Reasons to Choose Cloud-Based ERP Systems | FirstBit blog
ERP & Business Automation

Why Move to Cloud-Based ERP Systems?

BY FirstBit | Published 28 October 2022 | Updated 16 November 2022
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Why Move to Cloud-Based ERP Systems?

As more and more businesses move to the cloud, it's no surprise that cloud-based ERP systems are becoming increasingly popular. 53% of organizations with ERP software use cloud-based solutions instead of on-premises platforms.

And why not? Cloud ERP solutions are less expensive to customize than their on-premise counterparts, offer real-time data, and promote collaboration across the organization. 

So, whether you’re looking to implement an ERP system for the first time or upgrade your existing one, choosing a cloud-based solution makes sense. 

Not sure why cloud ERP solutions are the right choice? Read on to understand what it is and how it can benefit your business. 

About Cloud-Based ERP

Cloud-based ERP is a type of enterprise resource planning software hosted on a remote server and accessed via the internet. It was first introduced by Netsuite in 1998. However, it evolved significantly over the years. 

What started as a way to integrate and centralize business processes now uses technologies like AI, ML, and Big Data to help companies worldwide get the most out of their investments. 

Modern cloud ERP systems like FirstBit allow you to leverage business intelligence to make smarter, data-backed decisions in minutes. For example, you can generate reports, drill down to metrics that matter the most, and automate VAT calculation in compliance with the UAE VAT law.   

But is this the only reason why cloud ERP is popular? No, there are even more!

Why Move to the Cloud?

Reasons to Choose Cloud-Based ERP Systems

On-premise ERP systems require significant upfront investment (servers, hardware, space, etc.) to deploy and maintain the software. Not only is this expensive, but it is also time-consuming.  

You must stick to the desk even after the deployment to get the necessary information since it cannot be accessed from outside the office. If you have sales agents in the field, they will likely need to make multiple trips back and forth. 

On the other hand, cloud-based ERP offers more agility and flexibility as you don’t have to worry about system maintenance and upgrades. In addition, as the business grows, you can add more users and features to the system at a nominal cost. 

Besides, with cloud ERP, companies can access the system anywhere, anytime, using an internet-connected device. This is great for organizations with remote employees and those with field workers (like construction businesses).  

Reasons to Move to Cloud ERP

Today, cloud ERP systems are typically subscription-based. As a result, they offer many advantages over traditional on-premise ERP systems, including lower upfront costs, scalability, and flexibility.

Here are 12 reasons why you should switch to cloud-based ERP.

1- Lower Costs

The total cost of ownership (TCO) for enterprise resource planning software can be a significant barrier to entry for many businesses. Cloud ERP reduces the TCO by allowing companies to pay for only the resources they need on a pay-as-you-go basis (also known as the SaaS model). 

Cloud ERP also reduces your IT costs by eliminating the need for an internal IT team to manage the software, freeing up resources for other projects.

Here are some ways cloud ERP systems help lower your operating costs. 

  • No upfront investment: You don’t have to pay a huge amount for the software license. Instead, the initial cost only includes the monthly or annual subscription plans that you choose based on the features you need and your budget. 

  • No need to buy expensive hardware: Since cloud ERP implementation happens on third-party servers, you don’t have to spend on buying or maintaining IT infrastructure (like servers, space, personnel, etc.).

  • No disruption during maintenance: On-premise ERP typically requires you to pause your operations during maintenance and upgrades. However, that’s not the case with cloud ERP. Instead, your vendor will install software updates in the background and keep the system running 24/7. 

  • No miscellaneous costs: Cloud ERP eliminates the need for installing additional security tools (like firewalls) and helps comply with local regulations. All of this at a single price (i.e., the subscription fees). 

2- Upgrades and Maintenance

As with any software, your ERP system will need upgrades from time to time. These updates could include bug fixes, security updates, or new features. 

You must take care of it yourself when using an on-premise ERP solution. Unfortunately, this means additional investments in IT resources and downtime (until your team installs the updates in every system). 

However, your vendor will take care of the maintenance, upgrades, and patches when you use cloud ERP. They often do this outside working hours, ensuring little to no downtime. Also, these updates are rolled out across the organization, meaning all your employees can use the latest version at once. 

3- Access to Emerging Technologies

The latest technologies are all the rage, with new advances emerging frequently. Although some of these technologies (like AI and big data) have been around for decades, only recently have they become affordable enough for mainstream adoption. 

Other emerging technologies (like three-tier ERP) are still in their infancy but have such a huge potential that many companies are already showing interest in them.

And while technological enhancements like business intelligence and big data help make more accurate forecasts, identify patterns, and generate actionable insights, they require significant investments. You will need to build data infrastructure for processing and hire personnel with specific tech expertise. 

