Benefits of Cloud ERP

ERP systems have become an invaluable part of businesses. In fact, the benefits of cloud ERP are many. It offers flexibility and scalability and helps save money while providing complete visibility into business processes.
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Besides, cloud ERP empowers you to adapt to the changing business environment and customer expectations. You can quickly add more features to your system, ramp up your storage, and integrate third-party applications. 

With that in mind, let’s understand what cloud ERP is, how it is different from traditional systems, and the benefits of cloud ERP. 

What is Cloud ERP?

Cloud ERP is an enterprise resource planning software hosted in the cloud and managed by the vendor. You don’t need to invest in IT infrastructure or hire tech experts to maintain the system. Instead, your cloud vendor will keep the system up 24/7, add new features, and ensure data security. 

Some cloud vendors offer hosting services, meaning they manage on-premises ERP in their own data centers and deliver it to businesses via the internet. However, when you choose cloud ERP software, you’ll pay a monthly fee to access the system. So, for instance, if you’re in Dubai, you’d want a solution based in the UAE to comply with local laws. 

Traditional ERP vs. Cloud ERP

Traditional ERP (Enterprise Resource Planning) systems are installed on a company’s own servers and accessed through a local network. Cloud ERP systems, on the other hand, are hosted on remote servers and accessed through the internet. 

The main difference between the two is that traditional ERP requires a company to invest in and maintain its own hardware. At the same time, cloud ERP is a subscription-based service managed and maintained by a third-party provider. As a result, cloud ERP can be more cost-effective and scalable. But it also offers less control over data and system customization.

The solution is choosing an industry-specific cloud ERP system. They are designed with industry challenges in mind, so you don’t have to worry about customization. 

10 Benefits of Cloud ERP

There are many ways businesses can benefit from cloud ERP. Here are ten advantages. 

1- Reduces Operating Costs

Traditional ERP requires you to invest in servers and other IT resources. However, cloud ERP eliminates that. Here are some ways cloud ERP can mitigate operational costs. 

  • Eliminates IT costs: With cloud-based ERP, you don’t need to purchase hardware or maintain your own servers. 
  • No licensing fees: Cloud ERP requires you to pay a subscription to use the system. Thus, you don’t need to purchase expensive licenses.  
  • Automatic updates: Vendors automatically update and add new features to their systems, so companies don’t need to invest in expensive software upgrades. 
  • Cost-effective disaster recovery: Most cloud ERP vendors offer built-in disaster recovery capabilities. This allows companies to restore data in the event of an outage quickly. 

2- Ensures Continuous Innovation

Businesses migrate to cloud ERP systems to upgrade their legacy systems, optimize outdated business processes, and introduce new capabilities. Since cloud-based ERP helps consolidate independent systems, it brings all your processes into one place. As a result, you get a comprehensive view of your workflow and can identify areas of improvement.  

Besides, cloud ERP provides real-time data to everyone in the company, including stakeholders. This enables them to make more informed decisions faster. They also come with automatic updates and upgrades. This ensures that businesses have access to the latest software version. This can drive innovation in the organization and ensure everyone follows the industry’s best practices. 

3- Allows Automating Tedious Processes

Cloud-based ERP systems can automate many tasks, such as data entry and reporting, freeing employees to focus on more strategic tasks. Here are some processes you can automate using ERP.

  • Inventory management: Automating tasks such as stock tracking, reordering, and replenishment can help ensure that the right products are in the right place at the right time.
  • Supply chain management: Automating purchase order creation, supplier management, and logistics tasks can help streamline the entire supply chain process.
  • Customer relationship management: Automating tasks such as lead management, sales tracking, and customer service can help improve customer satisfaction and retention.
  • Project management: Automating tasks such as task assignment, tracking, and reporting can help ensure that projects are completed on time and within budget.
  • Reporting and analytics: Automating tasks such as data collection, analysis, and reporting can provide real-time insights into business performance and help identify areas for improvement.
  • Manufacturing: Automating production scheduling, work order management, and quality control can help improve efficiency and reduce costs.

