Times have changed. Technology is no longer a simple utility which helps individuals perform their day to day activities, it has become a prerequisite or even a necessity in the business world where firms with a sustainable competitive advantage are seen to perform comparably better than their peers. Organizations which recognize this and leverage the opportunity, go on to become leaders in their respective industries.

ERP, a tool which helps firms unlock their business potential, has been one of those factors which turns out to be a competitive advantage to its users. Although the benefits of implementing an ERP system is well known across the business world, how sustainable is it?

As businesses grow big, the IT support required for maintaining the on premise ERP system also grow. This means a significant increase in the IT staffing, IT infrastructure for housing servers, additional computer equipment and cooling systems and that the Capex (Capital Expenditure) involved in expanding ERP functionalities is never ending, thereby becoming a long lasting liability. So now what can firms do to avoid such adverse situations?

Cloud based ERP is the answer. A cloud based ERP connects your business with remote servers over the internet, thereby eradicating the need for expansion of the IT infrastructure. Therefore, Cloud based ERP solutions require little to zero Capex. Cloud based ERP solutions are generally consumed on a subscription basis, thereby requiring no major upfront investments for both software licenses and hardware. Cloud based ERP service vendors also provide adequate training and tech support to employees on how to use and maintain the ERP system.

Cloud based ERP frees employees from a specific location or computer. It allows “On the Go” access from approved systems/devices to the various modules of the ERP system. This is a welcome change as ERP vendors can now finally take advantage of iOS and Android Ecosystems with their own mobile ERP applications. Contrary to popular belief, data on vendors’ cloud servers are more secure than on your business’ servers. Cloud based ERP solutions are a lot more flexible compared to traditional on premise ERP system as scaling capacity both up and down can be done without additional infrastructure costs. You will only be paying for what you consume.

Popular fact is that most businesses will be operating on a hybrid ERP environment, where some are legacy ERP applications and some are cloud based ERP applications. But the imperative thing is to identify and establish systems where your goal is to achieve long-term cost reductions in your company’s technological expense structure. Cloud based ERP solutions are one way to achieve that goal.

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