8 Reasons Distribution Migrates to Cloud SaaS ERP
Cloud has come a long way. ERP has been available in the cloud for more than a decade, and more recently the trend has been to subscribe to your cloud ERP through a Software as a Service (SaaS) model to lower your capital investment and see more significant improvements in profit margins. If your distribution company is considering migrating to a new ERP solution, here are the top 8 reasons cloud SaaS ERP is an ideal choice over an on-premise solution for your business:
1. Greater improvement in profit margins.
Research by the Aberdeen Group shows that distribution companies implementing a cloud SaaS ERP solution see a 21% improvement in profit margins after two years, compared to an 8% improvement when an on-premise ERP was implemented.1
2. Better insight to inventory.
The same study by the Aberdeen Group highlights the difference achieved in inventory control:
|Decrease in Inventory||Improvement in Inventory Turns||Decrease in Stock-to-Sale Ratio|
|Cloud SaaS ERP||17%||62%||28%|
|The SaaS Difference||6%||21%||19%|
3. Deployment is often faster and easier.
Cloud solutions have no special hardware or software to acquire and install, which removes that step entirely from your project timeline.
4. Lower up-front costs to migrate.
Without capital expenditures for IT infrastructure that are associated with on-premise hardware, your cloud solution’s up-front costs are much lower. You can use computer equipment and mobile devices you already have to access cloud ERP.
5. Fewer resources to manage your ERP.
Let’s face it, ERP is very complex. It can be difficult for in-house IT to effectively manage an on-premise ERP along with all the other software and hardware they must support. When you choose SaaS ERP, your provider manages updates, maintenance and support for your ERP, allowing your team to focus on other important aspects of your business.
6. System maintenance and upgrades are easier.
Choosing a SaaS ERP means that software updates, security patches and other maintenance are provided for you, as opposed to your IT department having to perform significant version upgrades or manage and monitor all application and database maintenance issues.
7. Available anywhere, anytime, from any device.
Unlike on-premise ERP solutions that require VPN setup on each computer used to access the ERP remotely, cloud ERP is readily available from any device over the web. With cloud ERP, you have 24×7 on-demand, real-time and secure login access to your system from wherever it’s needed, whether you are at a customer’s location, on the shop floor or in the board room.
8. Lower data loss and downtime than on-premise.
Companies with on-premise ERP see nearly twice the amount of data loss and security-related downtime as those on a cloud-based ERP.2 Cloud vendors use the highest standard processes to ensure the safety and security of your system and data. This includes addressing such measures as disaster recovery, environmental control, system monitoring and preventative maintenance. Data is protected with firewalls, encryption and password policies.
Ready to Move to Cloud SaaS ERP?
Give us a call at 1-888-575-8445 or email us at [email protected]. We would be glad to assist you in exploring ERP options and best-fit solutions for your distribution business.
1Aberdeen Group. SaaS ERP in Wholesale and Distribution: Enabling Communication Across a Wide Network.
2Aberdeen Group. SaaS and Cloud ERP Observations: Is Cloud Right for You?