Small and medium-sized businesses (SMBs) often grapple with resource constraints and operational challenges that can impede growth and efficiency. In the manufacturing industry, cloud ERP solutions offer a way to overcome these hurdles by streamlining processes and enhancing flexibility.
Here are some key signs that your SMB might benefit from cloud ERP manufacturing software:
1. Server and hardware costs are too high
Implementing a cloud ERP for manufacturing allows SMBs to concentrate their resources on core business activities rather than IT infrastructure. Benefits include:
- No server hardware purchases or maintenance: Eliminate the need for expensive server hardware and the ongoing maintenance costs associated with it. Server costs can be in excess of $50,000 with the virtualized servers required by a modern ERP.
- No database and operating system costs: Avoid the annual costs of purchasing and maintaining databases and operating systems. SQL Server licenses can be significant and compatibility issues can arise as well.
- Simplified client requirements: Rely only a browser with a true cloud application, unlike on-premise software that requires specific client hardware specifications. It is costly from both a hardware perspective as well as ongoing maintenance to ensure updates and patches are applied to each client.
2. System updates are slow and maintenance is subpar
A significant benefit of cloud ERP manufacturing software is the elimination of upgrade hassles:
- No upgrades required: True SaaS applications ensure you’re always on the latest version, accessing the newest functionalities without the burden of manual upgrades.
- Disaster recovery and backups: These are managed by the ERP provider, freeing your internal IT resources and ensuring high availability and data security.
3. Remote work capabilities aren’t supported
Many manufacturers now have hybrid workforces, with significant remote components. Cloud ERP systems support this by:
- Facilitating remote access: Employees can access the ERP from anywhere, eliminating the need for complex and costly remote desktop setups.
- Improving security: Cloud providers like AWS often offer better security than local networks, reducing the risk of ransomware attacks.
4. Business scalability is limited
Cloud ERP systems are perfect for growing businesses as they allow for easy addition of new users, warehouses, or locations. This scalability is crucial for:
- Supporting manufacturing expansion: Adding new sites or expanding operations is seamless with cloud ERP.
- Providing a comprehensive solution: Systems like Infor CloudSuite ERP offer bundled functionalities, providing a larger functional footprint and reducing the need for third-party add-ons.
5. Your company’s valuation should be higher
- Improving the company’s sale value: Having a modern, cloud-based ERP can increase your company’s value, especially if you are looking to attract private equity investment. Modern ERP systems are often among the first upgrades PE groups implement.
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Why manufacturers might NOT want cloud ERP
While cloud ERP solutions offer numerous benefits, there are also valid situations in which some manufacturing SMBs may want on-premise:
- Security concerns: Despite robust security measures, some businesses are wary of potential breaches and data loss in the cloud.
- Connectivity issues: Cloud ERP requires a reliable internet connection. Any connectivity problems can disrupt access to the system, impacting productivity.
- Customization limitations: Some cloud ERPs may not offer the level of customization that on-premise systems can, making it harder to tailor the software to specific business needs.
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For more insights into cloud ERP benefits and implementation, check out our other articles:
By carefully weighing these factors, SMBs can make a more informed decision about whether a cloud ERP solution aligns with their specific operational and financial requirements.
For a more a free 30-minute consultation to discuss options for ERP deployment for your business please reach out for a free consultation.