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Enterprise Resource Planning (ERP) solutions have become the backbone of businesses across industries. They allow companies to manage critical business functions like manufacturing, supply chain, sales and marketing, finance and accounting, vendor management, and maintaining robust and long-lasting customer relationships. Businesses need to know that they can implement ERP systems in two ways — On-Premise and On-Cloud.
The On-Premise ERP system is stationed in the company’s headquarters and allows free flow of information between various business departments. While it provides advantages such as enhanced data security, it is immobile. It means that if your salesperson requires the customer’s documents for identity verification, he will have to visit the customer’s place, collect the papers, bring them back to the office, and finally store them in the ERP system.
On the other hand, On-Cloud ERP software allows the salesperson to upload all the essential documents from the customer’s place itself, saving a lot of time.
Do you remember the ERP implementation disaster that happened at Nestle in the early 2000s? ERP systems have a habit of cost overruns that can hurt your company’s overall financial situation.
With the introduction of SaaS (Software as a Service) based software solutions, you can dodge the massive implementation costs that weren’t possible with On-Premise ERP solutions. Typically, you will save the following three expenses:
a. Labor cost
b. Hardware and infrastructure cost
c. Employee training cost
With these three components removed, you will save a significant amount of implementation cost. If you are a small business and don’t have enough funds to build a separate server room or maintain a large IT staff, On-Cloud ERP solutions are your way ahead.
Implementing an On-Premise ERP system takes anywhere between 6 months to 2 years, depending upon the complexity. It also disturbs the everyday functioning of each department and results in innovation halts and production stoppages. The IT department undergoes the most significant impact as they have to:
a. Understand the nitty-gritty of each function.
b. Train the employees working in other business departments.
c. Monitor the implementation process 24/7.
d. Interact with the vendor continuously.
On the other hand, implementing an On-Cloud ERP system takes about 4 to 6 weeks. It’s a significant advantage for small businesses that don’t have the required time, resources, infrastructure, and technical staff necessary for implementing an On-Premise ERP system.
ERP systems provide a 360-degree view of all business activities. On-Cloud ERP software takes it a notch higher by providing the following services:
a. Increase cooperation, transparency, and accountability by destroying data silos that restrict the free flow of information from one department to another.
b. Facilitate better communication strategies that increase customer loyalty.
c. Project management tools that provide comprehensive reports to authorized personnel on time.
d. Maintain excellent relations with vendors/suppliers/distributors, thereby increasing the chances of getting substantial discounts.
e. Monitor incoming and outgoing inventory in the warehouse.
f. Resource management options eliminate waste and provide financial visibility that helps managers to gain situational awareness.
Many experts claim that On-Premise ERP systems provide better security features than on-Cloud ERP systems. While this is true in some cases, On-Cloud ERP systems are quickly catching up. The following points explain how:
a. They provide automatic security updates that don’t require any additional steps from the user’s side.
b. They have several redundant layers of backups and fail-safes.
c. On-Cloud vendors have their IT experts team, so you don’t need to maintain your own IT staff.
On-Cloud ERP system allows the company’s employees to access and share crucial data from anywhere and anytime. It calls for increased awareness on the employees’ part as they must ensure not to send or receive data through unprotected third-party Wi-Fi networks. The best part is that On-Cloud vendors provide technical training to each employee to implement the best practices for data protection.
ERP systems require periodic updates that significantly improve their capabilities. A highly skilled IT team is needed to implement updates for On-Premise ERP systems. Sometimes, this process also experiences various production interruptions. The worst thing that can happen is incompletely applied updates that result in different software versions across multiple departments and users.
On the other hand, in On-Cloud ERP systems, software updates happen automatically from the vendor’s servers. So you don’t have to worry about keeping an IT staff. Also, system delays and version inconsistencies are significantly reduced, which offers minimal disruption to the user experience.
On-Premise ERP software solutions are legacy systems bounded by the limits of the company’s hardware, which isn’t the case with an On-Cloud ERP system.
We live in an age where technology changes every single day. The Internet of Things, Artificial Intelligence, and Machine Learning are slowly becoming the backbone of all kinds of businesses. On-Cloud ERP systems seamlessly integrate all these technologies into a single platform without any added infrastructure on labor costs. You can also purchase additional licenses or add extra users to the system whenever you decide to implement new software or recruit employees in your company respectively. These features will allow your business to expand rapidly without experiencing any operational inefficiencies and at a minimal cost.
Today, every person has a mobile device in their pocket. They have become an integral part of our lives. Imagine how useful they can be from a business point of view. On-Cloud ERP systems transform your employees’ mobile phones into powerful machines that provide access to critical business data and enable uploading essential documents from anywhere and anytime. Employees can also ask for help or guidance from their managers at the click of a button.
Mobile-enabled On-Cloud ERP systems provide the following advantages to businesses:
a. Allow instant access to the central repository that contains crucial business data 24/7.
b. Provides relevant information to the sales team that helps them think on their feet and substantially increases their chances of cracking a deal.
c. Enhances production quality and eliminates inefficiencies by providing up-to-date information from the shop floor.
In short, mobile-enabled ERP systems significantly increase collaboration between various departments. They also bridge the gap between managers and front-line executives who work in the field.
According to a survey, 64% of businesses use On-Cloud ERP systems to streamline their processes. SaaS-based ERP solutions are growing at a fast pace. It’s because they are helping businesses of all kinds to improve their productivity, increase their efficiency, reduce their operational expenses, and strengthen their market competence. Today is the best time for you to invest in an On-Cloud ERP system.
At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. To know more about it, SMS SAGE to 56767. You can also write to us at email@example.com
Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.
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