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Posted By Firdaus on Apr 25, 2017 |

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Source https://www.linkedin.com/pulse/key-drivers-companies-moving-cloud-erp-diwakar-rai

Enterprise Resource Planning (ERP) initially improved the efficiencies of large companies and organizations. As the ERP industry has evolved and technologies have improved, the benefits of ERP are now cost-effective for medium and even smaller businesses that have a need to streamline processes.

The principal technology that has made this feasible is the evolution of cloud computing. As PC Mag writes, many businesses are accessing their data over cloud-based platforms rather than storing it all locally. Many enterprises in the small and midmarket businesses (SMB) sector have already taken to the cloud for hosting and storage. This makes ERP solutions easier and, in many cases, more cost effective to implement for the smaller company that needs to manage processes, improve communication, and create synergies within the business.

ERP software ensures the smooth functioning of inventory management, order processing, and production while tracking and controlling other aspects of the business such as payroll, cash, raw materials, and orders. It also allows for faster communication and information sharing between internal members of the company as well as business partners, suppliers, and clients.

Early ERP systems were too costly for SMBs so they mainly ended up patching together various systems in random parts of the organization, but cloud-based ERP offers several benefits to smaller companies wanting to implement ERP. Firstly, it takes away the initial cost required for non-cloud systems. There is also no need for companies to have in-house expertise to manage and maintain the hardware. All applications are hosted in the cloud and accessed via an internet connection.

The companies creating ERP systems have enjoyed this opportunity as well and have designed some innovative systems to work with the cloud. At the same time, they have come up with creative pricing structures to make ERP affordable and highly attractive to SMBs. There are several ways to pay, and pay-per-transaction pricing models often suit smaller businesses.

The entry barrier has lowered, taking away some maintenance concerns. The savings on capital expenditure can be better used to grow the business; plus, there are efficiencies achieved from having the system in place. It also makes planning and budgeting easier as ERP costs will ultimately be a percentage of turnover.

But how do you know whether your small or medium-sized business could benefit from switching to an ERP? Business.com offers four scenarios that may indicate its time to take the plunge:

Another benefit cloud offers is that as the business grows, the ERP system is very easy to adjust. It is highly adaptable so you can start with the core functionality required and add to it over time. This is particularly useful in turbulent markets where short-term futures are not secure. A small, growing company can reap the benefits of ERP without any major up-front costs or long-term, onerous obligations.

You pay only for what you need as you need it and scale it over time if necessary. This eliminates the risk of investing in software that is too small for your needs, which you outgrow quickly, or getting something more powerful than desired and underutilized. A system can even be scaled down where necessary if volume or turnover drops dramatically.

You want to select a product that is not only right for you right now but will be in the future as well. While most ERP systems are scalable, the cloud makes it a bit faster, easier, and less expensive. As the technology evolves, so does the ERP industry. Once a massive system preserved only for the largest companies, ERP is now nimble, flexible and affordable enough for all but the smallest of companies thanks to advances in cloud computing.

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Author: Firdaus

I work as an IT consultant in the Toronto area and I love to write blogs about a variety of subjects. My passion for writing stems from the desire that everyone should have access to meaningful information. Whether it is a blog about society, culture, technology, or social media, I dont want to miss the opportunity of sharing my thoughts with my friends and audience. Since I believe in mutual exchange of ideas, I am always on the lookout for a feedback on my writings.

Read more from the original source:
How Cloud Computing has Enabled SMBs to Embrace ERP - Social Barrel (blog)