Manufacturing Cloud ERP offers massive benefits for Businesses Seeking Reduced Costs, Organizational Flexibility, and Enhanced Efficiency
The use of manufacturing cloud services presents numerous benefits for companies of all sizes, which explains why the adoption of cloud-based services like Cloud ERP have been booming for years. The most significant benefits are separated into three big strategic categories that companies focus on: costs, flexibility/agility, and efficiency. Let’s look at the 8 biggest benefits the cloud can offer your business:
Reduction of Costs
All companies need to control costs while getting the most value they possibly can. The cloud helps in 3 cost-related areas:
- Low Procurement Costs: Because manufacturing cloud services are offered over the internet, companies save on investments in hardware, software, and IT infrastructure. This results in a lower capital commitment, which can free up limited capital for other core business areas, such as initiatives to retain important employees and customers. With the cloud, you pay only for what you actually use, and your capital isn’t tied up in expensive hardware or projects that may or may not deliver the value you seek.
- Flexible Operating Costs: By outsourcing the responsibility for operating a complex IT infrastructure to an external cloud provider, the costs for operating, maintaining, administering and updating hardware and software are completely eliminated. In addition, the lower power consumption leads to decreased energy costs, which – over the useful life – often exceed the procurement costs of a server. This also results in a reduction to the amount of time spent on IT and thus lower IT personnel costs. You not only reduce your infrastructure costs by moving to the cloud, you also have fewer headaches and can focus on your core business.
- Use-Based Billing: With the Cloud’s use-based billing, companies only pay for what they actually use with regard to their IT. In addition, there are fewer unnecessary additional costs – for example, for underutilized IT resources such as servers or unused licenses. Furthermore, the software subscription helps maintain steady liquidity because the subscription payments are in smaller amounts distributed across the term of the subscription, unlike when purchasing software, where payment is due immediately and in a large amount at the start of the project. In terms of cost reduction and efficient cash flow, it doesn’t get much better than use-based billing.
All companies need to be ready to adapt to change. Having an expensive, on-premise IT infrastructure makes you about as flexible as a muscle-bound weightlifter when you should be seeking to gain the speed and agility of a gazelle. The manufacturing cloud supports flexibility in 3 key ways:
- Scalability: Cloud services can be scaled to meet actual capacity requirements on demand, or at any time. This enables businesses to quickly and easily get necessary services with minimum effort or discontinue/turn off excess capacities when they exceed demands. Scalability is a core strength of cloud solutions, especially for high-growth businesses and companies with geographically dispersed locations or seasonal or cyclical business fluctuations. The scalability of the cloud, and its on demand pricing model, may be its two key benefits. The cloud grows with you.
- Location Agnosticism or Independence: The manufacturing cloud won’t just grow with you, it can go with you wherever you go, from your main office to that regional distribution center across the globe. You don’t need to install expensive on-premises infrastructure or integrate/upgrade systems when you have the cloud. The permanent, high availability of cloud environments ensures fully location-independent access to reserved applications and resources. Employees are no longer tethered to their workstations, but instead can access and work with data from anywhere around the world on their preferred end device – all they need is internet access and a good connection. That’s about as flexible as it gets.
- Competitive Agility: The Cloud also benefis companies from a technical and organizational point of view. Cloud solutions make it significantly easier to adapt to new conditions faster than conventional on-premise IT solutions. Change is a fact of modern business, and the cloud can support your agility: corporate structure change and new business requirements might mean you need rapid, new deployments of software, data storage, or computing power. Cloud helps you adapt quickly to change.
Efficiency is about doing more with less, and all companies need to drive efficiency gains to grow. The manufacturing cloud is part of that drive, as these two key benefits show:
- Time-to-Market: Shorter time-to-market is among the key cloud benefits. Cloud solutions are generally less complex than classic on-premise installations, making them easier to implement, which saves companies both time and money. Shorter implementation times make ERP systems and other manufacturing cloud-based applications available to companies faster. This has an obvious, highly positive effect on productivity.
- Focus on Core Business: The cloud approach shifts responsibility for the operation, maintenance and servicing of hardware and software to the cloud solution provider. Depending on the cloud operating model, your internal IT team does not have to invest any, or at least significantly less, of its likely scarce capacity. This allows unburdened capacities to be leveraged for value-adding activities so that companies can concentrate more on driving their core business forward. Industrial companies, in particular, often ask themselves whether the operation of complex IT systems really needs to be an in-house core competence. The answer, one enabled by the manufacturing cloud, is that it need not be.
Are you ready to learn more about Manufacturing Cloud ERP? To understand how the cloud can help your company control costs, enable flexibility, and drive efficiency, download the abas Cloud ERP brochure or start a conversation by contacting us.