In the past few years, small businesses are making the choice to switch to a cloud ERP system for managing inventory and sales. In doing so, the question arises as to whether it is justifiable to run your crucial business software in someone else’s server and over the internet instead of having it installed on your own computers. To answer this question we will attempt to break down the criteria used to select inventory management software and see how well cloud ERP meets each criterion.
The answers to the following questions should help shed light on why it can be advantageous to use a cloud ERP solution for your inventory management and sales needs:
1. Isn’t it dangerous to store all sensitive business information somewhere other than the physical confines of the business itself?
Not really. Given that most cloud ERP vendors are in the specific business of offering secure ERP software or outsourcing this service to even better accredited experts (e.g., Amazon), sensitive business information is likely to stay protected. The alternative would be for the business to place its own security layers around its data – something most businesses are not qualified or willing to spend money on.
2. What if the vendor’s servers go down or internet connectivity is lost? Does that mean the business will suffer downtime?
Some amount of downtime is unavoidable whether on the cloud or on-premise because maintenance has to take place when software or hardware fails. Fortunately, cloud ERP vendors (and their affiliates) are in the business of eliminating downtime so they are in a good position to ensure ERP software runs smoothly. The business, on the other hand, would have to buy expensive software license agreements with its on-premise ERP software to have availability levels comparable to cloud ERP.
3. Can cloud ERP address the complexities involved with handling more than one location?
Yes, and in fact, cloud ERP software is ideal for multi-location companies. The software is accessible from a browser so the exact location that the browser is opened from is irrelevant. As long as ERP implementation involves the definition of all appropriate business data (products, locations, suppliers, clients, inventory levels, etc.), the business gets a ‘free,’ seamless coordination across locations without the need for further customization.
4. How well does cloud ERP perform in the modern, always-on-the-move world of smartphones?
Following up on the previous point of cloud ERP being location-independent, it is also irrelevant whether or not the software is accessed while on the move. Using a dedicated smartphone application or accessing the desktop browser version from a mobile device allows for employees to perform their duties seamlessly whether in the field, at a conference or at a remote point in the company’s warehouse – as long as they have internet access. So again, for ‘free,’ a business can enjoy a significant benefit which allows for even more efficiency.
5. Won’t employees who are required to learn something new face a steep learning curve in order to fully adapt?
Cloud ERP is based on a modern approach to usability and is increasingly modeled after consumer-facing software (i.e., Google, Facebook, etc.), which usually is the easiest and most intuitive to learn. Employees are more likely to feel at home using modern, cloud-based ERP software than on-premise software. What’s more, cloud ERP vendors tend to better understand the value of good design and they push design upgrades more often than on-premise software vendors, who place a higher priority on features.
6. Isn’t paying a subscription more expensive in the long-term compared to a one-off implementation fee?
The matter of cost is a very complex one and is definitely not limited to comparing two numbers. There’s also the cost of managing the change from the existing system to the new system, the cost of maintaining the two systems and the cost of expanding them. Maintenance is free in the cloud, and expansion results in a change of pricing only in cases of a significant increase in value-added features. Furthermore, if all the features inherent to cloud ERP software (mobility, multi-location, uptime, security, etc.), are purchased from an on-premise solution provider, they are bound to cost more.
These are but a sample of the advantages of using a cloud-based inventory management solution. Can you think of others?
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