By Steve Attwell, Managing Director of Sage UK and Ireland’s Small and Medium Business Division
Enterprise software has come an incredibly long way since it was first coined in the 1990’s, but for too long it has been dismissed as solely the territory of mid-market enterprises.
That time, it seems is now over, with cloud computing promising to revolutionise the way businesses and financial directors view ERP. That’s according to Sage’s recent study of financial directors, who now see ERP as a more viable option for small and medium sized businesses as the proliferation of cloud technology continues.
The research found nearly a third (31%) of FDs believe said cloud computing would make ERP a more viable option for businesses and a further 30 per cent agreed cloud would make ERP more affordable. On top of this, 31 per cent said cloud would make ERP more flexible, while 27 per cent of FDs also believed it will improve return on investment.
What is critical about these stats is that financial directors hold a key position in the decision making process in SMEs. They are the gatekeepers to any major spending decision or investment, so when ERP would previously have been dismissed as an option this is now longer the case.
We are on the brink of a new era for ERP, and financial directors are primed to capitalise. While a third of respondents still feel ERP is the domain of big business, cloud technology is breaking down those barriers. ERP is now a more accessible, viable option for small and growing firms thanks to the inherent flexibility brought about by new cloud deployment options.
Managing the bottom line
Finance professionals understand capital; they are driven by activities and strategies that act as a catalyst for business growth, manage risk and deliver bottom-line performance. When making a purchasing decision the technology counts, but its cost and bottom line benefits that’s the real driver for today’s financial director. Cloud can help deliver great cost-efficiency, and a pay-as-you-go models gives companies the opportunity to only spend money what they are using. The asset does not depreciate over time, and its value remains intact. With no upfront outlay, cloud breaks down the barriers to entry for ERP, making it a more viable investment. With improved visibility from customised reporting tools, it’s easier to plan for the future, manage the bottom line, and keep a tight leash on the day-to-day cash flow.
Incorporating all areas of business, from finance and marketing, to sales, distribution, and stock control, ERP can allow a business to streamline and be totally wired into each area of their organisation through one application.
Through the proliferation of mobile technology, the corporate world is mobilising and cloud has opened up this door to a new way of working. The days when companies managed their finances in a book and kept paperwork in a filing cabinet are coming to an end. Cloud-based ERP systems allow businesses to have access to any of their important documents from anywhere with an Internet connection. No longer do executives have to wait to get back in the office. They can simply sign in to the cloud with a mobile device or PC to find their files in a matter of seconds. Add to this, the peace of mind that the system will be automatically backed up and your data is secured in a safe place.
Opening the door on the wider business benefits
As more businesses move online, ERP has the potential to be energised with a new lease of life. Online business tools have the capability to transform the operations of firms who want to unlock the benefits of the web, and will offer tangible benefits for those with a distributed workforce or a highly mobile team. On top of this, FDs are seeing the wider business benefits from ERP and cloud as it affords greater flexibility, and it gives the business the power of scalability for growth. A firm can rapidly upscale and downscale, dependant on its needs and importantly it puts the FDs fingers right on the pulse of a business.
Some firms have faced difficulty in the past from costly and cumbersome ERP projects, but it’s positive to see that firms are quick to recognise the cloud’s potential to revolutionise ERP. Gartner predicts by 2018, at least 30 per cent of service-centric companies will move the majority of their ERP applications to the cloud. While online solutions may not be right for everyone, we can anticipate many firms considering cloud ERP as a potential replacement for aging core systems as they look to unlock the power of the web.