CRM and ERP: What’s the Difference?

There’s no disputing that today’s market offers you many user friendly products that can help you manage your business a little easier.

What’s the challenge in this scenario? You may not know which product to purchase. All businesses work with budgets and chances are you may only have the money to add one tool or resource to your business this year.

When faced with this predicament common questions relate to CRM and ERP products. What’s the difference? Do you need one or both?

The first important fact: they’re not the same thing, even if vendors tell you they are. Read on to get some inside information, empowering you to make informed decisions on where to invest your funds.

What is an ERP?

Here we’re talking about an enterprise resource planning system. As the name suggest its core purpose is to help you manage business operations better. Of course business operations are found in many aspects of your business:

  • Orders and sales
  • Accounts
  • Payroll
  • Human resources

A quality ERP system will easily deploy across various departments, providing dynamic features to different employees.

An important benefit you’ll immediately enjoy after implementing it is that all your departments will have access to standardized information. A high-end system offers this data in real time. If one department notices a problem the entire spectrum of role players will receive alerts instantly.

These features enable you to become more proactive and efficient. Also, when everyone works with the same information it improves efficiency and data accuracy & will enable fast decision making.

What is a CRM?

A CRM is a customer relationship management system. You can see there’s a focus here on a very important aspect of your business: how you interact with customers.

Different role players in your business interact with your customers and a quality CRM will provide the necessary—up to date—information of any customer to whoever needs it. This happens without one party needing to ask someone else for contact details, an update on a query or the latest news on someone’s account.

The system doesn’t only store basic information about the customers, but the details about your interactions with them.

With instant access to all this information sales representatives, customer care agents and your accounting department can get work done faster. Customers also get their feedback faster than usual, resulting in more satisfied clients.

Advanced CRM systems can even assist in the following:

  • Help you with lead generation
  • Steps in planning a marketing campaign can be automated with client information being instantly accessible
  • Analysis of customer activities such as buying habits becomes easier, resulting in more effective marketing

You’ll also enjoy automation of various tasks your employees perform manually at the moment. You can save time while delivering better service than ever before.

The Differences Explained

With ERPs being active in many departments of your business it’s clear that some of their features will overlap with CRMs. To gauge which one you should invest in, let’s discuss similarities and draw clear lines between these systems.

Purpose & Functions

Your CRM is customer focused and will specifically help you improve your relationship with them. But note that this does affect multiple departments, all focused on your customers’ experience of your company:

  • Customer service
  • Marketing
  • Sales

The systems will help automate sales processes thereby saving time, speeding up your activities and meeting customer expectations faster than before.

A CRM is therefore a handy tool if you realize the lack of customer satisfaction is the main problem in not reaching your planned sales figures. Instead of restructuring your entire business this one small adjustment of implementing a CRM could bring the change you need to be successful.

In contrast an ERP can help you upgrade processes in even more parts of your business. You can become more proactive as access to information will help you notice challenges before they become problems.

You’ll have a one data base that supports all the features. Features will assist with tasks such as:

  • Costing
  • Supply chain management
  • Scheduling
  • Life cycle management of products

CRM functions such as sales, marketing, call centers and customer services may form part of an ERP’s functions too.

Effect on Your Business

It makes sense that any resource you acquire should affect your bottom line.

Your ERP helps you do this as you will invest less of your capital in managing business processes. You’ll less to cover overheads which instantly frees up cashflow for other aspects of your business.

If you use your CRM effectively you’ll notice an in crease in sales. This is thanks to close relationships with customers that make them more loyal to your brand.

Users

There are similarities in who will use the systems as both can be used by multiple role players. With an ERP an employee can enter new data while managers will use the data when making decisions. In a similar fashion the CRM’s data can be updated by sales clerks while upper management will draw on the data to create sales projections.

Which One do You Need?

You can see they’ll have different results, but that doesn’t mean you need both right now.

Smaller business can often function well without an ERP system. Your departments may by physically in close proximity to each other and employees can easily share information to the few relevant role players. Once you grow and the infrastructure becomes more complex it’s a smart move to implement an ERP.