4- Offers Flexibility and Scalability

Cloud-based ERP empowers businesses to adapt to the dynamic environment and be agile. Here’s how. 

  • The flexibility of access: Cloud-based ERP systems can be accessed from anywhere with an internet connection, which means that employees can work remotely or on the go. This allows for greater flexibility regarding where and how employees access and use the system.
  • Faster deployment: Cloud-based ERP systems can be deployed quickly and easily without expensive hardware or software. This means businesses can get up and running with an ERP system in days or weeks rather than months or years.
  • Scalability of resources: Cloud-based ERP systems can easily scale to accommodate the changing needs of a business. This means businesses can add or remove users, storage, and other resources as needed without making significant changes to their IT infrastructure.
  • Scalability of functionality: Cloud-based ERP systems can provide a wide range of features, from basic financial management to advanced supply chain management. Businesses can start small and add functionality as they grow without investing in a large, all-in-one system.

5- Ensures Data Security

With the rise in cyberattacks, data security will be a major concern in 2023. However, cloud vendors have built-in security measures to safeguard your data. Besides, cloud vendors offer enterprise-grade security and compliance that is beyond what companies can ensure internally. 

For instance, cloud ERP systems have features like, 

  • Data encryption 
  • Monitoring response times  
  • Malware monitoring and protection 
  • Regular backups and disaster recovery
  • Intrusion prevention  
  • Securing physical locations where cloud servers are based  

 6- Access to Improved Business Intelligence Capabilities

Business intelligence (BI) capabilities are integrated into many ERP systems to help businesses make more informed decisions by providing them with real-time data and analytics.

BI capabilities in ERP systems help businesses improve decision-making. They provide organizations with real-time data and analytics, enabling them to make more informed decisions. Besides, BI tools provide organizations with a clear view of their operations, allowing them to identify issues and opportunities quickly.

Advanced ERP systems can forecast future trends and demand, which can be used to make better decisions about inventory and production. This helps companies streamline their operations, increasing efficiency and cost savings.

BI tools in ERP systems can also give businesses valuable insights into customer behavior and preferences. As a result, they can use it to improve customer service and increase customer satisfaction.

7- Simplifies Compliance 

Depending on your industry, you might need to comply with several laws and regulations. For instance, healthcare, defense, and finance industries are a few highly-regulated industries. Companies are required to maintain extensive knowledge of ever-changing local and international laws. They must then update their system to reflect those changes. 

However, cloud ERP vendors are proactive about complying with local and international regulations, such as HIPAA, GDPR, GAAP, and IFRS. Other laws will also be integrated into the system if you choose industry-specific ERP. 

Besides, many ERP systems have localization features. This means you can effortlessly switch between different countries’ regulations to facilitate global operations. 

8- Provides On-the-Go Access

Mobile ERP allows you to access and manage ERP data and functions using mobile devices such as smartphones and tablets. This means employees can access and update data and complete tasks irrespective of where they are. This can help increase productivity and reduce the time required to complete tasks.

Furthermore, mobile ERP gives businesses real-time access to data and information, helping them make more informed decisions. This can be especially useful for departments that rely on real-time data to make decisions, such as inventory or supply chain.

Another way mobile ERP helps businesses is by improving collaboration among employees. They can share and collaborate on documents in real time, speeding up the entire process. 

9- Frees Up Resources for Company Improvement

Cloud-based ERP systems help companies minimize overhead and make better use of current resources. They can automate tedious tasks, freeing employees’ time for more value-adding tasks. Besides, the IT team can focus on streamlining other processes instead of maintaining the ERP. 

As a result, businesses see an increase in productivity and employee efficiency after switching to cloud ERP. For small and mid-sized companies, less cumbersome onsite management enables greater speed and mobility of processes. 

Wrapping Up

Choosing cloud-based ERP helps reduce operational costs, frees internal resources, and offers flexibility. Besides, it empowers companies to keep up with the changing business dynamics and customer expectations. An ERP with business intelligence capabilities can help organizations gather actionable insights and make more informed decisions. 

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