Why SMBs Find Cloud ERP Increasingly Attractive

Posted by Ho Nguyen

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There are two biggest reasons why small and medium-sized businesses (SMBs) find their solutions in cloud-based ERP systems: Software buyers feel more at ease with using software-as-a-service for important enterprise applications, and cloud-based services can now meet SMB’s wider range of requirements.

Obviously, SMBs have very different needs and budgets compared to large enterprises. In fact, though most SMBs know that their organisations need ERP, they still hesitate due to some finance and deployment causes.

Read more: How Can Cloud Computing Benefit Small and Medium-sized Enterprises?

SMBs and the cloud-based ERP System

The growing issue of ERP

As SMBs grow, the internal collaboration becomes essential, which is why it’s important to have a system that is able to unify everything. However, transforming to an ERP platform can be exhausting due to long and complicated implementation cycles. As a result, they spend too much effort on trying to manage the systems, and gradually moving further away from their competency.

Vendors of cloud-based solutions often play the trick of cutting three to nine months in the deployment process by not mentioning the time required for procuring and configuring on-premises hardware. For example, one manufacturing company once had to take their facility down for a full week for an ERP implementation, though they had been working to use this new ERP for three years.

Read more: [Infographic] 9 Steps to a Successful ERP Implementation

Download whitepaper "Why Smart CFOs Are Moving to the Cloud" here

ERP big names expand into SMB market

In the past, only the largest manufacturers could go to giant software vendors for ERP because the cost and complexity of the systems were huge problems that smaller businesses would rather avoid. Currently, that is no longer the case. In fact, the top two ERP providers, SAP and Oracle, have given out various options to satisfy every specific operational need while being budget-friendly to SMBs.
  • SAP’s cloud-based ERP system - Business ByDesign (the on-premises version is Business Online), is created to help SMBs in manufacturing and other verticals. Besides, the advantage of SAP shows in its 13,000-strong partner ecosystem. Though SAP is not a direct seller of SMBs, it provides tools on the official website to give SMBs instructions to find the right match. Also, it is a preconfigured, industry-specific software, and can save a significant amount of time and money for SMBs in ERP selection and implementation.
  • According to their spokesperson, there are more and more SMB manufacturers and distributors choosing cloud-based ERP from Oracle. Since SMBs have fewer IT and budgetary resources than large enterprises, they can find in Oracle an affordable, manageable and useful ERP platform that provides all the advanced capabilities needed to upgrade their business.

SMBs and the cloud-based ERP System

Cloud ERP services

According to a report from Software Advice, instead of investing in ERP systems, around 44% of the SMBs are still using QuickBooks, Excel and basic project management software. These replacements often end up with negative effects like time-consuming, inefficient data entries and other serious issues, confirmed by the report. Some SMBs are transforming to cloud ERP services with the purpose of seeking new capabilities, like special tools for manufacturing industry niches.

However, SMBs that want to get the benefits of an ERP platform have to proceed carefully to keep growing and thriving during the implementation. Luckily, now there are a wide variety of ERP solutions for small businesses to choose. Apart from Oracle and SAP, there are also Infor and Sage Software, which have many years of experience in this field. Furthermore, the cloud-based platforms, such as Salesforce, is another important trend. Specifically, it has a long list of third-party vendors for plug-in applications.

Read more: 3 Things You Need to Know about Infor OS – the Foundation of Future Enterprises

In conclusion, with cloud-based ERP system, SMBs can have a lot of benefits, but they still have problems to deal with. That is the reason why SMBs need to make sure that they have a full understanding about their businesses’ situation, a careful study on which ERP system is the right choice, and most importantly, enough time and resources to support the plan.

Interested in a cloud-based ERP system? Download our whitepaper to find out now! 

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Topics: Enterprise Resource Planning ERP

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 Rick Yvanovich
 /Founder & CEO/

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