What is Cloud ERP and How Can It Benefit Your Company


When it comes to the difficult and hyper-competitive world of business, necessity is indeed the mother of invention. No truer thing can be said for today’s business landscape, which has quickly evolved to meet consumer demands in light of the digital revolution and crises like the COVID-19 global pandemic.

Businesses now see the value of eschewing old systems for running their operations and have chosen to explore new solutions, like cloud-driven enterprise resource planning (ERP) suites. Though the prospect of acclimatizing to new technology is always a scary one, many cloud ERP clients have been rewarded for taking the leap and are now on their way to expanding their reach in their current markets.

What sets a cloud ERP solution apart from a traditional ERP solution, and how can a company like yours benefit from the former? Here’s a treatise on what cloud ERP can offer your business, plus why you should consider onboarding a reliable new cloud ERP solution from the SAP Philippines roster of products.

What Distinguishes a Cloud ERP from a Traditional ERP?

Before cloud-driven alternatives became widely available, using a traditional ERP solution was the norm for any client business that could afford it. These ERP solutions, some of which are still in use today, require installation on a company’s on-premise hardware. They must also be housed on the company’s own servers, and their requirements are typically looked after by an in-house IT team.

The traditional ERP system may still work for large companies that want greater control and privacy over their data resources, for example, those that work in the manufacturing services sector. But for smaller companies whose operations are more lightweight, traditional ERPs are often expensive and unappealing choices. On top of their usage is limited to company headquarters, most traditional ERPs manage business data and execute business functions using independent files and reporting systems. That means that staff often have to go through file after file and system after system just to be able to manually reconcile huge volumes of data.

In contrast, a cloud ERP can be used anywhere as long as the client business has an internet connection, and it is run on a vendor’s network instead of the business’s own. Unlike traditional ERP solutions that are rather demanding on a client’s data storage and other resources, cloud-driven ERPs are highly scalable and customizable. Most cloud ERPs come with core modules for essential functions like finance and accounting, but clients can add or subtract extra modules as necessary. A business that outgrows a certain ERP function can simply remove it, while another business can ask its vendor to add an ERP module when it anticipates growth or needs to take on additional responsibilities.

Cloud ERPs are further characterized by their agility and integrability. They can fulfill key ERP functions even off-premises, which is definitely good for businesses that have adopted hybrid onsite and work-from-home setups. They are also built to integrate easily with other technologies—for example, using third-party application programming interfaces (APIs) instead of working in isolation from them. These characteristics definitely make a cloud ERP a viable choice for a client business in any fast-moving industry.

What Are the Biggest Advantages of Onboarding a Cloud ERP?

There are several other advantages to onboarding a cloud-driven ERP, the biggest of which are the following:

Lower Cost of Ownership Compared to Traditional ERPs

Most cloud-driven ERPs are cheaper out of the box compared to traditional ERPs, whose cost of ownership often eats away at clients’ budgets due to maintenance, upgrades, and licensing fees to name a few. Cloud ERPs are the best alternatives for small and medium-sized enterprises (SMEs) that want to level up their operations but only have modest budgets.

As a cloud ERP client, you will only need to pay for necessary fees like onboarding, services from the vendor, and monthly or annual subscriptions. This arrangement will make it likelier for you to get good returns from your investment in a cloud solution.

Optimized Data, Energy, and Labor Resources for Company Operations

Again, a cloud ERP needs nothing more than an internet connection and ERP software. This will free up precious data reserves for your company and minimize the amount of energy that’s needed to fulfill core business management functions.

Having a cloud ERP and round-the-clock technical support from your vendor will also lessen the amount of work that needs to be done by your in-house IT staff. The latter will have their hands freed up to focus on other matters that need their attention.

Smoother and Easier Enterprise Planning

A cloud-driven ERP solution will streamline all business data into a single source, which means that there will be fewer discrepancies between key figures like the company’s sales, accounting, and bank account balance. That, in turn, means that it won’t be as hard for your business’s leaders to make important decisions—and that decisions made on behalf of different business departments will be more in sync with each other.

Better Data Security and Data Recovery

Cloud ERPs are also boon companions for matters like data security and data recovery in the midst of disaster. Because business data is consolidated and backed up in the cloud, and because this data can be accessed on a 24/7 basis, a company will be less devastated in the wake of a major catastrophe.

Even after a disaster like a fire or a flood, an accident caused by human error, or deliberate sabotage wrought by criminal activity like hacking, cloud ERP clients can avoid prolonged business interruption and quickly get back up on their feet. It’s always better to be on the safe side when it comes to disaster response and recovery, and a cloud ERP will allow your company to utilize that approach.

Real-Time Analytics and Financial Reporting Capabilities

Lastly, even at such reasonable price points compared to traditional ERPs, cloud ERPs often come with more sophisticated real-time analytics and financial reporting capabilities. A client business can take advantage of features like real-time cash flow tracking and instant generation of financial reports that follow specific templates. With these features at your disposal, you may get faster answers on how to increase your profit margins and ultimately improve your business’s bottom line.

Takeaway: Choosing a New Cloud ERP Solution for Your Company

Cloud technology proffers many opportunities for up-and-coming businesses due to its cost-effectiveness, accessibility, and future readiness. It would be a good idea for a business to capitalize on these benefits and choose a cloud-driven ERP solution over a traditional one.

When deciding on a new cloud ERP for your company, just remember that no two solutions are alike and that successful onboarding also depends on the expertise of your vendor. Knowing that, choose a reputable brand like SAP and partner with a vendor with a solid track record for cloud ERP implementation.

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