In contrast almost any business would be wise in acquiring a CRM. Your relationships with your customers at the start of your company will determine how quickly you grow. Implementing a structured, effective way to manage client information—instead of a messy paper based system many small businesses settle for—is an investment worth making.

Should you invest in an ERP that can handle CRM functions too? Simply make sure you don’t pay for features you’ll never use.

Conclusion

There’s no question that these products can influence your productivity and even your revenue for the better. But it only happens if the system’s core functionalities relate to your needs. And yes, some businesses may need both.

Research well before you buy and then enjoy how streamlined your business becomes.

To ERP or Not to ERP: Should SMEs Invest in Enterprise Resource Planning?

If small companies expect to thrive in today’s competitive business environment, they must be willing to take the necessary steps. That includes investing in software that can make their business operations more efficient and give them a competitive edge. Enterprise Resource Planning (ERP) software is one such system that small businesses must seriously consider.

Is ERP too “big” for small businesses to handle? Not necessarily.

Small business owners must rather be worried about what they’re missing out on by not incorporating this type of system in their companies. ERP systems enable organizations to become better equipped at navigating the competitive business landscape.

Larger businesses understand the value of this system and it’s high time smaller companies realize it too. Many small business owners view an ERP as expensive—which it is. But it only takes a look at the benefits associated with this system to realize that it’s a worthwhile investment.

What is ERP?

ERP is a key software product designed to manage a company’s productivity, order processing and inventory. This system handles and manages business aspects such as:

  • Revenue management
  • Materials
  • Orders
  • Staffing
  • Manufacturing capacity

And the best part is that the above-mentioned functions are handled by a single interactive database management system.

Still sceptical about investing in this system? Maybe answering the following questions will get rid of all uncertainty.

Which Small Businesses Can Invest in ERP Systems?

You’re probably thinking this system is only designed for businesses specializing in specific industries. But the is an ERP can be used by small businesses across all industries which include but aren’t limited to:

  • Manufacturing
  • Retail
  • Human resources
  • Accounting
  • Construction
  • Agricultural

Are ERP Systems Really Suitable for Small Businesses?

Small business owners cite funding limitations and lack of technical support when it comes to investing in ERP systems. Frankly, both reasons were valid in the past, but not anymore.

Granted, there weren’t many ERP systems suitable for small business back then, but thanks to recent technological advancements, there are more practical solutions available.

What Benefits Can Small Businesses Expect from ERPs?

Costs aside, what are the benefits you’ll forfeit as a small business by not investing in an ERP system?

Increased Efficiency

In the absence of ERP software, chances are that each department has its own information system. This means relevant data can’t be shared and accessed across all departments. ERP systems are designed to integrate this data across you departments which:

  • Eliminates duplication of efforts: No two departments will have to re-enter the same data.
  • Minimizes errors: Because there won’t be a need to constantly export data, you’ll notice a significant reduction in errors.
  • Reduced expenses: Since data is automated, you don’t need to assign many people the task of capturing data. This reduces costs associated with human resources.

Quick Decision Making

Fast decision making is crucial if businesses want to keep up with their competitors and satisfy customers. If departments have individual information systems, you can expect delays—and red tape—before decisions are made. This is because most decisions can only made based on available data.

That’s where your ERP system comes in; it provides real time data to the relevant departments. As a result:

  • Decisions are made quickly
  • Obstacles and loopholes affecting productivity are detected on time
  • Relevant departmental heads are always in the loop regarding the overall production picture

Increased Productivity

Is your business slacking on productivity? Maybe staff are spending most of their time entering and re-entering data. ERP streamlines business processes so that staff can focus on increasing volumes and devising new strategies that can improve productivity.

When to Consider Investing in ERP Systems

We get it; businesses set goals. And one of yours may be to invest in ERP systems in the third year of your business operations. While we respect adhering to your strategic plan, there are some cases that warrant immediate implementation of ERP systems and can’t wait for the three-year mark.

Consider investing in an ERP system right away if:

  • You now find it time-consuming to process a large volume of data. Are you now heavily relying on the use of Excel spreadsheets?
  • You’re overwhelmed by keeping track of client interactions.
  • Processing orders and updating inventory has become a tedious & cumbersome process.
  • Your sales forecasts are now based on guess work.
  • If accessing solid facts needed for decision making has become problematic.

