottom line.
For example, one of our clients, MC Metalcraft, was bound to the office and saw that most of the metal manufacturing industry was moving to cloud-based manufacturing systems. While sticking with a familiar on-premise setup may work for some, we want to explore some compelling reasons why your company would consider a move to a cloud-based ERP system.
Cutting Your Costs
One of the primary drivers behind the shift to a cloud ERP is cost efficiency, as it can save companies as much as 20% annually. Cloud providers are responsible for maintenance, updates, and security, helping companies make those long-term cost-savings while freeing up internal IT resources for higher-priority projects. Cloud solutions often operate on a subscription-based model, eliminating hefty upfront investments in hardware and software.
Keeps Tech and Security Updated
Maintaining up-to-date technology and robust security measures is crucial with the modern demands of digital business. Cloud ERP systems are continually updated with the latest features and security patches by the publisher, making sure that the company benefits from the latest technological advancements without the need for frequent manual upgrades. Companies with on-premise ERP systems often delay or skip manual software upgrades because of the associated business interruption, and often additional unplanned costs to complete the upgrade. Subscription-based cloud ERP systems eliminate the ‘distraction’ and unproductive time and costs associated with manual upgrades.
This proactive maintenance leverages the expertise of cloud vendors so that companies can remain at the forefront of technological innovation while minimizing the many risks associated with cybersecurity threats and maintain compliance.
Making Software Connections
Modern business operations need seamless integration between ERP systems and other essential services. Thankfully cloud-based ERP systems are often designed with modern APIs, making it easier to connect with other cloud services and emerging technologies almost instantly. That opens the door to enhanced functionalities such as AI-driven insights as well as a virtual marketplace where services like bank feeds, sales tax compliance, EDI, and eCommerce integrations with Amazon and Shopify can be ‘plugged into’ a cloud ERP.
Room to Grow
As a company grows and evolves, scalability is vital. In a survey of IT experts, 62% cited “scalability and flexibility” as the primary benefit to cloud infrastructure. Whether scaling up to accommodate growth or scaling down during slower periods, the agility of a cloud-based ERP system allows businesses to adapt quickly and efficiently, easily adjusting their resources in response to changing business needs.
Keeping Everyone Connected
Cloud-based systems allow companies to achieve a single version of the truth, providing real-time sharing of information with employees, partners, and customers. For Scott Chakan, President of MC Metalcraft, this is one of the major reasons they made the switch to a cloud-based ERP, saying, “with the old system, I’d have to try to figure out, what <materials> did the team use <on the job>? Having accurate data at my fingertips, which I know is right, has been very helpful for me… Data is only good when it’s right, and if it’s useful and something you can trust.”
Additionally, cloud services can provide accessibility from anywhere, anytime, on any device with an internet connection, promoting remote work and flexibility in operations. That can lead to employees that are more productive and have a better work-life balance, and are empowered with a sense of autonomy and trust from their employers. The result is often higher efficiency and quality of work output, contributing to job satisfaction through a sense of accomplishment.
The prospect of migrating from an on-premise to a cloud-based ERP system may initially seem daunting but from our experience with clients, the benefits usually far outweigh the challenges. From cost savings and technological innovation to enhanced scalability and flexibility, the advantages of embracing cloud-based solutions are clear. In a recent report, 73% of organizations feel cloud migration achieves their objectives. Proactively adopting cloud ERP can position your business for success in an increasingly digital and interconnected world, driving efficiency, competitiveness, and growth. As it is a big decision, you can reach out to us with any questions, as our team has worked with a number of different on premise and cloud-based solutions over the years and can help you sort out what options would work best for your team.