The primary observations from more than 700 different small- and medium-sized enterprises (SME) organizations in the United Kingdom were highlighted in a survey conducted by the Enterprise Research Centre. The survey report indicates that these organizations currently face many challenges, and lists their key goals, especially in the following areas:
1. Meeting the market demands of ever-increasing standards of service (quality)
2. Achieving enhanced productivity at optimal cost levels (cost and efficiency management)
3. Maintaining the current operational standards (since any major change leads to high costs) without compromising on business goals
4. Staying ahead of the competition in the business landscape with new products and services (innovation)
ERPs can enable these organizations to some extent in solving their challenges and meet their goals. However, their systems and functions need to be implemented and supported carefully towards achieving these goals. The survey also says that when SMEs think of ERP software, they think of it as being too expensive for their use. However, there is a paradigm shift in the way technology is influencing businesses in the ERP industry, thus leading to a multitude of SME-friendly options that the ERP ecosystem has introduced into the SME sector.
Hence, although ERP, at its core, is an expensive investment, at the outset, there are affordable ERP models that SMEs can invest in. In the current market scenario, two forms of ERP implementations have become common options: the on-premise model and the on-cloud (SaaS-based) model. While large organizations have deployed on-premise ERPs, many SMEs have started adopting the cloud ERP model. Cloud ERP delivers maximum advantage to SMEs in terms of huge savings in cost and improved service and functional areas of their business processes.
Here are the top 5 benefits of a cloud ERP solution:
1. Increased efficiency
An SME can achieve great business efficiency by doing things in the right way with optimized resources to get maximum results. ERP on cloud is transforming the organizations in many areas by automating various processes wherever possible and therefore bringing business efficiency. Carefully implemented cloud-based ERPs will ensure maximum productivity from every employee operating across various business processes. Each task can be carefully configured to avoid multitasking errors, duplication and loss of information. Cloud-based ERPs eliminates ineffective and disjointed systems that would otherwise shrink your bottom line and at the same time enable the SME to provide optimized process efficiencies, growth and customer experience.
2. Advantages due to decreased cost
Every entrepreneur knows that efficiency means cost savings. Cost is an essential factor in deciding budgets for ERP. SMEs that have already implemented ERPs spend up to 70% of their IT budgets on maintaining internal systems for hardware, software and staff. On the other hand, cloud-based ERP cuts the cost of hardware and associated software, as well as the need for a dedicated IT staff. As a result, one would not have to pay a huge capital but there would only be operational expenditures as they have to pay for a subscription service. Owing to this shift towards fewer upfront investments, reduced spend on infrastructure and savings of capital, organizations can easily divert these funds and improve other operational areas.
3. Eliminate paperwork in operations
ERP on cloud can play a significant role in the reduction of paper, streamlined operations, and environmental conservation. Digitization of all the major processes, such as accounts invoicing, collections, payables, purchase and inventory, will lead to the elimination of paperwork. A typical office/factory set up that is heavily dependent on paperwork brings mess and clutter. This error-prone practice can be eliminated with Cloud ERP which enables the storage of documents and reports where they can be easily searched, retrieved and shared quickly with others. This digitization of the manual process and paper records can cause improved efficiency, cost-cutting, savings and also support the green initiatives of global warming.
4. Make informed business decisions
One of the prime factors for strategic decision making in this fast-changing competitive business world is making quick and right decisions. In reality, business leaders are not able to make the right decisions due to a lack of trust in the data that they get from disparate systems. Due to the lack of standardized processes and clear insights, they have to become ‘guess takers’ and not decision makers. However, an end-to-end ERP seamlessly integrated across all business processes on cloud can securely ensure that business leaders and operational staff make more informed decisions and foster innovative ideas.
5. Better inventory management
A major problem for SMEs that are not using cloud-based ERPs is that they have to manage their business operations with paper-intensive inventory checking and tallying.ERP on cloud provides the use of online inventory management, which can save a huge amount of time. Operations management using a centralized system not only reduces duplication but also automates everyday tasks. This translates into increased production and more accurate outputs in less time. Cloud ERP will provide an optimized and standardized process (Such as JIT) with best inventory modules, which will reduce the inventory-carrying cost. This results in a reduction in costs and improved efficiencies, hence allowing the organization to get products to the customer on time at less cost.
ERP has transformed the pace of the entire business landscape, bringing in exponential improvements in operational efficiency and streamlining every business functionality. While large-scale organizations have found tremendous success with high-end ERP solutions that have catapulted them into becoming market leaders, the SMEs have found it tough to keep up with this intense pace of competition.
Cloud ERP software has come in as a timely saviour for such organizations who seek to achieve all the benefits that ERP has to offer but at a reduced cost. With brilliant operational advantages available to them, SMEs are indeed beginning to see the benefits that cloud-based ERP solutions are delivering in terms of cost savings, reduced paperwork, increased accuracy, reduced turnaround times, improved inventory management, and enhanced efficiencies across all operational functionalities. All these advantages are helping SMEs take smart business decisions with confidence. But the critical differentiator in making the move into the cloud-based ERP world is to ensure that you have the right technology partner.