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You Can Thank Us Later – 5 Reasons Small Manufacturers May Need Cloud ERP

Is Cloud ERP for Manufacturing the Right Choice for Job Shops and Manufacturers?

In the face of growing competition and a challenging business climate, many job shops and manufacturers are looking for ways to reduce costs, streamline operations and improve the bottom line. Implementing Enterprise Resource Planning (ERP) software [1] is a proven solution for running a business efficiently and effectively. Yet, a large percentage of job shops and manufacturers have held back from implementing an ERP system due to high initial costs, long implementation times, and competing demands for time and resources.

Cloud ERP, sometimes referred to as Software-as-a-Service, or SaaS, delivers financial, implementation, and operational benefits to job shops and manufacturers.

As job shops and manufacturers improve operational efficiency, and increase their competitive standing, most realize that an ERP system can help streamline their business processes and improve operational efficiency. However, recent estimates suggest that the lack of ERP is holding back companies. This is especially true in smaller companies. High initial costs – including software, hardware, and supporting infrastructure – lengthy and complex implementation projects, and the staffing necessary to implement and maintain ERP systems all become barriers to ERP implementation.

With traditional on premises software deployments, customers purchase, install, manage, and maintain the software as well as supporting infrastructure, such as hardware and networks, in house. In a cloud deployment, the software vendor hosts, manages, and provides customers access to the software as a service over the Internet. Rather than pay for the software up front out of their capital budgets, cloud customers license it on a subscription basis, usually per user, per month, or per a specified number of transactions. On-going maintenance, upgrades, and support for the software and infrastructure are all the responsibility of the software vendor and are included within the subscription fee. ERP systems that are cloud deployed can also drive a significant reduction in the total cost of ownership, compared with legacy on premises deployments. The cloud model offers a wide range of financial and operational benefits for manufacturers which may include lower and more predictable ongoing costs, faster implementations and time-to-value, reduced cost of ownership, greater reliability and availability and reduced IT complexity.

Benefits of Cloud ERP for Manufacturing

What are some of the other benefits of cloud ERP for manufacturing operations and busy job shops?

One of the most important benefits of the cloud deployment model is that it frees the manufacturing enterprise or busy job shop from the responsibility of maintaining and managing most of the application hardware, software, and infrastructure associated with ERP systems. Instead they can focus on and devote their time, staff, and resources to their core business and new strategic opportunities.

Photo via Shutterstock [2]