Top 10 Factors Driving Cloud ERP Success
Oftentimes, it’s the most urgent problems about product quality – production efficiency; disconnects between sales, engineering and production; and meeting order delivery dates – that motivate organizations to improve. High-growth organizations face these challenges and more, and it’s often because their existing ERP system can’t scale for the new production volumes and complexity of growth.
Their legacy systems could manage production when there were fewer suppliers and products, as well as simpler distribution, selling and service channels. Given how fast many businesses are growing today, legacy systems’ contributions to greater growth are limited. These factors and more are why cloud ERP solutions are seeing rapid adoption. The following are the top ten factors driving cloud-based ERP success this year and beyond:
1. Improving Product Quality
Many of today’s organizations are relying on a single, scalable cloud ERP system across all manufacturing locations to improve their product quality. Quality and compliance systems are often siloed from other manufacturing and accounting software, making it very difficult to get a company-wide view of quality. Cloud ERP software is seeing rapid growth in this area by providing a scalable system of record based on a single database. Quality becomes strategic, compliance becomes more manageable and customer satisfaction improves.
2. Real-Time Production and Process Monitoring
The era of real-time production and process monitoring is here. From small and medium-sized manufacturing companies to global leaders, all are adopting real-time production and process monitoring at a quickening pace. Improving manufacturing execution, production efficiency and increasing the percentage of orders delivered on time to customers are just a few of the many factors driving cloud ERP adoption.
3. Support for Shorter Lead Times and Schedule Adjustments
Better support for short lead times and the rapid ability to adjust schedules and incorporate design changes has been a game-changer. Manufacturers often remark that the ability to support short lead times and adjust schedules to support their customers’ supply changes wins them more business. Cloud-based ERP software and the platforms they’re built on are providing manufacturers with the tools they need to capitalize on these last-minute opportunities for more revenue.
4. Analytics are Unavoidable
Analytics, including business intelligence and manufacturing intelligence, has become essential for running a modern manufacturing or service business. Across all industries, analytics and BI are delivering insights that weren’t available before, enabling manufacturers and service providers to know more about their operations than ever before. Cloud ERP systems designed on a single database structure build in analytics and reporting so every phase of manufacturing can gain access and insights, as well as improve operations. Cloud-based ERP systems are also becoming adept at providing advanced manufacturing metrics, including overall equipment effectiveness (OEE).
5. Mobility is a Must
Mobility is a must-have for manufacturers who want to manage their operations without sitting at their desks all day. Cloud ERP solutions and the platforms they’re built on support mobile access to apps from any device that has an Internet connection anywhere in the world. Employees of all kinds – from quality assurance to engineering to scheduling teams – want to work untethered to their desks and be on the production floor getting work done. Cloud-based ERP systems are making this possible.
Get our ERP Software Requirements Template
6. The Increase of Mergers and Acquisitions
The quickening pace of mergers and acquisitions across manufacturing industries is one of the key catalysts of ERP cloud software adoption. For many small and mid-tier manufacturers, the most attractive exit strategy is to either merge or sell their company to one of the larger global manufacturing companies that aggregate smaller businesses together. Integrating legacy ERP systems between two or more merged manufacturers can be a lengthy and expensive process. Cloud ERP systems are often relied upon to provide a system of record that scales across the new entity, delivering the analytics, metrics and key performance indicators (KPIs) needed to track progress towards their goals.
7. Increase Adoption of Hosted/Managed Services
The increased rate of adoption of hosted and managed services is also helping to drive greater cloud ERP adoption. In fast-growing organizations, it’s a challenge to keep ERP, MES and the broader base of IT systems current and reliably integrated. Hosted and managed services are growing as more organizations look to outsource their IT infrastructure to third parties that are experts in scalability, security and uptime.
8. Intuitive User Experiences
Delivering an excellent user experience, including the defining and fine-tuning of application interfaces over time, is easier to accomplish with cloud ERP solutions. For organizations with complex user interfaces on their legacy ERP systems, a cloud-based ERP solution can help drastically reduce the confusion and complexity of how each application’s screen looks and interacts with other aspects of the system. Many SaaS ERP systems have current-generation user interface (UI) technologies and workflows that enable role-based designs of individual screens. Cloud ERP systems have won the UI war by providing support for responsive web design on mobile devices, increasing both adoption and, just as importantly, use.
9. Managing Growth and Improving Performance
Manufacturers are relying on cloud-based ERP systems to better plan and manage growth while improving business performance. They’re relying on the real-time data available from cloud ERP solutions to be more selective and successful with the growth strategies they pursue. A big part of any successful growth strategy is turning customers into fans and evangelists. With the majority of revenue coming from existing customers via upselling and cross-selling new products and services, having real-time data on product and delivery dates are key to growth. Panorama Consulting Solution’s 2017 Report on ERP Systems & Enterprise Software found the top reason organizations are implementing ERP today is to improve business performance.
10. Reducing Costs and Providing Greater Flexibility
Reducing one-time costs while providing organizations with greater flexibility for managing their business processes has become a necessity of late. The graphic below from Price Waterhouse Coopers’ (PwC) published study, Beyond ERP: New technology, New Options, illustrates the cost savings of taking the first steps towards pursuing a cloud-based ERP strategy.
The majority of companies seek to integrate their legacy data while relying on the latest cloud ERP system features in order to gain the information they need to operate their businesses better.
For more information, check out our article covering this year’s ERP software trends.