Cloud ERP Systems: Benefits of Cloud ERP For Your Business

Did you know that more than half (53%) of businesses with ERP software use cloud-based solutions rather than on-premise enterprise platforms? Cloud ERP systems let you focus on implementing growth initiatives as you’ll be spending less time on day to day IT management. 

It’s an interesting time in the world and businesses have been presented with the opportunity to keep doing things the way they’ve always done or embrace new technology and step boldly into the future. But what is a cloud ERP system, what type of organisations do they suit and what else do they have to offer businesses?

What is a Cloud ERP system and how does it work? 

Before we discuss a cloud ERP, what is an ERP system? 

What is an Enterprise Resource Planning (ERP) system? 

An ERP is software designed to improve the efficiency of your internal business processes by automating and integrating tasks such as financial management, expense management, warehouse management and other essential business functions. Traditionally, you would run all or some of these functions using different software systems and would need to integrate them at some stage so they could work together. As with all digital technology, that was a good workaround when it was the only thing available. But today’s software systems allow full ERP integration within a single suite. An ERP allows your company to operate all core functions seamlessly from a shared business management ERP software package.  

A business can implement an ERP on-premises or as a cloud based product. 

What is a cloud-based ERP system? 

Cloud-based computing, also known as SaaS (Software as a Service) lets users access software applications via the internet. The resources usually needed to run this software – servers, processors, storage, memory etc – are maintained and managed off-site.  

Cloud ERP, which can also be known as a SaaS, lets businesses access ERP software online in much the same way with the software being delivered typically on the service provider’s cloud computing platform. It’s important to note that none of the resources used to deliver the software to the business are owned by the business.  

A cloud ERP system means real time and relevant data and information is available to all stakeholders across the business, whether they’re working in an office, out in the field, remotely or even overseas. If they have an internet connection and a browser, they can work from whatever mobile devise they prefer to use.  

Types of Cloud ERP Software 

When it comes to cloud ERP systems for small business, there are three main types.  

On-premise, or private, cloud ERP  

Your business owns and manages the servers and software and is responsible for maintenance, updates and upgrades. Similar to an on-premises ERP system but cloud based. You can choose whether to run a hybrid-cloud ERP solution or host your entire ERP solution on a private cloud.  

The private cloud option will generally require a substantial initial investment and there will also be annual fees and charges. It’s a big commitment and one that should be carefully considered before investing. However, as you own both the hardware and software, your business does retain full control. 

Multi-tenant SaaS ERP  

The most common small business option because the cloud provider, or vendor, is responsible for managing everything including, hardware, software, maintenance, patches and upgrades. This cloud ERP system can be put into action quickly, meaning less downtime or hassle for your business but your business doesn’t own the software and your data is stored in a public cloud. Hosting in a public cloud makes some businesses feel as it their data is less secure, but data breaches in a public cloud are rare. Deciding if you data should be stored in a public or private cloud will depend on your business requirements and what you feel comfortable with. 

Patches – small behind the scenes fixes – updates and upgrades are automatically applied helping resolve issues before your IT team needs to be involved or it impacts your business in any way. The great news is all this will be covered by your monthly or annual subscription fee.  

While there’s no upfront costs involved, SaaS is subscription based meaning you will never own the software and it may lack the capability to be fully customised for your business.  

Hybrid, or proprietary, cloud 

Similar to the private cloud except you can choose a combination of private cloud and SaaS ERP solutions but this will depend on the vendor. Your business will be able to choose to have patches automatically applied, or applied only after approval from your IT team. Technically, as the ERP vendor is hosting the data, it’s still essentially a private cloud but with clarity around accountability and who is responsible for what.  

Of the three main small business cloud ERP system options, the private cloud is the most customisable. Offering a range of functionality due to its integration capabilities, you can create a cloud ERP solution perfectly tailored to your business needs.

Components of Cloud ERP Software 

All cloud ERP systems consist of core financial and accounting components but the features you choose for your business will depend largely on your industry and business needs. However, some common cloud ERP system features include: 

• Real time business and operational information – including accounting software and procurement and the sharing data between departments. 
• Real time business assessment. 
• Supply chain management – purchasing orders, order management, warehouse management monitoring quality and compliance.  
• Central services knowledge base – including HR and payroll. 
• Human resources – manage your people including rosters, wage and leave requests. 
• Inventory management – never hold too much or too little stock again with an automated re-ordering system and notifications when stock runs low.  
• Manage payroll, employee info and superannuation. 
• Financial management – keep track of spending and budgets across the business from a single software system.  
• The ability to create business-wide marketing and sales campaigns and strategies. 
• Reduce or even dispense with redundant and inefficient processes, tasks and procedures. 
• CRM management – CRM integration into your ERP. 

