Cloud ERP suffered a tough break out into the ERP landscape. At the very beginning, many customers were concerned about security and reliability issues. However, once those fears had been put to rest, cloud ERP has become extremely popular, especially for small businesses. These applications give functionality to small businesses that was previously only available to large corporations. To add to the appeal of cloud ERP, a recent study by Nucleus Research shows that it is also giving more back to customers at a higher rate than an on-premise solution would.
Key Cost Differences
– Initial personnel costs are 50 percent lower for cloud ERP. Cloud ERP systems are run and kept up through the vendor, allowing for less costs on the customer’s side. Less IT resources are used keeping initial costs low during the implementation process.
– Since most cloud ERP implementations are faster and less complicated, companies are spending 1/5 as much on consulting as those implementing on-premise ERP. Less customization work is expected with cloud ERP and data integrations are easier making the need for long consulting hours less necessary.
– Since cloud ERP is being hosted by the vendor, rather than maintained on-premise, companies see their ongoing costs 5.5 times lower. Upgrades are usually taken care of by the vendor, as well, meaning there is less down time and loss of productivity.
– Companies deploying cloud ERP have seen a 42 percent faster payback. This means that the company gets returns from the investment faster and can start to reinvest it sooner. Nucleus Research comments that in the world of business technology today, companies will be able to use that reinvestment to take advantage of new products.
– As most ERP systems do, cloud ERP automates processes to get rid of manual tasks and boost productivity. However, cloud ERP gave a 42 percent higher ROI than on premise ERP did because of its lower initial and ongoing costs.
Most surprising about this study, the results were across a wide array of businesses; small, medium and large. Not only were small and medium sized businesses seeing a large ROI from cloud ERP, but large businesses were benefitting as well. This clearly shows that cloud ERP is finally making its breakthrough into the ERP market that it deserves, showing all of its benefits. It truly can be a choice worth considering for those companies that need little customization and want a fast and large ROI.