What to Consider Before Picking an ERP System

Congratulations for deciding on investing in what may very well be one of the biggest investments for your business. But don’t pick the first system you come across.  As a small business you want to invest in a system that’s specific to your industry and meets your needs. Opt for software that’s manageable and cost-effective.

Answer the following questions before making your final investment.

Is it User-Friendly?

Ideally the ERP system you pick must have a responsive interface that your staff will find easy to navigate

Is it Customizable?

The software must be scalable according to your business objectives. It must allow you to pick the features you want to use and have room to adapt with business growth.

Does it Need Frequent Upgrading?

With any software, regular updates ae mandatory. However, you must pay attention to the terms regarding upgrades. Do the updates attract a certain fee? Opt for software which has locked upgrade fees that don’t increase with future releases.

Is it Secure?

Are the passwords strong? Who is authorized to view certain data? Pick a system that’ll keep your data secure and only accessible by relevant parties.

Does it Come with Support Services?

Software that comes with sufficient technical support is ideal. Pick a vendor that provides you with personnel for set up, training and ongoing maintenance.

Final Words

Are you convinced an ERP system is something your business is in need of? Invest in ERP software and watch your business flourish.

7 Top Tools for Enterprise Resource Planning (ERP)

ERP ToolsRunning a business is no walk in the park—buy you already know this. Integrating the various facets of a business and aligning them to your main organizational goal can be pretty daunting.

We get it: all departments in your organization are crucial and contribute to your business success. But let’s face it; some are more important than others and require extra management and monitoring.

Savvy business owners understand this. They’re constantly on the look-out for systems and processes that’ll make prioritizing and integration of these departments easier. Are you part of this progressive business minded group?

If not, it’s time to jump on the bandwagon by employing the Enterprise Resource Planning (ERP) software that’ll make running your business a little easier.

What is ERP?

Picture a system that integrates the different departments in your organization to function in a logical and methodological manner. When you do this with an ERP the end result is an easy and uniform flow of information under clearly defined controls.

What Tools Must be Part of the ERP System?

You won’t be doing your business any favors by simply opting for the first ERP software you come across. An effective ERP system needs to have certain tools if you expect seamless performance.

We’ve taken the liberty to highlight the top tools you must consider non-negotiable in your system.

Top Requirements

Regardless of the system you pick, at the very least it must be able to fulfil the following requirements:

  • Contain simple and intuitive interfaces that are easy to operate.
  • Have a common database that can be easily accessed by users throughout the organization.
  • Be compatible with all the departments in your organization.
  • Have search functions that allow users to obtain whatever information is required to perform tasks to the best of their ability.
  • The system must be both customizable and scalable. Users must have the ability to add—or remove features—depending on their departmental needs.

What Are the Top Tools to Consider?

Certain tools are mandatory in any ERP system in order to meet the above-mentioned requirements. Let’s look at them below.

Database Management Tool

The first aspect that must be present in the ERP system you pick is a data storage and information management function. Knowledge—or in this case information—is power in any organization. And as such it must be managed accordingly.

The type of data storage functionality you pick will depend on the industry your business specializes in and common examples include:

  • Relational databases
  • Content management systems
  • Repository applications
  • Transactional database

Regardless of the type you pick, you have the option of hosting it locally, remotely or in the cloud. Your business needs, capacity and resources will determine which is the best option for you.

Permission Based Controls

As mentioned earlier, data is vital in any organization—but only if it’s in the hands of the right people. While we advocate for seamless data integration throughout your various departments, not everyone must have access to certain information.

This is why the system you pick must have interfaces which contain suitable permission controls. This will determine who will gain access to data.

Is the data open to editing or must it only be read? You don’t want unauthorized personnel having the ability to edit an important document drawn up by management. Not only can this result in potential fraud, but such undesirable loopholes can cost the company dearly.

Workflow Management Tool

For businesses to function effectively, processes, decisions and tasks need to be conducted in a logical manner. This is where a workflow management tool comes in. The software must have a clearly defined workflow that has suitable access levels depending on the users’ authority levels.

