Cloud ERP cost savings benefit is a primary consideration for most companies. When weighing options, you’re after the best results that will maximize your investment. If you’re in the construction or manufacturing industry, decision-making can be particularly challenging due to the complexity of the business model.
This is where adopting a cloud ERP comes in. Cloud ERP’s cost-saving benefits can outweigh your operating expenses or manufacturing costs since the product improves your organizational efficiency.
In fact, ERP trends show the technology’s benefits contribute to its fast-growing popularity. If you want to know more about how your company can save from cloud ERP, this resource has got you covered.
7 Ways Your Company Can Enjoy Cost Savings Through Cloud ERP
1. Untangles complex workflows
Not all businesses are the same. Some may have complex business models that need highly specified tools to help in their operations. This is even amplified as the business grows. Because of this, you’ll need an infrastructure that can keep up with constant changes.
Implementing cloud ERP in your day-to-day operations can offer significant advantages. An ERP system allows you to scale your business and easily handle the increased complexity and volume of transactions that typically result when a business expands without making your organization vulnerable to costly mistakes.
Since cloud ERP effectively streamlines work processes, information flows smoothly from one team to another. This provides a simpler workflow than tracking via emails or spreadsheets, where information can get lost easily.
2. Increases profit margins through efficiency
Another cloud ERP cost savings benefit is its ability to increase overall productivity by removing menial tasks from your team. Repetitive job orders across departments take precious hours away from more meaningful and pressing business matters. As such, you may be paying for more work hours with fewer targets being met.
In contrast, cloud computing and an ERP system eliminate these tedious tasks. Your staff can then focus their efforts on projects or activities that can help the business grow.
For example, manually sending out invoices or payment reminders can take too much time, especially for construction companies handling multiple clients at a time. Your finance team can speed up the process using cloud ERP’s automation feature that enables them to process and distribute financial accounts easily.
Here, having an efficient and productive workforce can shorten project timelines, ultimately enhancing your company’s cash flow.
3. Monitors supply and inventory
Businesses with deep involvement in the supply chain often encounter problems with inventory management. Apart from the expenses of acquiring these materials, you’re also likely to incur costs from either over-stocking or under-stocking.
If you’re manually tracking and monitoring inventory, you’ll find that inventory data can change rapidly in a day. Because of this, bottlenecks such as low inventory on high-demand items or vice versa, shipping delays, and receiving issues can ensue.
However, cloud ERP and automation using RFID, serial numbers, or barcodes can make tracking easier. These functionalities can then ensure that your fast-moving items are always available to accommodate your customers’ orders.
Cloud ERP also keeps production slowdowns at bay, as it keeps necessary manufacturing materials on stock every time. On top of this, real-time inventory data lets you understand your consumers’ preferences so that you won’t overstock on slow-moving items.
4. Supplants standalone systems
The fast-paced business landscape calls for organizations to be quick to adapt. However, a fragmented system can result in siloed data between departments. When this happens, your team may have difficulty collaborating and sharing ideas that can help your company keep up with market trends and demands.
A cloud ERP solution can eliminate this fragmentation, thanks to its cross-functionality feature. It has many useful modules, including CRM, payroll, and more. Unlike the lack of flexibility in standalone systems, cloud ERP lets you integrate different functions into one application. This gives your staff access to the necessary tools or information from one centralized system.
This particular cloud ERP cost savings benefit means you won’t have to pay exorbitant subscription fees for many applications. You also won’t have to pay for a cloud orchestration procedure to mesh these different workflows together into one cohesive system.
5. Reduces investments for hardware and infrastructure
Another major cloud ERP cost savings benefit you can gain is a reduction in your company’s IT investments, including hardware and other relevant technological infrastructure.
For comparison, installing on-premise ERP requires network servers to store data or run programs in-house. However, this is a costly endeavor as you’ll need to pay for the upfront costs of the installation and maintenance.
A cloud ERP system does not need any bulky and expensive hardware to be installed on the office premises, and yet it is accessible anytime and anywhere as long as the setup is connected to the internet. Think of it as using someone else’s hardware and infrastructure and paying for it monthly, which is relatively cheaper than building one from scratch and maintaining it.
You can also save on labor costs because you won’t need a dedicated team of data center staff for an onsite ERP. And since cloud ERP is a low-code system, your IT staff only needs to do a few configurations to customize the software. This means they have more time to optimize internal processes directly related to your business.
6. Less demanding for bigger office spaces
Again, having onsite ERP requires physically setting up and storing massive pieces of hardware in your office. As such, you may find yourself paying excessive rental fees to accommodate the necessary installations.
On the contrary, cloud-based ERP enables you to find a smaller office space without worrying about dedicating part of your building space to bulky network servers.
More than that, you can also go for a paperless operation since everything is in the cloud. Documents in hard copies and printed materials are kept to a minimum since you can easily access their digital versions via the cloud. As such, you can save both space and money from reduced storage needs.