Benefits of Cloud ERP Software 

The benefits of using ERP software for your business will depend largely on what you’re looking to achieve but taking it a step further and moving your ERP system into cloud may bring extra and unexpected benefits to your business. 

Access to next generation tech - Without having to bother buying new hardware of software, you’ll be automatically upgraded to the latest and most advanced technologies, tech you may not otherwise be able to use so quickly. 

Upgrading your existing system – when you make the move into the cloud, you might be breathing new life into your existing system, effectively extending its working life. 

Reducing third party dependence – as you move your ERP into the cloud, you’ll be cutting out many of the third party software or applications you were still using with previous integrations.  

Security - cloud service providers have full time, 24/7 security teams who are always monitoring your system while staying up to date with new cloud security issues or threats. 

Data security – data stored in the cloud is likely to be stored across many servers meaning there’s no single point of failure should anything go wrong. This should be of particular interest if your business collects and stores sensitive customer information and data.  

Attract and retain talent – the world is currently in the midst of a skills shortage crisis so being able to attract – and retain – the best talent in your industry is a must. Younger generations of workers want cloud access, they want to come to work and use the latest tech. 

Access anywhere – post pandemic workers want to work remotely. Using a cloud ERP system means you can set remote, hybrid and in office worker up with ease. No more buying clunky hardware or having employees install hardware on their device of choice. Cloud based ERP will also mean workers can jump between devices. 

Scalability - cloud ERP systems operate on remote servers meaning it’s easy to add extra resources if your business starts to scale rapidly. No need to have your IT team working overtime or being caught off guard if business increases suddenly and your outdate ERP system begins struggling to keep up.  

Staying ahead of competitors – with use of cloud ERP systems only increasing, stay one step ahead of your competitors by adopting the tech early and when they decide to make the move, they’ll be playing catch up with your business continues to scale. 

Cloud ERP vs On-Premises ERP 

When it comes to cloud ERP system vs on-premises ERP, the benefits will depend on your business, but there are a few common reasons:  

• Lower upfront costs because you don’t need to buy hardware or software 
• Ongoing costs will be predictable and, depending on the type of cloud ERP system you use, you may only have to pay for users who access the system  
• Quick and easy to get up and running meaning less downtime for your business 
• Automatic software patches, upgrades and updates meaning your business will always be operating with the latest tech   
• A cloud-based platform will likely offer better security, greater data storage resilience and business continuity functions than most businesses could provide  
• Due to the constantly updated functionality and easy customisation, you can scale rapidly, safe in the knowledge your cloud ERP system will be able to keep up.  

Why Cloud ERP Systems Are Perfect for Mid-Sized Companies 

Big business has seen the benefits of ERP systems for a long time and now, with cloud-based platforms offering small to medium sized businesses affordable cloud ERP systems, it’s time to take your business to the next level. With low upfront and ongoing costs, safe secure and infinitely scalable ERP systems are within the reach of even the most modest operator. Sure, there will be businesses who really don’t need to extend much beyond a CRM, but most will see almost immediate benefits of moving their ERP system into the cloud.  

Everything at your fingertips 

No more guesswork. No more waiting for reports or data to arrive in your inbox. A cloud ERP system will offer real time reporting and analytics meaning you can check your business heartbeat anywhere, anytime.   

Scale with confidence 

In this world of social media and viral videos, a business can literally go from zero to hero overnight. While that’s unlikely to happen to most business owners, if the pandemic has taught us anything it’s to be prepared for anything. A cloud ERP system will be ready to scale as slowly or rapidly as your business needs.  

Integration of CRM & ERP Systems 

It’s possible to integrate your CRM with your cloud ERP system. While an integrated CRM and ERP system will have limited capabilities compared with a standalone CRM, some businesses only require a basic CRM making it an ideal business solution. As both systems share data, it might be worth considering whether it’s worth keeping two systems active when you could just use one.  

As your organisation grows, outdated processes and disconnected systems can begin to cause issues, adding avoidable costs, risks and delays to your business bottom line. When you switch to a smarter, more integrated financial management software system, you’ll have greater financial control and the power to grow with confidence. 

The difference between ERP and financials 

During your research, you may have noticed ‘financials’ and ERP being used interchangeably, but they’re not the same thing. Financials are modules within an ERP and relate to the financial business functions with a business or company. They include things like accounting, payables and receivables, invoicing and credit control, revenue management, billing, expense management, project management, asset management etc. 

The financials focus on just one area of the business, while ERP systems covers a range of business processes, including financials. 

Access Financials is a comprehensive and modern accounting solution. Bringing your accounting operations into one central place makes your business more efficient, more in control and gives you real-time visibility and insight across your entire organisation. 

Move to a smarter, more integrated financial management software system and book a demo today.