Reporting Tool

Different reports are generated in organizations on a daily basis. What’s important is that the data contained on the reports is readily accessible when needed to aid in decision-making or facilitate certain tasks.

An ERP system must contain a functionality that allows these reports to be available in real time. Imagine missing out on a scheduled delivery to a customer because you didn’t realize the items were now ready for dispatch. Such unprofessional conduct impacts negatively not only on your business operations, but image too. A system that notifies the relevant staff regarding such information is invaluable.

Communication Tools

Communication of information to various stakeholders is the order of the day in all businesses. Whether you’re sending emails or using instant messaging platforms, you want a system that allows you to perform such tasks quickly and efficiently.

The ERP system you pick must offer tools that automate such tasks both at individual and group levels. Features that must be present within these communication tools include:

  • General broadcast
  • Instant chat
  • Automated mail generation

Analytical Tools

Decision making is a crucial aspect in any organization as it influences the smooth flowing of operations and tasks. In some cases, people can only make decisions based on information on hand.

The ERP system you pick must have analytical tools that are designed to make such information readily available. Such systems will provide you with information that allows you to perform a number of tasks such as:

  • Tracking sales
  • Monitoring customer behavior
  • Comparing results

This information will better equip you to identify areas that need improvement or more resources.

Resource Allocation Tools

Distribution of resources can’t happen in a haphazard manner. You risk misappropriating resources which can prove to be costly to your business. An effective ERP system must have resource allocation tools that give you a clear indication of:

  • Resources utilized
  • List of departments that received resources to avoid duplication
  • Optimum utilization of resources
  • Current and future workloads

Conclusion

The above list of tools isn’t entirely exhaustive. There are many functions in your business that’ll significantly benefit from incorporating ERP software. These include anything from human resources to time tracking management systems.

Is this a software tool you feel your organization will benefit from? Give it a try and watch your business soar to greater heights.

CRM Vs ERP: What’s the Difference and Which One Do You Need?

The layman may use the terms Customer Relationship Management (CRM) and Enterprise Relationship Management (ERP) interchangeably. And understandably so, considering how the two systems tend to overlap each other regarding services offered.

Both systems are responsible for handling contacts, quotes, facilitating orders and forecasts to mention a few. It doesn’t help that several vendors suggest that CRM is incorporated under the ERP systems.

But are they the same?

If you’re looking to purchase either of the two, then differentiating them is the first step. Only then can you pick the right software to meet your business needs.

Fortunately for you, the guessing and assumption game is over. We’re here to outline the main differences between these two software programs. We’ll also take it a step further by advising you on which system you may need. But of course, we can only recommend; the final decision is yours.

Different Users

There might be confusion on how the footprints of both systems are more or less the same, but there’s no uncertainty regarding who uses them. So, we’ll make this our first differentiating factor.

The main users of the CRM systems interact directly with customers. These are people involved in the sales and marketing function of organizations. They aren’t involved in the logistics and fulfilling of orders. Their job is to convince prospective customers to purchase the company’s products or services.

So, who then deals with the actual processing and logistics of fulfilling orders? The ERM system users. Personnel that fall under this bracket include:

  • Factory managers
  • Buyers
  • Production schedulers
  • Supply chain personnel
  • Finance personnel

The above-mentioned staff don’t work in a customer facing environment. They seldom have to call a customer—unless of course they’re responding to a complaint regarding logistics.

A CRM system user won’t even know how to operate an ERP system—and vice versa. And yes, that’s how different the systems are. Usually IT staff are the only people who can probably access and use both systems for maintenance or upgrades.

Core Functions & Features

ERP

As alluded to earlier, one of the core functions of ERP software is financial management. The following categories fall under the finance category:

  • Transaction journaling
  • Accounts payable
  • Accounts receivable
  • Treasury
  • Tax
  • Quarterly statements
  • Reporting and decision support

CRM

The core function of CRM is sales. Therefore, the only financial management systems you’re likely to find on the software include:

  • Invoicing
  • Revenue recognition
  • Tracking sales figures and leads

Planning and Logistics

ERP

Anything you can think of that involves factory planning and productivity is incorporated under the ERP system. Here we’re looking at tasks which involve:

  • Procurement
  • Production schedules
  • Inventory management
  • Distribution and shipping
  • Supply chain management

CRM

Since the main emphasis of CRM users is on the number of customers interested in the organization’s products or services, features on the system will include:

  • Which product or service has been ordered?
  • Who ordered the product?
  • How many products are likely to be ordered in future?

