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Five reasons to leverage cloud ERP solutions

Five reasons to leverage cloud ERP solutions


The cloud has evolved from an emerging technology that enterprises can leverage to gain a competitive advantage, to a critical business enabler that enterprises need to leverage if they want to stay competitive, writes Monzer Tohme, Country Manager, Middle East, Infor.

Now admittedly there are still some concerns in the region around cloud that have slowed the rate of adoption, but all signs point to this changing in the near future. In fact, according to the Cisco Global Cloud Index, cloud traffic in the Middle East & Africa (MEA) region is expected to grow from 31 Exabytes in 2013 to 262 Exabytes in 2018 at a CAGR of 54% and cloud workloads are expected to grow at a CAGR of 39% for the same time period. The same report found that by 2018, Software-as-a-Service workloads will make up close 59% of all cloud workloads, representing a CAGR of 33% from 2013-2018.

It isn’t hard to understand the attractiveness of the cloud – a cloud-based ERP solution, for example, can help free up capital, provide the flexibility to meet evolving operational needs and allow you to respond to opportunities in growth markets. Also, in today’s ‘dog-eat-dog’ world, mergers and acquisitions happen very rapidly, and very frequently. Unfortunately, when two organizations merge, integration of the software, hardware, infrastructure and processes is usually an afterthought. The cloud provides a safe, efficient, and economical way to avoid disruption and creates a smoother path to synching all the IT services and applications.

Here are five reasons you should make the move to the cloud by the end of this year, or at a very least, have a cloud strategy in place:

Reduce costs

Numerous studies show that moving to the cloud can significantly reduce costs. According to Nucleus Research, cloud-based implementations typically require less development and testing resources and cloud vendors usually provide much of the appli­cation support and maintenance. As a result, organisations that deploy cloud-based applica­tions spend 40% less on consulting and 25% less on support personnel than organisations that deploy on-premise applications.

In addition, cloud-based solutions are typically more cost effective than on-premise solutions – a study byStrategy& (formerly Booz & company) found that “overall, the total cost of ownership for a cloud-based solution can be 50 to 60% less than for traditional solutions over a 10-year period.”

By freeing up capital expenses that would otherwise be devoted to implementing and maintaining an on-premise solution, you have the flexibility to re-invest these savings in to IT infrastructure, services and applications that can have tangible business value and positively affect the bottom line.

Speed time to value

With the cloud, deployments are faster, there are fewer work slowdowns during implementation and there is no need to invest capital in upgrading your infrastructure. Particularly in today’s hyper competitive world, rapid response is critical when unforeseen events take place. Unlike cloud solutions, on-premise applications aren’t easy to rapidly structure, expand, and scale up, which can put a company at a decided disadvantage.

According to Strategy &, cloud-based implementations can be up and running in as little as four to eight months vs. 12 to 36 months for on-premise solutions. Because cloud launches require less internal support—in terms of both physical infrastructure and human resources—organisations typically experience little business disruption during implementation. And without the physical infrastructure that on-premise solutions require, you don’t normally need to invest capital in new IT equipment.

Establish and Expand Operations

Cloud deployments don’t require you to install any physical infrastructure, and as such, it is significantly less expensive and less time consuming to establish a business presence in new and remote locations. If your business venture is successful, you can quickly and easily scale the solution to meet your expanding needs; and if the venture is a bust, your minimal investment in the cloud deployment for that location represents a much smaller loss than you would incur had you opted for an on-premise solution.

A cloud-based ERP solution is also much easier to update than an on-premise solution. With on-premise, the bills don’t just stop after you finally build and finish the data centre. There will be yearly maintenance, need for upgrades, power bills, cooling costs and administrative costs. In most cases, the cloud ERP vendor will automatically apply any patches or updates. This means that the solution will always be current and able to meet your business needs, processes, regulations, and requirements, as they evolve over time.

Improve efficiency

Business growth is only profitable if it’s balanced with increased inventory turns, streamlined processes, efficiency gains and other operational cost savings. Cloud solutions are ideally suited for improving the efficiency of manufacturing operations because they can help automate many of the typical steps in business processes, replace manual activities and virtually eliminate the need for duplicate data entry. For instance, automating new product development and introduction (NPDI) processes can help get your products to market quicker.

A cloud-based ERP solution can also give you a platform to allow easy collaboration between departments within the organisation, as well as externally, with your suppliers and distributors.  An enterprise-wide, cloud-based ERP system can also give you early detection capabilities and real-time access to information about capacity, availability, qualifications and materials data. As a result, you will have access to the information you need to adjust schedules and avoid potential disruptions.

Improve visibility

A cloud-based ERP system gives you complete visibility across the entire organisation. For instance, with access to information about your plant-floor resources, you can make the most effective usage of constrained resources, find areas where you can increase throughput and efficiency and promote better material and asset management. Being able to see how all of the pieces fit together—in real time—ultimately helps you operate more efficiently and make better, faster decisions.

A cloud-based ERP solution also gives you access to robust collaboration tools – these collaboration capabilities extend across your enterprise and suppliers, enabling you to identify potential problems more quickly and accurately, analyse them more thoroughly and identify solutions before they can create bottlenecks.

As you gear up to seize new growth opportunities, you need capital to invest and the infrastructure to support your organisation’s new direction. A cloud-based ERP solution delivers everything you need to free up capital and gives you the flexibility to swiftly respond to any surprises the market sends your way.

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