Three Concerns Manufacturers Can Shake by Migrating to Cloud ERP

Three Concerns Manufacturers Can Shake by Migrating to Cloud-ERP

When it comes to Enterprise Resource Planning (ERP) software, there are three  main deployment (or host) options – on-premise, in the cloud, or both (hybrid). The differences between cloud ERP and on-prem ERP are pretty obvious. On-premise ERP software systems are, well, on site, meaning an IT department handles the implementation process and any upgrades to the software, which can be costly. Cloud ERP software is different in that it is not required to be handled by an IT department. Instead, cloud ERP is usually controlled by a third-party and is way more accessible, via mobile devices and tablets.  

As a manufacturer, ERP software has a plethora of benefits. Starting with real-time, streaming data and ending with flexibility and cost reductions. As more and more companies switch to cloud ERP systems, manufacturers are catching up and realizing why cloud ERP is becoming the next best thing.

Abas ERP, a global ERP software vendor for manufacturing businesses, has put together a list of three concerns manufacturers have about ERP and ways to overcome those fears by migrating to the cloud.

Cost Concerns

Expensive implementations can stop any company from investing. According to an article, one 2016 study found the average ERP implementation can cost as much as $3.8 million, and that’s nearly half what is would have cost back in 2012.

The first cost is usually the hardware purchases to accommodate the new ERP system. Then comes the software licenses and the hours of designing an on-prem infrastructure by the IT department, which may be broken down again when something goes wrong. While the IT department labors away on an ERP implementation, they will neglect the pile of helpdesk and maintenance tickets accumulating in their absence.

Fight it:  By choosing a cloud ERP model, otherwise known as Software-as-a-Service (SaaS), manufacturing businesses pay by service and by user. This allows the business to save money by having no additional servers to order. No expensive licenses to maintain, no complex web of networking that will keep IT preoccupied for weeks. Everything an ERP does remains in the hands of the ERP software vendor.

Time Concerns

ERP implementations take time, and anyone familiar with this can tell you that if the sticker shock doesn’t kill you, the long setup process itself may take a toll on your sanity. When manufacturers account for insufficiencies in their operations because of interrupted collaboration or unforeseen downtime, these days spent getting started will seem to drag on forever.

Fight it: When manufacturing businesses partner with a cloud ERP vendor, they receive assistance and support from its implementation team. Whether manufacturers prefer their ERP solutions in the cloud or on-prem, trained technicians know the architecture and infrastructure of the system inside and out. This allows for automated setup and customization processes accordingly, that way users can take advantage of ERP as soon as possible without any threat of prolonging this vulnerable implementation period.

New Software Concerns

Innovation and change shouldn’t scare off manufacturers. In fact, they should rise to every challenge and pivot their businesses as markets evolve. However, when a company has spent so much time, money and energy on developing an already existing robust ERP system, it seems almost insensitive to throw it a curveball, to expect more out of it or ask of it something completely different that what it was originally designed to do.

Fight it: Curveballs are what manufacturers should expect. Cloud ERP systems can integrate seamlessly into the greater cloud-based system. Users can select from any of their other cloud-friendly third party or advanced planning applications without fear of incompatibility with cloud ERP software.

Looking for more? Our buyers guide can help choosing an ERP system fast and easy!

Read the top six ERP vendors for manufacturing.

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Elizabeth Quirk
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Elizabeth Quirk

Liz is an enterprise technology writer covering Enterprise Resource Planning (ERP), Business Process Management (BPM) and Talent Management Suites (TMS) at Solutions Review. She attended Massachusetts College of Liberal Arts, where she attained a Bachelor of Arts Degree in Journalism. You can reach her at equirk@solutionsreview.com
Elizabeth Quirk
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