Additional Services Offered by CRM

As the name suggests CRM personnel are interested in looking for new customers and building ongoing relationships. They’re always trying to devise new strategies on retaining these customers. This is why CRM software has the following features:

  • Lead qualification
  • Quote generation and order configuration
  • Contract establishment and termination
  • Ongoing account management
  • Renewals and repeat orders

Which One Do You Need?

You have the basic information regarding what the two systems entail, so which one do you need? Quite frankly, you need both. You only need to figure out exactly how much of each software program you need to buy. And this will depend on the following factors.

Size of Organization

Are you a small or large company? If you’re a large organization, the decision has already been made for you. You need a full-fledged ERP system that can manage all aspects of the production and finance functions. You’ll also need a fully-fledged CRM system to handle all your sales and marketing functions.

Smaller companies can afford to pick and choose the features they want from both the ERP and CRM systems. Chances are small businesses rarely have all departments from production to sales up and running.

Case in point; there’s no need for a small accounting firm to go all out by investing in a fully -fledged ERP and CRM system. Such a firm can easily thrive on just an accounting package and contact management system. Additional features from both systems can always be added on with time as the business grows.

What Does Your Company Need?

Your business needs will also determine which features of CRM or ERP software are needed. Of course, there are certain functionalities that all businesses need regardless of size such as an accounting package.

Even if you’re a small business and don’t have an accounting function, you’re still going to outsource the service. Otherwise how else will you reconcile your accounts?

On the other hand, there are some functions that you can do without as a business depending on your area of speciality. If you don’t deal with inventory management, then a data warehousing feature on your ERP isn’t necessary.

Industry Regulations

As a business owner, you know that you don’t operate in a vacuum. There are laws and regulations you must adhere to if you expect to remain in business.

The General Data Protection Regulation (GDPR) requires you to respect customer privacy and keep your financial information in as few systems as possible.

The system you pick must have features that adhere to the above-mentioned regulations. Either that or you risk being on the wrong side of the law.

Final Words

Sure, both the CRM and ERP systems handle contacts, companies and orders as mentioned earlier, but the contexts are different. It’s clear that you need both systems—what you’ll need to determine are the exact features to incorporate.

Needless to say, your budget will also influence the system you pick.

Have we cleared the confusion for you regarding these two systems? If you have more questions, please leave a comment below.

11 Common ERP Mistakes And How To Avoid Them

In today’s world, your business is up against the best of the best. In order to stay ahead of the rest, you need to have the best business management software.

The way your business collects, stores, manages and interprets data will determine your success or failure. This article will assist you as a business owner in identifying the common mistakes often made and in turn it will help you avoid them.

Leaders in the industry admit that many of the experts in the field of ERP have made crucial mistakes when it comes to selecting, installing and executing an ERP system.

The mistakes that the industry leaders made, have helped in crafting this article. We identified the 11 common mistakes they made when they sought out ERP systems for their business.

1.     Thinking One Size Fits All 

Firstly, one of the biggest mistakes that businesses make is not taking the time to determine the need for business specific solutions. Your business needs to appreciate its uniqueness. Not all ERP systems are built the same and so one size doesn’t fit all so pick wisely. The next few points will help you get it right.

2.     You Don’t Determine Your Need

When you have a growing business and you have limited time, the last thing you want to do is sit down and assess what requirement your business has. The default result would be to take existing structures and make them into the ERP solution.

This is where many businesses fail. They assume that the existing structures will work with an ERP system. The business underestimates the importance of assessment and information gathering.

If you do invest the time to find out what you really need, you can realign your business process and improve your ability to perform and deliver.

3.     The ERP Doesn’t Work for Everyone 

Do you employ one person, 100 people or 10 000 people? No matter the number, every person who will be involved in working with the ERP system must have an input. They must help determine the requirement for the ERP system that will best suit the business and its end users.

Many companies only focus their attention on the top leadership structure when taking inputs on the ERP system requirements. But often these aren’t the true end users of the system.

