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What Are The Benefits of Cloud ERP for Business

 
2017-12-27 
Chase Dammarell 
 
In today's world, the rate at which technology evolves is staggering. This has led to revolutionary new business practices that help companies operate more efficiently than ever before. We see this in the move away from to traditional networking, and the utilization of cloud computing, which can benefit a business in many ways. Before discussing these benefits at length, there are a few terms to know.

Enterprise resource planning (ERP) - a business management software used by a company to utilize and store data from business activities

Legacy system - an outdated method, technology, computer system, or application program. If a system is classified as legacy, it is generally outdated and/or in need of replacement

Cloud computing - involves deploying groups of remote servers and software networks that allow centralized data storage and online access to computer services or resources

Software as a Service (SaaS) - model in which software is licensed on a subscription basis and is centrally hosted.

Cloud ERP is the way of the future, and companies have already begun to realize this, trading out their legacy systems to receive the numerous benefits. I will discuss four such positives here.

1. Lower Costs  

Running a business is extremely expensive, thus costs need to be minimized wherever possible. Cloud computing, which falls under the umbrella of Software as a Service, can help reduce expenses significantly. For one, capital costs are reduced because there is no need to make huge expenditures on hardware, software or licensing fees. Additionally, a company simply chooses what they want to subscribe to on a need basis, cutting out unnecessary functions. For example, a manufacturing operation should be focused on you guessed it manufacturing; however, maintaining a Legacy ERP means hiring and managing IT workers, which costs money. This also diverts focus from more important aspects of the business, which leads to the next benefit

2. Focusing on What's Important  

As I mentioned earlier, a company should be devoting resources to the most important aspects of their business. Having to manage all the various aspects of a Legacy ERP in house is difficult and uses resources. Using cloud computing, tasks can be completing in less time, with less resources, and less people. This boosts efficiency significantly and leads to a more streamlined organization.

3. Accessibility  

Cloud computing opens up new possibilities for ERP usage. The most obvious application of this benefit would be allowing some employees to work at home. The merit of telecommunication is another conversation entirely, but many companies could certainly benefit from it. Essentially, the sky is the limit because cloud computing allows one to work from anywhere. Business trips would be much more efficient with a company's ERP universally accessible. A legacy ERP is confined to the building in which it is installed, limiting the possibilities for outside work.

4. Flexibility  

A fourth benefit gained from cloud ERP is flexibility. If an organization needs to add more bandwidth or a new system, they can do so quite easily with little cost. A legacy ERP would be extremely difficult to stray from, so switching direction without issues would be next to impossible. Many companies have cited this as their primary reason for switching to cloud computing.

There are myriads of reasons for today's enterprises to switch to Cloud ERP too many to count. There are a few more benefits shown in the graphic below, which was found on the webpage of Salesforce, a successful cloud computing company. 


 
 

 

 

 

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