Why Business Leaders Are Choosing Cloud-Based ERP

Many organisations are migrating critical business systems to the cloud in a bid to lower costs, improve accessibility and enhance security. In this article, we explore why business leaders are choosing to migrate to cloud-based ERP systems.

The author of this page: Brendan Geraghty
Brendan Geraghty, Practice Director - D365 for Financial Operations Oct 28, 2022

ERP Systems are a key technology system for many organisations, consolidating organisational information to help streamline business processes and optimise financial planning and reporting. Historically, implementing an ERP system involved an on-premise roll-out along with a significant financial investment. While on-premise ERP systems have served and continue to serve organisations well delivering a return on investment, there are some areas for improvement. This is where cloud ERP systems come in, offering many advantages over their on-premise counterparts.

In today’s working environment, many organisations are investing in cloud infrastructure and migrating critical business systems to the cloud for a multitude of reasons. In a ComputerWeekly survey of IT decision-makers, 53% agreed cloud ERP was an investment priority. Below we explore some of the top reasons why.

Access to Newer Technologies

With new business technologies emerging at a rapid pace, there are constantly new opportunities for organisations to take advantage of to help surpass the competition. New technologies such as machine learning, artificial intelligence, and advanced analytics along can help companies enhance operations, gain deeper data insights, and streamline processes. While access to these type of technology advancements might seem out of reach for many companies with significant investment and specific expertise required to use them, cloud-based systems such as cloud ERP systems allows organisations to take advantage of these new technologies without the need for the extensive physical infrastructure, costs or tech talent. Often, these new capabilities are included in cloud-based systems and are constantly updated.

Implementation Speed and Costs

Another key reason why many organisations are opting for cloud-based ERP systems is the significantly lower implementation cost in comparison to on-premise ERP implementation. According to Finance Online, an on-premise solution is about 30% more expensive than cloud technology.  Cloud-based ERP systems offer a SaaS-based model meaning users pay a subscription fee per month. These monthly payments along with an initial set-up fee still tend to work out cheaper than the on-premise ERP system. It is often the upfront cost of an ERP system that deters smaller organisations from implementing one, even if they would benefit greatly from it, they cannot justify the investment. However, cloud-based systems make ERP more accessible for these smaller organisations. In terms of setup and roll-out, cloud ERP solutions can be configured and deployed significantly faster than on-premise.

Accessibility and Scalability

In today’s hybrid or remote working environment, accessibility to critical business systems is a key consideration. Cloud ERP solutions are accessible from any location and any device with an internet connection and a browser. This allows different departments to stay connected while working from different locations or even allows organisations to access a larger talent pool since they can now enable remote workers to access the system.  Cloud ERP also offers increased scalability, with a flexible design cloud-based ERP systems can scale up and down in line with business needs. This is something that is not as seamless when it comes to on-premises.

Software Upgrades

One of the downfalls of on-premises ERP is the maintenance and upgrades. This is often the responsibility of the organisation and can be costly. However, with cloud-based ERP systems, the vendor hosts all system infrastructure meaning that the organisation no longer has to worry about the upkeep of the ERP system. The vendor maintains the servers, infrastructure and database with new updates or patches automatically pushed, usually on a monthly basis. This helps the ERP system evergreen and always up-to-date.

Security & Disaster Recovery

One of the reasons some organisations are hesitant to make the move to cloud-based ERP is due to perceived security concerns. However, this is often a misconception as the security of cloud-based ERP systems is often superior to on-premise. Today’s cloud technology is highly secure and with critical security measures built in such as multi-factor authentication and advanced encryption. Cloud servers are also located in secure and centralised facilities and cloud vendors constantly roll out updates to keep your security at the highest level possible. Also, something worth noting is the cloud’s capabilities for disaster recovery. In the event of a disaster, being able to recover lost data with as little downtime as possible is crucial however there is a higher risk for those on on-premise systems if a disaster occurs. Cloud systems are designed with this in mind with built-in disaster prevention by storing backup data and automatically shifting to backup data once a failure is detected.

If you would like to learn more about cloud-based ERP solutions such as Business Central, get in touch to speak to one of our specialists.

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