Business Automation and Software Blog

For Manufacturing, Cloud ERP is More Effective

Posted by Robert Baran on Tue, Dec 15, 2015 @ 11:00 AM

Best-in-class manufacturers are moving to the cloud as a standard for enterprise resource planning (ERP) implementation. The accessibility and scalability of cloud applications drives lower costs and faster ERP implementations.

Cloud applications are maturing and are rapidly becoming entrenched in IT departments across the country. More than half of US companies now use some form of cloud software and many more are making plans to move additional systems to the web. Organizations that began with simple cloud-based reporting are now moving toward putting their core software on the web, including cloud ERP.

According to an Aberdeen Group study, manufacturers that have chosen SaaS for their ERP deployments are more effective and productive than those that have an on-premises ERP installation. These companies reported improvements directly related to their ERP solution. While on-premises installations offer significant benefits, SaaS installations offer more. In particular, there is a greater financial benefit to SaaS due to a reduction in operational and administrative costs. In addition, SaaS installations saw a greater improvement in inventory operations and product shipments.

SaaS ERP Reduces Inventory and Administrative Costs

In your ERP selection, you should consider the following benefits of choosing web-based deployment.

Lower Costs, Faster ROI

With a manufacturing cloud ERP model, upfront costs and on-going maintenance costs are reduced, providing a faster Return on Investment (ROI). The SaaS ERP implementation, on average, pays for itself within two years, while the on-premises ERP installation requires 31 months. If you do not have an internal technology infrastructure or your own IT team to maintain your software, a cloud-based model offers a more cost-effective means to implementing an ERP. On-premises implementation projects are more likely to go over budget with unforeseen costs. When your ERP is hosted elsewhere, you greatly reduce the cost needed to keep your technology infrastructure current. With a SaaS deployment, you gain all of these benefits, plus you only pay for the application as you use it.

Faster Implementation and Upgrades

Because you do not need to purchase and install on-site technology, the cloud ERP installation can be executed more quickly with less disruption to your business. The Aberdeen Group study found that implementing SaaS ERP, on average, took only seven months compared to eleven months for an on-premises solution. With the SaaS model, you receive new features and functionality as they are available because you can automatically receive updates from your vendor.

More Flexibility, Scalability, and Accessibility

A manufacturing cloud ERP provides access from any device on any platform without expensive software or customization. This model is especially valuable when you have multiple locations that need access to real-time updates and reports. Cloud applications increase the ability to collaborate among a global workforce, enable more agile decisions, and promote common organizational standards.

Enhanced Security and Backup

While security is a concern for any system connected to the Internet, your data can be even more secure when hosted by a provider who can offer the latest technology to secure facilities and networks. A capable hosting site will also include disaster recovery plans.

If you are intrigued by these benefits of cloud ERP and would like to learn more, download our free whitepaper, “SaaS and Cloud ERP Observations: Is Cloud ERP Right for You?”

PositiveVision excels at finding the right technology to match your specific manufacturing software needs. We offer cloud-based solutions that can assist you in reducing unnecessary costs as well as help you compete at a higher level. Contact us to learn more.

Topics: ERP Selection, manufacturing cloud