Cloud ERP: Pushing businesses towards faster recovery during crisis

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By Uthpala Kumara

The pandemic revealed gaps and fault lines in business planning, supply chain vulnerabilities

By Uthpala Kumara

declining market share, and, it also made businesses increasingly aware of how important ERP (Enterprise Resource Planning) has been to the viability of their businesses. These business challenges raised by the pandemic and the ensuing economic crisis are quickly tipping the scales toward the faster adoption of business tech.

By definition, a cloud-based ERP system runs on a vendor’s cloud platform as opposed to an on-premises network, allowing organizations to access the system over the internet. It enables teams and organizations to conveniently access the software over the internet, so all that’s needed is connection and a browser to ensure the success of operations.

At a time when the global community is trying to rear its head from multiple black swan events like the COVID19 pandemic or high economic volatility, businesses will always have the advantage of coping better with significant workplace changes and bouncing back faster with cloud-based solutions integrated into their workflow. 

Switching to a Cloud ERP comes with a host of powerful benefits that are often undelivered by a traditional ERP. This includes a simplified deployment process that ensures the deployment and assimilation of an ERP within time and budget, reduced upfront investments that reduce financial burden and ultimately allow more predictable cash flows, improved and more efficient collaboration among users of the system, and most importantly guaranteed disaster recovery and data security – functionalities not offered by on-premise systems due to technical limitations and cost. 

Business success is often based on two essential qualities. The first is business intelligence that supports quick and effective decision making, which is necessary to outpace the competition and thrive in one’s industry. The other is agility, which creates growth and sustainability in a business. 

This is what an ERP brings to a business operation. Today, ERPs are central to an organisation’s ambition to survive and prosper. It often replaces myriad individual systems, including accounting systems, production planning and inventory control systems. It gives management a core point of control over their business.

This setup becomes particularly critical in times of crisis. While most companies look at investment in an ERP as a depreciating asset, a cloud ERP in this sense, continues to provide a return in the long run. It helps companies fortify their interoperability and resilience a great deal. Furthermore, it’s an evergreen investment that continually refreshes and brings new benefits to its users.

However, as companies already using ERPs or are looking to integrate an ERP into their business to manage the transition to next-generation ERP with digital solutions and cloud features, they must mitigate risks by first addressing their most urgent business challenges and then prepare for a full transformation and a smooth transition of core functionalities.

Successful migration to cloud ERP requires leaders committed to this complex transition because they firmly understand the specific benefits and the overall value to the business, particularly during a crisis. 

When businesses are under pressure during a crisis, they often do things they would not do under normal circumstances. Perhaps they eliminated a redundant step to get by with fewer employees or tried outsourcing a portion of the manufacturing process. ERP offers the tools to model and examines whether these steps should become part of their new normal, so they can take valuable lessons from what was otherwise an unpleasant experience. It is also an opportune time to see how technology can improve process efficiency. ERPs can automate processes that may currently be inefficient or consume skilled labour, which could be redeployed elsewhere in the business.

Maintaining a high level of service in the worst of the downturn is critical as this will also position businesses for a more robust recovery. Even when the demand for a company’s products wanes, there will likely be some residual demand. They may be able to pick up new customers that their less-prepared competitor, who perhaps radically changed their proposition or ran down their inventory levels, could not serve. Or, if a company’s products saw increased demand or shortages, customers will have looked for alternative sources and may have found them. Will we go back to their earlier suppliers, or will they send additional business to the vendor who was there for them in a crisis? Downtimes can be an opportunity if one is prepared.

Keeping customers happy during stressful times is one of the main challenges of business organisations. But, it is difficult as businesses struggle to manage their sales and inventory expeditiously. It becomes even more complicated when customer and inventory information is housed on multiple platforms. ERP, therefore also helps maintain up-to-date information and facilitates client representatives to access the right, updated information and efficiently handle the customer information, thus improving client satisfaction.

In any case, while crises will continue to disrupt operations across several industries, there is an important lesson that everyone can learn: to look at the opportunities for sustainability and business continuity even as businesses cross tough times. In such a context, Cloud ERP Software systems help organisations stamp out the chaos and turn disruption from an existential threat into a competitive weapon.

(The writer is the Head of Sales & Partnerships – South Asia at IFS)

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