7. Eliminates the need for licensing inefficient legacy systems
Many legacy systems are no longer supported in the current ecosystem involving highly sophisticated technologies. In this scenario, your IT staff may be bogged down by numerous bug fixes and compatibility errors that they need to address, preventing them from focusing on new initiatives. Ultimately, the progress of your business may suffer.
Cloud ERP allows you to do away with inefficient legacy systems since the former is already optimized for the new ecosystem. Updating the software is easy, as well.
6 Unquantifiable Ways an ERP Can Help You Reduce Costs
Cloud ERP is not just about helping you save costs from proper management of your IT assets but it also gives you indirect cost savings through improved performance across departments.
1. Improves customer management
As with any business, keeping customers happy is a must. A study shows that acquiring a new customer can be 5x more expensive than retaining an existing customer, and part of retaining customers requires a good understanding of their habits and preferences.
With the cloud ERP’s CRM module, managing your relationship with your customers is made easier, thus helping you retain them in the long run. The CRM module shows you several details necessary to provide your customers with a personalized experience, such as their order history, billing and contact information, and highly relevant ads. With increased customer satisfaction, you can plan a better sales strategy and improve your customer retention efforts.
Aside from this, the CRM module makes it easier for your clients to reach you with the different communication channels it provides. This allows for a more efficient system for collecting feedback to know which aspect of your product or service makes customers happy or unhappy. From there, you can immediately follow through with them or address their concerns.
2. Lifts the burden on your in-house IT team
Several organizations implementing a cloud ERP system have seen major cost improvements. This does not only stem from reduced hardware investments but is also shown in how it relieves IT staff from many repetitive and tedious tasks.
Again, cloud-based ERP does not require extensive coding, except for specific customizations based on your business model. Because of this, your IT staff can focus on other aspects of their job role while cloud ERP vendors take care of troubleshooting the product or system.
More importantly, the flexibility that comes from cloud ERP gives your team an easier time in managing your IT assets in case you need to scale up since they don’t have to get involved in adding new hardware or maintaining it.
3. Fields accurate data
Cloud ERP cost savings benefit also includes the accuracy of data it provides. One of this tool’s most crucial roles is consolidating data from different, siloed sources into one centralized database. With cloud ERP, your team can easily obtain the data they need instead of sifting through different sources.
Furthermore, data is real-time, which means you can act on accurate information instead of basing your decisions on outdated ones. This enables your team to create accurate forecasts, taking on a more active approach as opposed to a reactive one. In effect, your team can make data-driven decisions, guiding them in planning effective strategies.
4. Enhances business reporting
You need data to create timely and detailed business reports to help all business stakeholders understand the company’s performance. However, large quantities of hard-to-access data can lead to mistakes. And in the business world, such mistakes can be expensive.
With cloud ERP, you can perform your reporting tasks using real-time data and valuable insights. The accuracy of the information can make it easier for managers to make the best decision for the business.
For example, your finance department can take advantage of cloud ERP to see revenue bottlenecks or cost reduction opportunities.
In this case, you and your team can grow confident in data-driven decision-making. On top of this, making timely reports is crucial as you can immediately act on the opportunities instead of waiting for them to pass.
5. Easier implementation and upgrading
Cloud vendors ensure that their software is up to date and supported by the latest technology. This means that your cloud ERP can easily adapt to these changes with minimal effort from your end. Moreover, numerous providers continue to push out new functionalities that their clients can use to ensure seamless integration in their workflows.
In comparison, legacy systems and on-premise software may place the bulk of maintenance work regarding compatibility and other similar factors on your IT team. Consequently, fixing bugs and other complications may become more difficult since compatibility with current iterations is an issue.
6. Fosters inter-department collaboration
In addition to replacing standalone systems, the centralization of data and business functions across the board can improve workplace collaboration. This is especially helpful for projects that involve more than just one team. Since cloud ERP offers an integrated communication channel, it’s easier for teams to share information or project updates.
Last but not least, cloud ERP allows remote teams to work efficiently. They can easily work on their tasks anytime, update projects as development happen, and gain access to everything they need online. They can even work on a single document simultaneously. That way, they can make changes and address problems quickly.
Cut Down Costs with Cloud ERP
Different businesses have different business models, with some more complex than others. Because of this, companies may hesitate to implement cloud ERP in their operation, especially since these complexities are a driving factor for product design or manufacturing. However, legacy systems and on-premise hardware may not be enough as they expand their business.
As such, cloud ERP may be more advantageous in scaling businesses. More than that, the cost-saving aspect and significant efficiency improvements can offset costs incurred from shifting to cloud-based ERP solutions.
If you’re ready to implement cloud ERP in your business, reach out to Yondu, Acumatica’s partner in the Philippines. Acumatica ERP has a Construction Management module that can be fully integrated into your systems. Apart from this, Yondu develops customized construction management software according to your business model and processes. Schedule a consultation with our ERP experts to get started!