When all stakeholders are involved in the designing of your organization’s ERP solution, they have an entrusted awareness of the system. This can make them more committed to making it work.

4.     Money, Money, Money

When any business embarks on an exercise of developing and implementing an ERP solution, they need to forecast the financial implications this system will incur. Over and above the initial cost of the system development & design is the ongoing maintenance of the system.

When there’s insufficient capital available to fund the project, the business will resort to a system that’s not designed for their operation and they ‘settle’ for the second or even third best option.

The solution is to budget well and look for a system that matches your needs as well as your financial resources.

5.     Not Considering On-Site Versus Cloud Based ERP 

Every business is unique. There are differences in terms of industry, the platform it trades on as well as the geographical area you conduct your business. Simply because a cloud based ERP works for your competitor, doesn’t mean it will work for you.

If your business has stable and secure internet connectivity, subscription payment system and your employees can work remotely, then the cloud-based ERP solution will best suit you.

The on-site ERP system will best work in a business that has a dedicated IT department or specialist division. This type of system also requires a high amount of start up capital as there needs to be updated servers and in-house hardware.

6.     Paying for Enticing Features You Don’t Need

Features of an ERP system should only assist your business in achieving its desired goal, of performing and delivering a service. Many business owners are dazzled by the impressive array of features that the systems offer. They end up wasting money on features they’ll never use.

What business owners should focus on is:

  • The industry track record
  • Customization options
  • Flexibility and scalability to suit your business
  • Effortless incorporation and integration

7.     Trying to Do Everything at Once

An ERP system is a complex creation to develop and add to your backend. Business owners or IT specialists shouldn’t be concerned with developing and implementing a system all at once. The different parts of the system need to be developed and then assembled piece by piece.

Using a step-by-step process will ensure you have a workable system with the end user involved in each step to make the system efficient and effective.

8.     Not Managing the Change

Every employee needs to feel secure in his or her ability to get the work done. That is why change management is such an integral part of the development and implementation of the ERP system.

If management or the business owner ignores the importance of this aspect of management, they won’t effectively implement the system. Add this element to your timeline during the planning phase.

9.     Not Supporting the Implementors

The employees that implement the system need the support of management. In many cases when the team isn’t supported it results in poor decision making and integration which could eventually lead to a redundant system.

Help them implement and maintain the ERP system now so you have a better chance at success in the long-term.

10.  Communication, Communication, Communication

In both personal and business relationships communication is key to success. You need effective communication between individuals, between departments and within departments.

A priority should be to get the specifics of what is needed in the development of the ERP solution so it serves you well on a continual basis. For this to happen the end users must be empowered to regularly communicate their concerns or opinions.

11.  The Absence of a Maintenance Plan

Throughout this article we mentioned the maintenance of the system. The reason for a maintenance plan is to ensure that the evolving environment and business will be taken into consideration. Without it the system that works to your benefit today may not be relevant in a few months’ time.

Conclusion

The primary focus of any business is successful operation that will ensure its sustainability and growth over the years. If you pick your ERP system for your business, make sure you avoid the 11 mistakes that many business owners and IT specialists made.

If you learn from their mistakes you can experience your success a little sooner than they did.

Cloud ERP vs On-Premise ERP: A Comprehensive Comparison

If there was an easy answer, we would state it right here. But as with many business solutions, deciding between a cloud ERP and an on-premise version, is a very personal choice. It’s almost a cliché, but it’s true: Find what works for you.

But it’s challenging, right? Technology changes so rapidly that it’s difficult to know what is the best long term decision for your business.

We’re going to help you: Your best bet is to make decisions with as much information as possible on hand. And we summarized the most important below.

Definitions

Let’s start with the basics so there are no misunderstandings.

Cloud ERP

“In the cloud” is becoming a popular term in many environments, also in ERP. If you pick this method your data will be hosted by the ERP service provider. It doesn’t even use the vendor’s own hardware always, but rather your data is held on the internet ‘cloud’.

One of the unique features is how you access this information. You’ll be using your internet web browser. This type is often called SaaS (Software as a Service). You and your employees don’t need to download software to your computers necessarily. Everything happens on the cloud.