But, cloud ERP provides a faster and more cost-effective way to leverage these technologies by integrating them into their software. Furthermore, you only pay the subscription fees and get access to emerging technologies to outperform your competitors. 

4- Security

why switch to cloud based ERP

Since most companies deal with sensitive customer data, any potential leak would invite legal action and hurt their reputation. Thus, if they use on-premise ERP software, they must keep the system secure from physical and virtual attacks. 

This would mean investing in dedicated secure buildings, security personnel, antivirus, firewalls, and whatnot. And this is a recurring experience!

However, you don’t have to worry about security in cloud ERP systems. Cloud providers have in-built features to comply with stringent security requirements and are always looking to strengthen their systems. 

Besides, their business depends on their service availability. Therefore, cloud ERP providers provide 24/7 support, implement cutting-edge security measures (encryption, 2FA, etc.), and offer data backup options. 

5- Implementation

Implementing an ERP system on-premises can be lengthy and requires careful planning and scheduling. The time it takes to implement an on-premise ERP solution varies based on factors like

  • Size of your organization

  • The complexity of the system

  • Required customization

According to various sources on the internet; it can take three months to two years for on-premises ERP deployment. However, cloud solutions can be configured and deployed faster, most taking less than 100 days. 

This is because your vendor is responsible for installing the software. They also have ERP experts who can help you customize the system faster than your internal IT staff could. As a result, the tool can meet your business’s unique requirements and even adapt to a rapidly changing market. 

6- Real-time Data

Remote work is here to stay. In fact, 37% of employees would take a pay cut of 10% just to work from home. Even if you’re in an industry that requires physical presence (like construction or manufacturing), your workers won’t likely sit at a desk to access the system. 

This makes it imperative for businesses to use a system that even their distributed workforce can access. And what’s better than the cloud? 

Since the application is hosted in a centralized location, it offers accurate, real-time data. This means when someone enters data, everyone in your organization (with access to it) can see and use the data to do their jobs efficiently.  

For example, Euroboor, a leading manufacturer of high-quality magnetic drilling machines, found it challenging to see critical data from different periods. However, after choosing FirstBit ERP cloud, they were able to integrate all company departments (including human resources and customer management) and saw a 100% increase in document flow speed. 

7- Customization Opportunities

Tailoring on-premises ERP to meet specific business requirements requires ERP consultants (and IT personnel) to do it efficiently. In addition, since everything has to be done in-house, you might also need to make software and hardware upgrades to support the customization. 

Even then, it could take months to customize the software. And if you have offices in multiple locations, it can take even longer. 

However, with cloud ERP, you can deploy the software across regions within months. Your vendor will help you customize the system per your requirements. There are no hardware or software upgrades involved, meaning you can design the system to meet your objectives with minimal investment.   

8- Simplified Compliance

Irrespective of your industry or business size, there are always certain regulations you need to comply with. For instance, if you operate in Dubai, you need to abide by the following laws:

  • Taxation (VAT)

  • Audit of financial records 

  • Economic substance regulations

  • Anti-money laundering and counter-finance tourism

  • Ultimate beneficial owner (UBO)

However, these laws vary depending on where your company is registered in the UAE (mainland or free zone). 

And these regulations are the basic ones that every company needs to follow. Even more industry-specific laws (like healthcare, construction, manufacturing, and defense) exist, and non-adherence can invite penalties and even legal cases. 

Manually updating your on-premise ERP system to adhere to these regulations is tedious. In addition, as these laws change, you will have to update your software to reflect it. This will consume not only a lot of time but also resources. 

On the other hand, cloud ERP systems comply with all the local and international provisions (including HIPAA, GDPR, and GAAP). Besides, they are constantly looking for changes in industry-specific regulations and proactively making changes to their systems.

Many cloud ERP vendors even have localization functionalities, allowing you to switch between different countries’ regulations and ensure compliance globally.

9- Accessibility

As mentioned above, cloud ERP is more accessible than on-premise software since it’s available online and can be accessed from anywhere with an internet connection. 

This allows users to work from their homes and other remote locations, as well as from their phones and tablets. It’s also easier for employees who travel frequently or have multiple locations to access the same data from any device.

A cloud ERP keeps key decision-makers connected outside of regular work hours (just in case). It also allows businesses to tap into the best talent (irrespective of location). 

10- Scalability

On-premises ERP is more expensive to scale than cloud ERP. It requires you to purchase additional hardware and may require more IT staff to manage the increased complexity. 

On the other hand, cloud ERP allows you to scale up or down as needed. All you need to do is upgrade your plan, and you can accommodate more users and even get access to the best features they offer. 

