Cloud from the Top: Benefits of Cloud ERP for Small Business

Vice President, SAP Business ByDesign, SAP Asia Pacific Japan

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Technology has ushered in better and more efficient ways of doing business. We can send files from anywhere to anywhere in the world, and data collection that once took hours can now be done in seconds.

Manual tools such as bookkeeping records and traditional spreadsheets are no longer de rigueur—most businesses have switched to enterprise resource planning (ERP) solutions to automate their processes, and many have found that their ERP systems become even more robust when deployed in the cloud. Conglomerates and small and midsize enterprises (SMEs) have found that cloud-based ERP offers multiple benefits, including reduced costs, scalability, and improved level of security.

Sound too good to be true? Don’t just take it from us. To further illustrate how beneficial cloud ERP is, let’s look at three SMEs from around the world: Baldinger Bakery, Living Proof, and Coffice. They have moved their ERP applications to the cloud and haven’t looked back or gone down since.

Baldinger Bakery: Improving manufacturing and distribution

Baldinger Bakery has been serving freshly baked bread, buns, and rolls for over 128 years. Aside from providing generations of families with delectable baking goods, this business also services some of the biggest names in the food industry. Due to the rapid growth and expansion, Baldinger Bakery is planning to open more locations to fulfil customer expectations.

To meet the requirements of the growing business, Baldinger needed a business solution that could trace the movement of products from raw materials to finished goods, as well as improve overall customer fulfilment time. A cloud-based ERP platform made this possible.

With a fully integrated cloud-based ERP, Baldinger enables an accelerated production and distribution system and maintained end-to-end control over its operations. In just three months since its move to the cloud, Baldinger saw a 30{1237064c4fbd39c09a63544f7c6a109b421903812b0c1364192bd0b5db1b26ee} improvement in sales order processing, 15{1237064c4fbd39c09a63544f7c6a109b421903812b0c1364192bd0b5db1b26ee} faster warehouse picking and shipping, and 99{1237064c4fbd39c09a63544f7c6a109b421903812b0c1364192bd0b5db1b26ee} delivery accuracy. These improvements translated into huge savings for Baldinger and enhanced the company’s relationship with both new and existing customers.

Living Proof: Increasing revenue and expanding the product portfolio

Based in Cambridge, Massachusetts, Living Proof offers world-class hair care products that make use of the latest in biotechnology. With over 100 awards, Living Proof is at the forefront of innovative beauty solutions. From a small enterprise, it has grown into a company with various product lines. To keep up with the increase in demand, the company had to employ new IT solutions.

With a cloud-based ERP solution, Living Proof created a system that strengthened supply chain and manufacturing, while utilising minimal infrastructure. The benefits of using cloud-based ERP proved to be threefold: 330{1237064c4fbd39c09a63544f7c6a109b421903812b0c1364192bd0b5db1b26ee} revenue increase and 400{1237064c4fbd39c09a63544f7c6a109b421903812b0c1364192bd0b5db1b26ee} in unit volume growth. The brand even realised an improvement in introducing new lines to market by 230{1237064c4fbd39c09a63544f7c6a109b421903812b0c1364192bd0b5db1b26ee}.

Coffice: Simplifying accounting and inventory process

Austrian company Coffice is a wholesale distributor of fully automatic coffee machines and supplies. Different organisations from law firms to advertising agencies have enjoyed the high-quality coffee offered by Coffice. The company ensures excellent coffee by delivering only the freshest milk and the finest coffee beans, together with its easy-to-use coffee machines.

With a small staff, Coffice needed big solutions to better plan, control, and manage its inventory. Since 2012, the company has been taking advantage of cloud-based ERP software to simplify its accounting and management of material flows. Cloud ERP not only streamlined Coffice’s processes, but also provided the company with accurate statistics on sales revenues and profit margins.

By adopting a cloud-based solution, Coffice accelerated invoicing, enabled precise analysis of sales revenues for each product group, and simplified accounting processes. These changes have given Coffice better control of its financial and inventory structures.

Cloud-based ERP benefits for small business

As with any financial or technological investment, if you’re considering cloud-based ERP, you should take time to evaluate your business needs and carefully study its benefits for small businesses.

It’s secure. Some SME owners refuse to do away with hosting ERP onsite because they think it would render their data vulnerable. While the on-premises-versus-cloud security conversation is still ongoing, most have put their trust in cloud. Why? More stringent security requirements for cloud ERP providers pressure them to exhaust all avenues to ensure their technology is always at its most secure.

It increases productivity. Another concern among small business owners is the disruption of work following a technology move. But such inconvenience is only temporary. Moving to a cloud-based platform actually increases productivity. It allows easy and real-time collaboration among employees. It eliminates the need to contact other members of the team for, say, a file, as it’s accessible anywhere. Less time for tedious processes means more time for innovation, which is what every organisation should pursue in the digital economy.

It’s less expensive. Compared to implementation and maintenance of an in-house IT system, cloud-based programs and data storage cost less in initial capital. Even cloud ERP’s monthly service fee is more cost-effective in the long run. By eliminating annual maintenance fees and only charging on a per user/per month basis, cloud ERP is more economical than systems that require expensive licenses and constant hardware and software upgrades.

It makes the business agile. Cloud ERP has the flexibility, accessibility, and mobility that edge out legacy systems. As ERP is administered offsite and on a system that’s available online, deploying tasks is unencumbered and easy.

Cloud ERP has the flexibility, accessibility, and mobility that edge out legacy systems.

One way to ensure a positive outcome when instituting cloud-based solutions is by doing a dry run before going live with the new system. The procedure includes testing the cloud ERP with a few employees first and making sure they’re well-trained to handle the system. This will mitigate any problems that may crop up after the IT infrastructure change, and at the same time reveal which personnel will be freed up to handle other tasks. Resources may then be reallocated or internal teams shuffled to maximise the company’s potential.

Successfully moving to cloud ERP means engaging a reputable, experienced ERP cloud provider that has your business’ best interests at heart. Once the ERP is up and running in the cloud, learn how to optimise the technology’s features. Who knows, you just might revolutionise the way your business works and fast-track its success.

Ready to make the big jump to cloud? SAP Business ByDesign enables you to run your business better as it optimises key processes, from accounting to inventory management. Check out SAP Business ByDesign now.

This blog post originally appeared in the Digitalist. 

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