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Why Do Organizations Buy Cloud ERP?

Why Do Organizations Buy Cloud ERP

When it boils down to making a choice between a cloud-based ERP solution and an on premise legacy ERP solution there are some factors that need to be counted in. Given below are the reasons based on actual surveys and research carried out by agencies on actual companies which have already made up their minds and taken the stride in the right direction.

Benefits of cloud-based ERP

  • Reduction in total cost of ownership: This is the foremost reason why companies go in for a cloud-based ERP solution. Given the fact that everything is on the cloud, companies can save thousands of dollars on costly hardware and software that are a part of legacy ERP solutions.
  • Minimal upfront costs: As there is minimal hardware costs associated with a cloud-based ERP, hence upfront costs associated with costly hardware become a thing of the past and one can go in for a monthly subscription based service which is very nominal.
  • No worries with upgrades and patches: As everything is on the cloud, the software versions are automatically updated from time to time. Hence, there is no requirement of a dedicated backend IT team to carry out periodical upgrades and patches as everything is being taken care of automatically.
  • Easy to implement: Cloud based ERP solutions are a whole lot easier to implement than on premise ERP products, which makes it the foremost choice among business owners.
  • Minimal IT resources: As the periodical updates and upgrades are being carried out on the cloud automatically, hence costs associated with having an IT resource team is greatly reduced, resulting in more savings for the company.
  • Faster ROI: It has been observed that companies opting for cloud based ERP solutions achieve ROI faster than on-premise solutions.
  • Shorter implementation time: On an average a cloud based ERP solution takes about 6.95 months to go live, whereas an on premise solution could take up to 11.02 months.
  • Lesser workload: Cloud based ERP solutions are a lot easier to implement than on-premise ERP solutions as there is comparatively lesser workload on the IT department during the implementation process.

Some of the other factors that affect the decision of business owners to go for a cloud based ERP solution include security concerns, being in control during the upgrade process, welcoming the cloud solution as the former legacy ERP was too basic and cutting down on downtime risk.

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