8 Barriers to Cloud-Based ERP Systems and How to Address Them

Enterprise resource planning (ERP) software is a powerful solution for businesses across industries. By connecting systems and departments with integrated data, systems, and reporting, ERP solutions help companies transform operations, improve efficiency, and make better, more timely decisions.

While there are hybrid and on-premises ERP solutions available, businesses are increasingly choosing cloud ERP platforms. Doing so gives employees access to information no matter where they are or what device they're using, allows for better data backups and security, and lets your business retire outdated legacy business software tools.

Embarking on an ERP implementation is a significant undertaking that opens up ample opportunities for businesses. Yet such a project can be imposing, giving rise to internal objections. Here are 8 barriers to cloud-based ERP systems and how you can address them.

1. ERPs Are Capital-Intensive Projects

For years, ERPs had a reputation of being cash sinkholes, burdened by cost overruns and large initial capital outlays. Fortunately, the ERP industry has shifted its development approach to the cloud. Many cloud-based ERPs operate on a software-as-a-service (SaaS) model. That allows businesses to carry these expenses as ongoing monthly operating costs and not as capital costs.

There are additional cost savings to using a cloud-based solution. There's little need for hardware purchases and maintenance, nor for the storage, power, and cooling costs that come with managing an onsite data center. Businesses also save on the internal IT staff usually needed to maintain and upgrade business systems.

2. You'll Need to Redo All Your Processes and Procedures

Installing cloud ERP software offers your business an ideal opportunity to examine how work is done, and using the project as an opportunity to look closely at your policies and procedures is a smart move. It allows your organization to take a close look at processes that are outdated or, in many cases, driven by inefficient and obsolete software. For example, ERP solutions can automate approvals, reporting, reordering, and resource scheduling.

An ERP installation is also the chance to assess roles and responsibilities within your organization. While these changes may result in some anxiety for employees, it's also a chance to engage workers at all levels in identifying inefficiencies. In the end, the ERP installation is a way to drive down costs and alleviate bottlenecks.

3. An ERP Solution Means a Loss of Control

Technology disparities can create power centers within organizations. However, with shared information and a single source of data truth, your whole business benefits. A cloud ERP solution creates company-wide transparency, allowing employees to collaborate in new ways. By using the same tools and data, an ERP drives more innovation and digital transformation.

Real-time information, reports, and insights help employees at every level make better decisions. Your business will have access to production, financial, and customer information, all from the same data set.

In addition to your internal team, data and insights can be shared with suppliers, vendors, and your partner network as needed.

4. The Cloud Is Less Secure

Cyberattacks are growing at an alarming rate, targeting businesses of all sizes. The loss of company data means extensive costs, both financial and reputational.

A cloud ERP provides excellent defenses against hackers. ERP solutions include built-in security tracking tools and allow you to manage who has access to which data points, based either on role or group. Cloud ERP solutions offer simultaneous, automated updates to ensure that security issues are fixed quickly and uniformly. There are built-in backups and redundancies designed to keep data safe at rest or in transit, and accessible in the event of a natural disaster or cyberattack.

5. ERP Solutions Require Too Much Customization

There are many options for ERP solutions, including many industry-specific solutions with customized features designed exclusively for companies in that sector.

Your ERP solution should be flexible to allow for the use of custom fields, forms, and reports, in addition to the built-in reports that are standard issue. Partnering with an implementation agency can help solve concerns related to the time and manpower that goes into setting up custom items.

6. ERPs Are Too Difficult to Handle Business Expansion

One of the best features of a cloud ERP solution is the ability to scale rapidly. If your business is growing and you need more data storage, a cloud ERP allows you to be able to meet increased demand quickly, without the time and expense of buying, installing, and configuring additional on-site servers and infrastructure. If your business has seasonal fluctuations, you can adjust capacity accordingly.

7. Our Industry Needs to Meet Mandates that a Cloud ERP Cannot Support

Compliance is a growing issue for businesses of all kinds. Medical, education, and food and beverage businesses are subject to strict regulatory requirements related to things like personal medical information, student records, and safety protocols. Government contractors must demonstrate extensive cybersecurity measures to identify and address threats. In addition, state, federal, and international laws are increasing business requirements to protect customer information.

All these mandates need to be tracked and measured carefully to maintain compliance and avoid hefty fines. With different agencies requiring different reporting, your business needs an automated solution that provides detailed documentation.

8. Cloud ERPs Need to Work on Mobile Devices

Cloud ERP software makes it easy to connect to critical information regardless of the device and operating system. Apps give you access to data with smartphones, tablets, and laptops as long as there's internet connectivity and the correct permissions in place.

Cloud ERP solutions are transformational opportunities for your business. At ManoByte, we deliver cloud ERP software that eliminates data errors and reentry, grows revenue, improves customer experiences, and improves operations. To learn more about ManoByte cloud ERP solutions, contact us today.