By Eric van Rossum, Chief Marketing and Solutions Officer, SAP Cloud ERP
It’s exciting to see companies growing so fast that their systems and processes can’t keep up. But it’s also a critical juncture in the evolution of the business, as they need to pivot to a more scalable and capable solution—one that will not only meet their needs today but adjust to fit as they grow.
This is precisely the time when many of these growth companies begin to consider an ERP system.
Not long ago, it was possible to get by with a patchwork of applications, spreadsheets, and manual processes, with growth comes greater business complexity that demands the powerful orchestration of systems, processes, and people that ERP provides.
And in today’s connected, always on world, the cloud is the environment of choice for growing companies looking to deploy business and ERP systems.
Let’s take a closer look at the different ways cloud ERP helps growing companies.
Cloud ERP: Powerful technology at lower cost
From the time it was invented in the 1970s, ERP has been thought of as relevant primarily for large, industry-leading companies, who can afford the upfront costs—like licensing, infrastructure, configuration, customization, and implementation—and task entire teams to manage it on an ongoing basis.
The cloud changes that. It puts advanced ERP technology in the hands of small and large companies alike, without the need for significant upfront or ongoing costs. That means that, for growing companies, they can access the same capabilities as their larger competitors, out of the box and at a reasonable cost, enabling them to better compete in their industry.
As research firm IDC notes, “The broad portfolio of cloud services offered by leading providers makes it possible to use the optimum cost/performance service without increasing administrative costs or business risk. Less upfront costs. More flexibility. Pay only for what you need when you need it. And companies that prioritize application modernization and data augmentation technology projects can quickly realize reduction in budget pressure.”
Cloud enables companies to derive greater value from an ERP system at a lower cost and with less risk. But it also provides greater speed and flexibility—which leads us to our next two points in the case for cloud ERP for growing companies: a system that grows with you and that allows you to consume innovation regularly and rapidly.
Cloud ERP: ERP that grows with you
In the past, companies treated ERP as a moment in time. They built all the functionality they wanted into the system at the time of implementation, and then it remained relatively fixed. Adding functionality required expensive customization, which made upgrading to the latest software version even more difficult.
With cloud ERP, the thinking has shifted from a moment in time to a journey, allowing you to take alternate paths as your business evolves along the way.
Today, companies don’t need to worry about getting everything built into their ERP right out of the gate. They don’t have to (and can’t!) know what they’ll need in the future, as their businesses evolve, grow, and morph along with economic realities and opportunities. Instead, they can get started with what meets their needs today and add new functionality when necessary—often with just a click of a button.
Companies that plan to expand internationally is a great example. Cloud ERP offers localization tools that make it easier to expand into new countries with different languages, currencies, requirements, and regulations—and the system adapts as these requirements change.
Another growing trend is businesses that wants to shift from selling products to selling subscriptions, or to an as-a-service model. That has complex implications at the level of your core business processes; but with cloud ERP, companies have access to pre-built, standardized processes for these scenarios.
With cloud ERP, functionality isn’t fixed. It expands as you need it.
Cloud ERP: Rapid and continuous innovation
The pace of innovation is increasing and will continue to do so. Just look at how quickly generative AI has become a viable and almost necessary tool for businesses.
In the past, updating on-premises software and taking advantage of new innovations took months or years. Cloud-based innovations, on the other hand, can be adopted in days or even hours, accelerating the speed with which businesses can test and realize their potential.
“SaaS solutions provide the earliest access to innovation in collaborative applications, customer experience, AI/automation, data integration, and security that can be directly tied to critical business priorities,” according to IDC.
One company that’s taken this to heart is Komax Group, a Switzerland-based pioneer and market leader in automated wire processing solutions.
“Our market will be very different in 10 years thanks to AI, Industry 4.0, and the IoT,” said Tobias Rölz, Executive Vice President Market & Digital Services at Komax Group.
Komax turned to SAP to help position them to be ready to take advantage of innovation possibilities in their industry.
“SAP S/4HANA Cloud and corresponding SAP products such as SAP Integration Suite give us the foundation we need to harvest these innovations for our customers,” said Rölz.
The ability to adopt innovation rapidly and continuously is, of course, only as good as the ERP provider you’ve chosen. So, you also need to select the right cloud ERP provider who is going to deliver valuable innovations, on a regular basis, that are appropriate for your industry.
Growth is exciting. But with it comes a realization that the systems and processes that got you here won’t necessarily take you as far as you want to go. Cloud ERP gives you the powerful technology, flexibility, and access to cutting edge innovations you need to navigate your growth journey, no matter where it takes you.
