Cloud computing has become a prominent tool for all businesses around the country. The cloud is being increasingly turned to for various functions and purposes, including enterprise resource planning. The recently released Microsoft Dynamics NAV 2015 plays to this role of being software as a service. However, many manufacturers, especially those who have only begun to consider changing ERP platforms in the wake of recovering from the Great Recession, are hesitant to join the cloud. There may be many reasons for this, including cost and uncertainty. So here are some reminders why it's important to at least consider the idea of switching from on-premises to cloud-based ERP solutions.
- It's affordable
One of the most important factors that affect a company's choice in determining which ERP solution to use is cost, plain and simple. With many software solutions that are installed on the premises, there are significant upfront costs to factor in, including purchasing new hardware, undergoing extensive tests and taking into account future updates and upgrades. With the cloud, many of those costs are taken away, because all the software is installed on a server "shard" located at a data center elsewhere. This means that many of the hardware requirements can be ignored, since the data center will likely already have them. In addition, software and hardware is needed at the factory or office, saving costs. All a business has to do when using a cloud-based ERP solution is pay a monthly subscription fee.
- Simple IT management
The implementation process of a new ERP system can be a complicated one. IT needs to cooperate with other departments in the company to install the new software. There also has to be extensive testing to ensure the programs function as intended, whether it's the warehouse management system for fulfillment and inventory or the timekeeping software for payroll. With the cloud, however, these problems are easily resolved by having everything installed and tested at the data center. That can save a lot of time and money overall. Along with this process, upgrades and updates no longer have to be waited on just for the sake of IT properly testing and installing everything gradually. Instead, these improvements can be installed over the course of a single day or weekend, which makes it easy to keep computers secure and up to date.
- Companies can be flexible with demand
ERP software can have certain limits due to storage space and bandwidth. Running a variety of orders can take a lot of time to complete, and keeping these timeframes to a minimum can improve customer satisfaction greatly. However, when demand spikes, that can cause production delays, especially if orders are being backlogged because the system lacks the resources to anticipate more customers. On the other hand, with cloud-based solutions, these services match up with the number of orders at any given time, and allow companies to pay for only the amount of data they need. As a consequence, a company can be far more agile in handling any sudden shifts in product orders and deliveries, making them more competitive in the process.
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