Manufacturing ERP Systems and the Cloud
By Dan Johnson
Most companies, like people, hate change. It’s much easier to not rock the boat, especially when change can be scary, like moving key manufacturing processes and systems such as ERP to the cloud.
The fact is, with cloud-based ERP initial costs are typically much lower because you simply implement the software you need to meet your specific requirements – software-as-a-service (SaaS) -- and then access it through your company’s internet connection. The cloud ERP provider hosts and maintains all of the IT infrastructure for you, ensuring that the system is always running, that the data is secure, and that product enhancements are rolled out painlessly without disrupting or eliminating your previously implemented customizations.
Meanwhile, software developers continue to improve cloud-based SaaS ERP functionality. As they develop more comprehensive, end-to-end solutions to better meet the evolving needs of discrete manufacturers, the benefits of moving to the cloud are becoming clearer:
Faster implementation and return-on-investment (ROI) The flexibility and scalability of the cloud means ERP implementations can be tailored to meet a variety of immediate and long-term needs, speeding up initial implementation and achieving ROI faster. Since cloud ERP requires no additional hardware, your business doesn’t have to waste time procuring and installing IT infrastructure. Cloud ERP can be easily implemented across multiple regions, subsidiaries, and divisions with minimal cost and significant time savings -- cloud ERP deployments typically take only 3-6 months compared to the typical 12 months for an on-premise solution.
Faster, more flexible configuration With on-premise legacy manufacturing ERP systems, every customized manufacturing or business process change has to go through IT or perhaps an external supplier or consultant, making change slower and more costly. The cloud gives the power of custom configuration to the actual user, bypassing IT and outside providers to achieve faster results while saving time and money. Hosted SaaS ERP solutions are continually upgraded by the provider so employees are assured of working with the latest ERP application version and having previous custom modifications carried forward with it.
Better enterprise-wide access to data On-premise manufacturing ERP systems tend to silo transactional data, making it difficult to share between departments and business units. Cloud-based ERP eliminates silos and makes it easier to share data across platforms and the entire enterprise, providing real-time, accurate data that can be accessed via the Internet anywhere, any time on workstations, desktops, laptops, smartphones, and tablets.
Enhanced security With cybersecurity a real and growing concern for manufacturers, cloud-based ERP provides better security in addition to improved accessibility. Many cloud-based ERP solution providers prioritize securing their systems and provide strong, industry standard data security certifications such as PCI DSS and SAS 70 standards compliance.
Yes, cloud computing for manufacturers, such as hosted SaaS ERP, is relatively new and for some companies it can be hard to overcome security concerns. But the fact of the matter is that much of your day-to-day computer functionality – personal and professional -- is already cloud-based, whether you know it or not. The truth is, security is constantly improving and breaches are more rare than you might think. The benefits of moving manufacturing ERP to the cloud are too great to let a little fear and inertia get in the way.