Even when you open new offices, you can deploy the same ERP with minimal investment, as configuration can be done remotely. This eliminates the need for sending an implementation team to every location. 

When you feel you’ve outgrown your ERP, you can quickly migrate to a different vendor who can better accommodate your needs. 

11- Disaster Recovery

Fire, flood, hardware issues, or a ransomware attack, anything can destroy your data and affect your day-to-day operations. Therefore, having a plan to recover lost data and continue operations is a must. Unfortunately, although many companies have backup servers for disaster recovery, they don’t usually back up their data daily. 

Cloud ERP services, however, have in-built disaster prevention and recovery solutions. This could include storing copies of data in multiple geographic locations to prevent a single point of failure. This allows you to recover your data more efficiently and economically. 

So, no matter what happens, you won’t lose your data with cloud ERP!

12- Better Bottom-Line Results

Last but not least, when you choose cloud ERP, you can rest assured that you’re in safe hands. 

  • First, you won’t have to shell out thousands of dollars monthly on additional expenses like maintenance and security.

  • Second, your employees can work from anywhere and be productive.

  • Third, your employees can collaborate and access real-time data.

  • Fourth, the vendor offers 24/7 support to solve problems instantly and even takes care of security.

  • Fifth, you can scale the system as required.

  • Sixth, you can quickly recover your data during a disaster.

These benefits mean you don’t have to worry about costs, data, or business disruption, as the cloud has a solution for everything. 

Success Stories in the Cloud

Choosing a cloud-based ERP has been rewarding for most companies. These benefits include faster deployment, lower initial costs, access to today’s technology, and more. Here are some case studies to help you better understand cloud ERP’s advantages. 

1- Zenith Smart Technology (Zenith Group)

Zenith Group comprises ten companies in the construction and consultation industries. And while all ten businesses were growing, there was a lack of coordination between teams and departments. As a result, they failed to manage project costs.  

Their primary objective was to find a solution that would help:

  • Build coordination between teams and departments,

  • Controls the project cost to stay profitable,

  • Generate customized reports, so they know where they stand,

  • Manage the inventory, 

  • Track the project progress, and 

  • Track the labor of each project.

After thorough research, Zenith Group chose to settle with FirstBit ERP because it has all the features they need, is pocket-friendly, and the team's professionalism was impressive.

The result?

  • Better coordination between teams

  • Increased organizational efficiency to work better while growing

  • Customized and error-free reports as per requirements

  • Complete awareness of profit and loss due to reasonable cost-controlling features

2- Suma Gourmet General Trading LLC

Suma Gourmet is one of the largest distributors of premium fresh products in the Middle East and the Maldives. They even joined with AC Damate, the largest Turkey producer in Russia and third-largest in Europe.

Suma Gourmet wanted to optimize warehouse operations, accelerate order picking, reduce item search times, and make shipment and financial management more efficient. 

After thoroughly analyzing the solution with the FirstBit team, they created a strategic plan. As a result, 

  • Picking and shipment speed increased by 2.5 times.

  • Efficiency increased multifold thanks to the analytical modules.

  • Productivity increased without new hires.

  • Accounting and document management are consolidated in a single accounting system.

3- Continental Line Shipping and Freight LLC

Continental Line Shipping and Freight LLC provides its clients with air, sea, and road logistics services. They also manage the storage of cargo, processing, and customs clearance. The company has two warehouses in Jebel Ali, Dubai.

They relied on spreadsheets for most of their tasks, such as salaries, internal loans management, and business expenditures. Not only was this time-consuming, but prone to mistakes. 

Thus, they needed a solution to minimize manual errors, automate tedious tasks (like sending invoices), improve payroll calculation, and ensure reliable accounting of revenues and expenditures. 

They reached out to experts in FirstBit for a solution. After understanding their requirements, the FirstBit ERP for multinational and foreign companies was chosen. 

As a result, 

  • Reduced the time for generating job cards and invoices by 3–4 times

  • Eliminated accounting mistakes related to human factors

  • Improved the accuracy of calculating salary and other payments to company employees

  • They were able to generate accurate and up-to-date reports to make real-time decisions

Move to the Cloud with FirstBit

You must know how to choose the right cloud ERP system to ensure successful implementation. But when you’re with FirstBit ERP experts, you don’t have to worry about anything. As a result, FirstBit has helped more than 270,000 customers manage their businesses more efficiently and realize the financial benefits of cloud ERP. 

FirstBit ERP helps comply with the UAE’s VAT laws and generate reports automatically, saving time and eliminating manual errors. It also facilitates higher productivity and efficiency and allows you to take advantage of today’s technologies. 

Ready to get started with FirstBit? Let’s connect over a cup of coffee and discuss your requirements!

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