SMEs and Cloud ERP Systems: The Bigger Picture Unveiled!

SMEs or Small and Medium Enterprises are businesses that are transitioning through their initial growth phase and are heading to become a full-fledged enterprise. Operating on tight budgets and strict delivery schedules, such organizations strive to make optimal use of their available resources.

ERP (Enterprise Resource Planning) systems are software suites that help SMEs, and even the bigger organizations, in planning out their workflow and automating them in a systematic manner. This results in optimal usage of the available resources and helps enterprises in sustaining the competition.

Cloud ERP systems are the ones that can be deployed on popular cloud platforms like Azure or AWS. It reduces the on-premise deployment costs associated with such software and it is scalable. So SMEs can achieve a better Return on Investment (ROI) in the least amount of time.

Benefits of Cloud ERP Systems at SMEs

Opting for a Cloud ERP system and implementing it in your business offers a host of benefits. I am illustrating five of them –

Minimum requirements of technical staff: The deployment of Cloud-based ERP solutions is handled by the staff of cloud platforms. They install and integrate the additional hardware that is required to support the system. Thus, enterprises don’t need to spend on recruiting such additional resources.

Subscription benefits: All cloud platforms operate on the SaaS (Software-as-a-Service) or PaaS (Platform-as-a-Service) business models. As services are offered on a subscription basis, there are no unexpected costs. The expenses can be tracked easily by enterprises.

Fast, secure and agile operations: When running an organization, security and agility become crucial for achieving long-term success. Cloud-based ERP solutions enable business owners and stakeholders to respond to the dynamic needs of their clients faster. It gives them the required competitive edge!

Increase in productivity and innovation: In Cloud ERP, the technical problems related to the software are resolved by the vendor. Hence, enterprises can focus more on product innovations and business development.

Consistent and automatic upgrades: Cloud vendors release upgrades related to security and other issues in a consistent manner. These upgrades are applied automatically to your ERP software as well. It increases your capabilities as a business organization.

Case Study: Vehicle Tracking Solution

I am highlighting the case study of J-Tech tracking solution to spot the cost benefits that are offered through cloud as Software-as-a-Service (SaaS).

J-Technologies India Ltd (J-Tech) is a part of the Euro €60 million IndoShell Group. J-Tech provides an integrated solution through the brand “VCare” to maintain the vehicles in an effective manner, incorporating all the latest industry standards with GPS Tracking.”Vcare” is a time-tested application and comes on a “Pay-as-you-go” model reducing the need for high initial investment in either hardware or software. The model provides the clients with the flexibility to pay for the product based on usage and the freedom to exit. 80+ clients are using this application without hassles.

The cost-effectiveness of both GPS tracking solutions and cloud-based GPS tracking solutions provided by JTechnologies were analyzed by industry experts.

The cost involved in developing the in-house GPS tracking solution is categorized under the following captions and the related costs are specified in the table below:

The total accountable cost for the development of the application is Rs.19,00,000 per year (approx.).

The cloud-based GPS tracking solution provided by J-Tech through (Software as a Service) SaaS Model on Cloud is charged only Rs. 550 per month for a vehicle, Rs.55000/- for a fleet of 100 vehicles monthly and Rs. 6,60,000 yearly (approx.).

From the above working model, it is possible to save up to Rs. 12,40,000 per year (Rs. 19,00,000 – Rs. 6,60,000) when a client adopts a cloud-based solution.

Challenges Involved in Cloud ERP Implementation

The key challenges encountered while implementing a cloud-based ERP solution are variable. They vary depending on whether the implementation is to be done from scratch or if an existing solution has to be migrated to the cloud. However, most of the challenges are common to both methods and they are as follows:

1. Identifying the optimum architectural and licensing models.
2. Issues related to technical aspects such as set up, migration, maintenance, testing, etc.
3. Issues in the performance and reliability of the cloud-based ERP.
4. Complete monitoring, investigation and building trust in the implementation of the cloud-based ERP
5. Customization of the system according to the organization’s needs
6. Limited resources and budget constraints.
7. Training the staff in adopting new technology.

Summing it Up

Undoubtedly, Cloud ERP systems have been effective in restructuring the business workflow of small to medium enterprises. With rapid implementation and scalable IT infrastructure, cloud delivery models are pushing SMEs towards digital transformation. There are some challenges associated with this process, which can be overcome with strategic planning and risk assessment.

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