Recommended read – “5 Good Reasons to Deploy a Cloud ERP“.

On Premise ERP

This system will be installed on your premises as the name suggests. It will be using your own hardware and servers. What you may not have thought of is that it will also be your IT team managing the data, even though you have a service provider offering you the program.

Now, how do you pick between the two?

Vital Knowledge Before You Initiate ERP

Because there is no right or wrong method to use, don’t let the decision dictate to you. The best starting point is to assess how you currently function and finding an ERP that aligns with it in as many ways possible.

However, if a certain method will be more beneficial (we’ll discuss that below), yes, it’s worth investing in the necessary assets to make it work.

Now, write down your priorities and then see how the differences below will help you achieve your personal goals & suit your preferences.

The Important Differences

We’ll describe each scenario and offer our opinion on the best option. However, don’t simply take our word for it. Remember, it’s about your personal preferences, needs and capabilities too. See how it applies to your unique situation before deciding which one comes out on top from your perspective.

Costs Involved

Your equipment determines how effective your ERP will function and when you have an on-premise ERP the responsibility lies with you:

  • Obtaining hardware and servers
  • Employing capable IT personnel to maintain, upgrade and deployment
  • Managing customizations

This is a huge capital investment at the start of the venture, though you may pay less each month to a service provider. You also have to pay employee salaries.

In contrast, a cloud ERP doesn’t require you to invest in assets and most of the maintenance work is done by the SaaS team on your behalf. You don’t pay salaries so your only expense will be monthly fees.

An added bonus with a cloud system is that your IT personnel can focus on other improvements in your company, rather than maintaining the ERP. This is often a full time requirement, leaving no time for other projects.

Winner: It seems there’s a clear winner as cloud based ERPs will cost you less in the long run, even though you’ll commit to monthly payments. If you already have hardware and servers on hand, you may consider using them though. Some may simply have to opt for the cloud option because of a lack of cash flow.

Changes Over Time

You need to pick an option that makes long term sense. You don’t want a solution only for today, but one that will ensure optimal functioning months and years from now. That means your software must move with the times:

  • Technology changes and you can’t afford falling behind
  • Your business will change and your ERP must keep up

How do the two options support these scenarios?

Upgrades are necessary but they can create problems in on premise ERPs. Usually if you upgrade your software, you’ll lose previous changes, such as customizations your IT team implemented. This means every upgrade requires a tedious implementation and customization process. This often leads to businesses not doing upgrades at all.

On a cloud based ERP upgrades are effortless. The vendor implements the upgrade and everyone using the SaaS instantly has access to the new features. Customizations can usually be incorporated seamlessly.

Of course your staff must be prepared to often see the new changes, with or without prior warning.

There may be challenges to integrate a cloud based system with your unique setup, but the characteristic of quality cloud ERPs is that they are flexible.

Winner: Cloud ERP. If you don’t like sudden changes you may want to implement changes yourself however; as and when you’re ready.

Is There a Better, Faster Performer?

Of course, you want to know how this will affect your day to day functioning, right. Here are a few facts:

  • It’s faster and easier to implement a cloud ERP as you don’t spend time acquiring an infrastructure
  • A cloud ERP is more accessible to employees
  • If you don’t have quality internet connections an on-premise system works better
  • Having multiple users won’t affect the efficacy of a cloud based system

Winner: Your location and internet access determine the winner

Can One Save You More Time Than the Other?

Studies show even after using the cloud method for years, some users still pay up to 50% less compared to creating your own server system and employing the staff it will require to maintain.

Winner: Cloud ERP

What is More Secure?

The industry took its time before businesses decided it’s safe to store sensitive personal or client information on the cloud. It is easier to keep data secure on the cloud, contrary to what many believe.

Today it’s common knowledge that it’s easier and more cost effective to store data safely on the cloud. Vendors often offer backup services, disaster recovery services and industry standard security features. Doing this by yourself requires a lot of effort and money.

Winner: Cloud ERP

Conclusion

These are only a few aspects that play a role in deciding the best option: Cloud vs On-premise. Did you write down your score according to your unique setup? Which method came out on top?

If you need help in choosing the right type of ERP for your business, do contact us.

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