7 Reasons Why Cloud-Based ERP Can Benefit Your Business

Rashed 4 April 2012 0

Software as a Service (SaaS), the cloud-based business solution has been used by many businesses for years. Those involved in CRM (Customer Relationship Management) and HCM (Human Captial Management) have had many beneficial years using SaaS. Many, though, have shied away from the implementation of ERP (Enterprise Resource Planning) as a source for cloud-based solutions due to their hesitation surrounding the security of these systems. Over the past years, however, it has emerged that these cloud-based solutions can actually be a more secure option than the more traditional on-premise solutions.

The worldwide spend for cloud-based ERP systems is growing year on year and according to Forrester Research, by 2015 will have increased by 21% globally.

So what are the advantages for your business to implement cloud-based ERP?

There are 7 main attributes to cloud based ERP systems as detailed below:

1.       The low initial and predictable future costs allow for even the smallest of businesses to factor this type of system into their business model. As the SaaS system is provided on a subscription basis, the software becomes a monthly outgoing that can be easily monitored. Additionally, the SaaS vendors provide the assurance that there will be no unexpected large fee increases introduced to continue to use the software which is supported by their fee capping policy.

2.       The hosting and management of the SaaS solution is all controlled by the vendor, allowing for faster implementation and an improved time to value ratio. The sole focus of implementation is the configuration of the system and data importing if needed. The advanced SaaS systems come preconfigured based on best practice guidelines that can further simplify the process. As customers invest a little upfront and the process is so fast to set up, the customer can begin receiving much improved ROI in a very short time. This is excellent news for the business.

3.       With the use of a cloud-based SaaS solution, the customer only pays for the users who will actually use the software. This can save quite a bit of money as the business no longer needs to invest extra money in extra resources and technology needed to support an in-house system. As the needs of the business expand, it is simple to just add extra users to the cloud-based system. Costs can also be saved with a shared, multitenant SaaS model through the use of a shared data centre, network and management services due to the economies of scale.

4.       Typically the SaaS vendors can provide a reliability that exceeds that offered by IT departments within a business. Performance, reliability, and security are all improved due to greater investments in these areas based on the economies of scale model. Most SaaS vendors provide assurance of up to 99.5% on system availability.

5.       If there is a problem with an in-house system it could be one of many issues; there could be hardware issues, software, network or other component problems that the remote site has no visibility into. This can make finding the solution difficult. In an SaaS environment, the entire system is controlled and maintained by the vendor allowing high levels of visibility throughout creating a faster and more efficient service.

6.       The burden of managing and updating the system is transferred from customer to vendor this includes managing operating systems, networks, databases, storage, application servers, backup services, disaster recovery and web servers.  The requirement for the customer to update any outdated sections of infrastructure is eliminated. The vendor takes responsibility for all upgrades when required to ensure the system is always up to date and running on the latest software.

7.       The final and perhaps most important benefit to using SaaS is that it frees up the business owner and managers from having the responsibility of maintaining and managing the system and allows them to focus on other areas of business. Paying more attention to staff and their needs as well as devoting time to developing the core business and any new strategic opportunities is all possible.


Rashed (2 Posts)

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