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Cloud ERP: The New Norm

Cloud hangning over computer
Posted by: Kelly Dimkovska on
March 29, 2024

In a recent webinar, our regional director, Filip Dimkovski, engaged in a comprehensive discussion on the evolving landscape of Cloud ERP systems.

In this article, we dive deeper into the key features, considerations, and advantages of Cloud ERP solutions.  We highlight why it has become the new norm for businesses worldwide.

Cloud ERP Systems

By Filip Dimkovski – Regional Director at SMC

In today’s rapidly evolving business landscape, organisations are increasingly turning to Cloud Enterprise Resource Planning (ERP) solutions to:

  • Streamline their operations
  • Enhance efficiency
  • Drive growth

This is a trend that at SMC, we have seen accelerate at a steady pace since the 2020 pandemic.

Cloud ERP, a deployment model that leverages cloud computing platforms, offers a raft of benefits over traditional on-premise systems.

Understanding Cloud ERP Software Systems

Cloud ERP involves the deployment of ERP software systems on cloud computing platforms.  This enables organisations to integrate and manage various business processes such as:

Unlike traditional on-premise solutions, Cloud ERP allows users to access the system via the internet from anywhere and on any device. This offers greater flexibility and accessibility, and a much better overall user experience. User experience has become more important since the start of the 2020 pandemic when working from home became the new norm.

One of the key advantages of Cloud ERP is its ability to eliminate the need for on-premise hardware.  It reduces IT costs significantly. Additionally, Cloud ERP provides scalability, allowing organisations to easily add or remove users and resources based on their evolving needs.

The cloud infrastructure ensures high availability, disaster recovery capabilities, and seamless system upgrades.  This enables organisations to stay up-to-date with the latest solution features and technology advancements while simplifying their overall IT footprint and de-risking their oganisations.

When to Consider Cloud ERP

Organisations should consider adopting Cloud ERP solutions under various circumstances:

  • Scalability: When there is a need to scale without worrying about infrastructure requirements. This is particularly important for businesses experiencing high growth and are transitioning from a small business with lower complexity business model to a medium-sized business with increasing complexity being introduced in its business model. At SMC, we have executed dozens of projects over the past 4 years with organisations experiencing high growth.
  • Cost Reduction: To reduce IT costs by eliminating upfront hardware and infrastructure expenses.
  • Accessibility: For increased accessibility and mobility for remote workers and field teams.
  • Real-time Collaboration: When real-time collaboration among teams and departments is essential for efficiency.
  • Data Security: When enhanced data security and compliance are required.
  • Technology Advancements: When staying up-to-date with technology advancements is a priority.

Considerations in Choosing Cloud ERP

Several factors should be considered when selecting a Cloud ERP solution:

Business Requirements

Ensure the solution meets the specific needs of the organisation. This takes into consideration; industry, size, and business processes. While many requirements are generic across organisations in the same or similar industry, each organisation should understand its unique / value-add requirements.

These need to be considered during the system selection project.

Features and Functionality

Assess the necessary features to support organisational processes effectively. If automation is key to the organisation, then a system that offers tools to automate mundane business processes and functions should be considered, over one that needs more human intervention.

Integration

Evaluate integration capabilities with other business systems. It’s unlikely that one system will fulfill all the needs of an organisation. Selecting and implementing a system that is open and easy to integrate with other solutions in real-time will be critical.

Security Measures

Verify the security measures in place to protect sensitive data and comply with regulations.

Scalability and Flexibility

Ensure the system allows for easy scalability and flexibility.

Selecting a system that can grow and evolve as the organisation grows and evolves is paramount. This will ensure that you don’t need to go through the process of selecting a new solution for some time, if at all.

User Experience

Look for a user-friendly interface and customisable dashboards.

Users want simple, clean, and easy-to-understand interfaces. Gone are the days when it was necessary for all solution features offered to be on one screen. Users demand simple-to-understand and easy-to-use screens to facilitate efficiency in executing the given system function.

Affordability

Choose a pricing model that fits the organisation’s budget.

Price will always be a driver when it comes to deciding on what solution to select. Therefore, it’s important to understand the pricing models that vendors offer and build your own total cost of ownership model. This model can help you predict overall operational expenditure for the short to medium term (3 to 5 years).

At SMC we do a lot of work with our clients in this space.  We want to ensure that they are well-educated on what’s on offer by different vendors. We have helped clients of all sizes and across many industries negotiate the most optimal licensing mode for their organisations.

Vendor Reputation

Select a reputable vendor with reliable customer support.

Today’s market is flooded with ERP systems and off-the-shelf solutions that are easy to deploy and use. However, this comes with some risk to the organisation.

Many organisations execute projects to deploy new systems without going through a detailed solution selection process with vendors who are new to the market. Ultimately, they end up with solutions that do not fit their business requirements. In some cases, these have had to be replaced. Therefore, selecting the right vendor that has been proven in the market and that has the appropriate implementation and post-implementation support structure is key.

Pros and Cons of Cloud ERP

Pros:

  • Accessibility: Accessible from anywhere with an internet connection.
  • Scalability: Easily scalable to accommodate changing business needs.
  • Cost-effectiveness: Reduces upfront hardware and infrastructure costs.
  • Automatic Updates: System upgrades are rolled out seamlessly.
  • Security: Offers robust security measures and compliance protocols.
  • Reliability: Ensures high availability and disaster recovery capabilities.

Cons:

  • Internet Connectivity: Dependency on internet connectivity for access.
  • Customisation Limitations: Limited customisation compared to on-premise solutions.
  • Dependency on Vendor: Reliance on the ERP vendor for updates and support.
  • Integration Issues: Potential challenges in integrating with other systems.
  • Data Sovereignty: Concerns regarding data sovereignty and jurisdiction.

In conclusion, Cloud ERP has emerged as the preferred choice for organisations seeking agility, scalability, and cost-effectiveness in managing their business operations. By carefully considering their requirements and selecting the right Cloud ERP solution, businesses can unlock new opportunities for growth and innovation in today’s digital era.

If you would like to discuss how SMC and one of our ERP Consultants could assist you, please book a free discovery call.