Given the numerous challenges that manufacturers have faced over recent years, many are busy devising smart roadmaps for navigating their business successfully into the future. As well as hoping to minimize the disruption created by external events, such as supply chain disruption or rising prices, these organizations will be looking to drive productivity, improve cost-efficiency, protect their business from rising cyber threats, and incorporate the latest digital transformation technologies.
While there’s a range of different solutions these businesses are considering, the implementation of a cloud-based ERP system will lead to significant benefits.
Those with legacy systems face mounting challenges, from lack of up-to-the-minute and accurate data, to poor internal collaboration and data sharing. In the worst instances, departments will act as functional silos, wasting endless time on tasks that could be streamlined or automated.
In fact, redundant data and business systems that cannot interact with one another are the two most significant challenges businesses reliant on legacy systems face today. For managers operating without ERP software for the manufacturing industry, it can be difficult to appreciate the full extent of any deficiencies or issues, when compared to operating with a specialized, modern ERP solution. They only have one vantage point, making it far more difficult to overcome unforeseen challenges or disruptions.
A cloud-based ERP solution enables manufacturers to plan and adapt as the industry changes, as well as mitigating against external threats and disruption. Here’s how:
Scalability with a reduced IT spend
One of the biggest benefits of the cloud is scalability. When it’s time to grow the business or add another location, the cloud allows you to expand your information and business process quickly and easily.
The cloud-based model of software delivery eliminates – or significantly reduces, the amount of money spent managing on-premise IT systems. There are no servers and hardware to install, maintain, upgrade, and replace, and no need for a large IT staff to perform these functions. There is no need for a help desk, maintaining a library of user licenses, and downtime is rare.
Daily or weekly data backups are also no longer performed by on-site IT personnel but are handled automatically through the vendor, as are software updates and provisioning of software to employees.
The central environment can add the new licenses and capacity to your business, and then deploy them to you in just a few hours. With the cloud, there is no need to order a new server and then wait for it to be installed and programmed. You can easily adjust performance and resources to meet your expanding business’s needs much quicker than with an on-premise solution.
After experiencing a server crash at its facility in 2019, Nature’s One made the decision to invest in Deacom ERP’s Cloud. This server crash brought the business to a complete halt for two days and also lost an entire day’s worth of financial data due to the timing of the backup schedule. Since implementing their ERP in the cloud, Nature’s One is now able to provide a higher level of system reliability and accessibility to users.
Protecting against cyber threats
Perhaps most importantly, ERP providers can now deliver first-line protection against cybersecurity threats such as viruses, malware, ransomware, denial of service, phishing and other types of attacks.
When you consider the vulnerabilities of manufacturers – with so much data being shared between departments, vendors, and customers – a security breach can put a business at risk. It can also cause violations of federal and state laws.
Organizations with older systems are exposed to even greater risks, as these systems are easier for cybercriminals to hack. Updated protections aren’t continuously delivered and implemented, as they are with a cloud-based system and this process often relies a lot on a team member remembering that a certain update is required – a process vulnerable to human error or oversight.
Data in a cloud solution is more secure because of strong firewalls, penetration and vulnerability testing, layers of backup, and redundancy. Cloud storage involves more than data being saved to multiple offsite servers. Cloud service providers maintain a network that is dedicated to data storage.
These storage areas are sometimes referred to as a ‘network behind the servers’; they enhance storage capacity. The same data is saved to multiple storage areas (redundancy) to ensure against one of the servers going down. Should that happen, the compromised server ‘fails over’ to one of the other servers in the network. This process protects data should a disaster strike.
Increased efficiency and reduced overhead costs
Since the cloud requires no software installation or maintenance, you and your staff are free to spend more time growing your business, not on monotonous, manual workarounds. Additionally, you will have more room at your facility since you do not have to house an onsite server. Having access to data in real-time improves business planning, quickens the decision-making process, and makes it easier to respond to customers’ needs.
By using a cloud-based ERP system, you can overcome the barrier that has kept you from making the commitment to a new business management solution—cost. A cloud-based system requires no infrastructure investments such as servers, hardware, and software updates. It also eliminates the need for large IT teams to maintain and the expenses associated with upgrading since the software is always current. With cloud solutions, the upfront fees can be dramatically lower than a legacy or on-premise system. Monthly costs are based on a subscription type service and are much more predictable.
Improving transparency and communication
Software modules designed specifically for manufacturers bring information transparency and interoperability to every area of the business, from the shop floor to customer relationship management, sales management, and project management.
Through the ERP, personnel communicate internally as a cohesive team and externally with vendors and customers, engineers communicate with machines, and machines communicate with one another.
Integrating all these functions and business data into one system automates and simplifies data transfer between departments. This allows teams to quickly identify any concerning trends and take action before they become an issue.
The cost of an obsolete ERP is simply too high
Manufacturers that hold on to older systems, or invest in newer systems that are not cloud-based and Industry 4.0-ready, stand to lose ground to competitors and will be slow to adapt should they encounter any unforeseen challenges or threats. Many manufacturers we speak to are well-aware of this fact, and are acting with urgency to choose the right cloud-based integrated ERP solutions.
Contact us today to learn more about the benefits of moving your business to a cloud-based ERP.