Learning to embrace the allure of cloud ERP systems

12/20/2011 at 12:20 pm by The Sage ERP Team

The use of software-as-a-service (SaaS) is slowly gaining acceptance among ERP-using organizations, and for good reason. The costs associated with running a remotely-hosted database and processing program have plummeted in the past few years, which has led to a situation in which enterprises are rethinking how they orient and position their facilities throughout the country and the world.

However, not every single company has decided that cloud-based ERP applications suites are right for them. In fact, a report from the Aberdeen Group entitled, "SaaS and Cloud ERP Trends, Observations and Performance 2011," found that some industries contain businesses that simply will not consider a move to the cloud. These include financial services (22 percent), healthcare (42 percent) and utilities (42 percent).

The concerns of these sectors are likely over security or represent the need for government regulations to keep their systems closely monitored. Either way, other types of companies can certainly benefit from cloud-based ERP adoption. Here are some of the groups most willing to consider enterprise resource planning and the reason why it may be a good fit.

Logistics – 68 percent
In many ways, enterprise resource planning is logistics overlaid upon other types of businesses. Therefore, it's no wonder that companies entirely devoted to tracking items, following products and reporting results to collaborators would want to have a system in place that could do exactly that. In many ways, enterprises should realize that implementing an ERP systems is akin to transforming many existing processes into logistics.

Nonprofits – 67 percent
One of the most frustrating aspects of running a nonprofit organization is derived from the fact that the margins are so narrow. Instead of generating profit that can be largely reinvested into the operations of a company, charitable groups are instead obligated to use money for their avowed causes. These means that efficiency and streamlining are absolutely essential. Enterprise resource planning helps to establish organizations as fast and lean, making it possible to raise money with limited funds and resources.

Technology – 58 percent
If you go back over 100 years, you'll find products that require very precise items and the mass production of which relied on tight control of resources and parts. Henry Ford became famous for apply rigorous tracking techniques to cars that would be considered fossils in this day and age. Now consider how precise, miniature and temperamental the parts in today's technology are. Such precision necessitates careful tracking and accounting, which ERP systems can provide.