Cloud ERP has come to stay, more and more organisations are adopting it, and the numbers are stunning.

To give you an idea, global IT decision-makers have admitted that 95% of all workloads will be in the cloud within the next five years. According to a recent forecast from Gartner, worldwide end-user spending on public cloud services is forecast to grow by 21.7% to a total of $597.3 billion in 2023, up from $491 billion in 2022.

Why are businesses deserting on-premise systems, which they’ve relied on for decades, and racing to the cloud? It turns out there are so many benefits the cloud brings to business. Let’s examine some of the key ones, shall we?

1. Business agility

A study conducted by Harvard Business Review reveals that business agility has become the primary advantage delivered to business by cloud technology. In fact, the study found that business agility led as the number one driver for organisations in adopting the cloud.

In a separate report, McKinsey & Company found the benefits of agility to include “faster revenue growth, greater and more lasting cost reduction and more effective management of risks and reputational threats.”

2. Reduced IT costs

In traditional settings, businesses that need to implement a robust business management system would necessarily have to invest in both hardware and on-premise software. This often results in high setup and maintenance costs.

On the other side, businesses that have adopted cloud ERP software have found that the costs significantly decrease as the technology allows for minimal infrastructure requirements.

Cloud-based solutions mostly require paying monthly or annual fees for the software package and support, thereby giving businesses spend control and driving down the costs of operation.

3. Data storage and sharing

With traditional software, financial and non-financial data is recorded and stored in a hard drive within the business premises. Although this method keeps your data away from the outside world, there are several downsides like the possible loss of data in the case of a disaster.

Cloud solutions store accounting data in the cloud, protecting it from physical intruders and accidental losses. Plus, in a matter of seconds, you can share data securely across your organisation or even with authorised third parties.

4. Accessibility

The restrictive nature associated with data storage in on-premise setups limits management’s and workers’ capability to access data from anywhere or at any time.

Fortunately, cloud-based accounting and ERP solutions are altering this aspect of business management by providing access to business documents and data — financial reports, customer information, suppliers, just to name a few — in real-time no matter team members’ locations or time zones.

5. Real-time collaboration

When the boundaries of time and distance are removed, real-time collaboration becomes possible and team efficiency is heightened.

Also, as managers and employees are no longer waiting for information (for example, in the form of email replies), the entire process is streamlined, bottlenecks are eliminated, and objectives are achieved more quickly.

6. Scalability

As your organisation grows, so will your business needs. Companies often find themselves struggling to scale in-house accounting and business management infrastructure — they often need to buy more hardware, expand their storage capacity, hire more people, spend long hours on tasks, etc.

But cloud computing is designed to scale effortlessly as your business scales. A sophisticated cloud system should be able to handle any amount of data you throw at it.

7. Flexibility

Cloud also offers great flexibility in terms of the ability to scale up and down in response to demand.

As an example, if your data has grown to the point where you require extra bandwidth, a cloud-based solution will be able to meet that demand instantly versus your IT infrastructure undergoing a costly, complex manual configuration.

8. Faster workflow and reporting

When it comes to workflows and reporting, the physical method usually requires several approval steps from people who would need to be physically present in the office. If a manager is out of the office, for instance, reports would have to wait until they return, and this usually leads to unnecessary bottlenecks.

This means the reporting process — such as those of financial reporting and regulatory reporting — takes a long time without a reliable cloud-based system that allows authorised persons to immediately retrieve the reports on their own.

Some cloud financial and business management software applications even come with automated reporting features that can produce accurate and up-to-date reports without the need for redundant multiple approvals.

9. Data security

Another way cloud computing is transforming business operations is in the area of security. Whereas in-house infrastructure is subject to data loss, theft, or damage, financial and non-financial data is far more secure and confidential with cloud-based tools such as NetSuite.

In one study, 94% of businesses say they saw an improvement in security after implementing cloud solutions.

10. Disaster recovery and loss prevention

If all of your valuable data is tied to office computers, you might end up permanently losing your data if your local setup experiences a problem.

Disasters are inevitable and your organisations may not have control over them, but you can do something, even before the disaster happens, to control the effects.

Cloud-based ERP provides quick data recovery and loss prevention from crisis such as natural disasters or even power outages.

11. Business continuity

In the case of an emergency scenario, you should be able to quickly access your data again to continue conducting business operations.

Cloud computing makes this possible, minimising downtime and loss of productivity.

12. Automatic software update

Cloud-based applications such as Oracle NetSuite ERP are automatically updated by the providers. This eliminates the need for the IT team to perform a manual update, which is often time-consuming and effort-demanding.

This also means your organisation can save money spent on both external IT consultation and internal IT resources.

13. Business intelligence at your fingertips

Some cloud-based solutions offer integrated cloud analytics for business intelligence and insights.

You can use the insights to increase efficiencies and inform business decisions.

14. Environmental friendliness

Cloud infrastructures are generally more environmentally friendly compared to traditional software, and therefore, more sustainable. For instance, cloud ERP uses virtual services rather than physical products, improves energy efficiency, and cuts down on paper waste.

Where to Start?

Cloud deployments have reached a tipping point across many industries, causing massive disruption and introducing a fundamental shift in the delivery of services and operation of business.

Many organisations are realising the benefits that cloud technology brings, from improved agility, data security, and lower costs of ownership, to scalability and increased efficiency among other advancements.

It is time to go from a slow, manual, paper-based system to the cloud. Start your journey today with a free consultation call with FinanSys!