ERP Consultant Blog

When Do the Cost Savings for Cloud ERP Solutions Actually Begin?

Written by Lloyd Smith | Thu, Jan 16, 2014

The introduction of the Cloud has transformed the way businesses rely on business systems. Cloud ERP solutions and cloud computing makes it easier to access information on-the-go and supports greater flexibility in the business environment. Its affordability makes Cloud ERP a much desired business solution, especially with the popularity of using mobile devices for business purposes. While the Cloud certainly helps companies save money in the long run, many companies want to know when the cost savings actually begin. Do they start as soon as you implement the system? Or does it take a while to realize the cost-savings?

Cloud computing has made its way into the business world, and it looks like it’s here to stay. Many businesses have already begun moving their ERP solutions to the Cloud, and manufacturers who were skeptical at first are beginning to see value in Cloud solutions. The flexibility and affordability of the Cloud makes Cloud ERP a much desired business solution, especially with the recent influx of mobile devices in the workplace. However, as companies make the transition to the Cloud, one question seems to be on everyone’s mind: when do the cost savings actually begin?

Many software vendors boast of Cloud ERP’s “cost saving” capabilities, citing its reduced IT costs and faster implementation times. While it’s certainly true that Cloud ERP solutions are easier to implement than traditional, on premise solutions, they still require a fair amount of planning and training. Employees still need to be trained on the new software capabilities before they can begin using it, and business executives still need to develop a thorough implementation plan.

More often than not, companies won’t start saving until after the solution is implemented. While Cloud ERP solutions certainly have substantial up-front cost savings (no hidden implementation costs, no hardware to maintain, no additional IT needs), the true savings do not begin until the solution is fully implemented and in use. This is when companies begin to experience the true benefits of Cloud ERP software.

In order to maximize your cost savings in the Cloud, you should do some planning before you even begin to think about implementing a Cloud ERP solution. Proper planning can help you eliminate time delays and errors so you can get your system up and running quickly. Here are five important tips designed to help you maximize your cost savings long after you implement your Cloud ERP solution.

5 Ways to Maximize the Cost Savings with your Cloud ERP Solution:

  1. Write down your requirements. You should have a list of your business requirements long before you sit down to choose a Cloud ERP software solution. Business process mapping and a complete business requirements list will help you choose the right solution for your company. More often than not, companies choose software based on what sounds good in the moment rather than what their business truly needs, only to find that they overpaid for capabilities they will never use. Don’t make this mistake – know (and stick to) your requirements.
  2. Have a thorough understanding of your true Cloud ERP costs. When you are evaluating Cloud ERP solutions, make sure you take the total cost of ownership (TCO) into account, not just the upfront costs.
  3. Evaluate your Cloud options – public or private?  A private Cloud will offer you more security; however, it will cost more than a public Cloud (where you only pay for the amount you use). Consider your options, talk to software vendors, and determine which would be best for your company in the long term.
  4. If your IT staff doesn’t have the capability to implement your Cloud ERP solution, hire the right people to do the job. If your current IT staff does not possess the skill set to implement your new Cloud solution, see if the software vendor or Cloud provider will perform the implementation. An understanding of coding, testing, and Cloud computing is essential to getting your project off the ground and saving your company money.
  5. Prepare a business continuity plan in case something goes wrong. It’s always good to have a business continuity plan in place in case something unforeseen happens. Having such a plan in place will protect your business (and data) should an unforeseen event (such as power outages or software vendor going out of business) put your business in jeopardy.

The above tips will not only help you save money on upfront Cloud ERP costs, but they will also help you realize lasting cost savings in IT staffing, annual maintenance, and licensing fees. Be aware, however, that a sloppy implementation and lack of user acceptance will only erase these savings so make sure you properly plan for the implementation and begin user training early on in the project. Early buy-in and preparation will increase your chances of success, helping you maximize the cost-savings of your Cloud ERP solution.

Stay tuned on more information about Cloud ERP and its influence on modern-day businesses. If your company could benefit from a Cloud ERP solution, give Mindover Software a call today at (512) 990-3994 or visit our website Mindover Software. Their newest product addition, Acumatica, is the perfect Cloud ERP solution for small and mid-sized companies looking for an affordable way to invest in ERP.

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