5 Lesser-Known Ways Cloud ERP Helps You Save Operational Costs
Opting for a cloud ERP solution not only negates the need for hefty hardware investments and their upkeep but also eliminates cooling requirements.
Deciding on an ERP platform is a big decision, a big commitment, and a big investment. That is why it is critical to get it right from day one. Companies implement an ERP solution for a variety of reasons that revolve around greater efficiency and productivity. Some of the objectives of an ERP implementation include unifying disparate business processes across an organization, improved reporting to allow for better analysis and forecasting, and accelerating the response to changing market conditions. While each enterprise may have its own unique set of objectives, they all share common aims. The cost savings and created value must be substantial enough to secure a compelling ROI.
Like other cloud service models, cloud ERP works on a pay-as-you-go model. This eliminates the need to invest in hardware with a defined product life cycle, which requires periodic upgrades and consumes considerable time, money, and resources. Cloud ERP allows businesses to preserve their capital for value-creating ventures such as business expansion, research and development, and customer acquisition, all of which directly contribute to the top and bottom lines of the business. Let’s take a moment, however, to look past the obvious benefits of a cloud ERP and discuss some of the lesser-known ways companies can reduce operational costs.
1. Best Cost-Saving Practices
Best practice translates into best cost efficiency. If you maintain your automobile according to the manufacturer’s best practices, you can, on average, extend the car’s life, save money through optimal fuel efficiency, and enjoy better driving performance. It is no different with your business because following best practices means business tasks and operations are accomplished more efficiently using fewer resources. It also provides other benefits that lead to added cost savings.
- Standardized processes based on best practices result in consistent and predictable outcomes that reduce waste and duplicate work.
- Utilizing proven best practices provides a clear framework for decision-making so that informed choices can be made quickly and confidently.
- Careful attention to best practices creates a more structured work environment that can lead to greater job satisfaction and lower turnover.
- Companies with a reputation for best practice adherence are often seen as more reliable and trustworthy, which leads to a better reputation amongst customers, suppliers, and partners.
All these benefits translate into greater cost savings and efficiencies. A cloud ERP solution, such as SAP S/4HANA Cloud, public edition, can ensure that your organization has the ready-to-go, preconfigured processes it needs to better perform on day one.
2. Energy and Space Savings
Companies are increasingly adopting sustainability and green initiatives driven by ethical, economic, regulatory, and reputational motivations. For instance, SAP’s data centers in Germany and North America have earned ISO 14001 certification, underscoring their environmentally conscious operations. Since 2014, SAP has harnessed renewable electricity for all its facilities, aligning with its carbon neutrality goals. Opting for a cloud ERP solution not only negates the need for hefty hardware investments and their upkeep but also eliminates cooling requirements. This shift can lead to significant reductions in energy costs. The space previously used for servers can be reallocated for other revenue-generating activities or reduced.
The direct energy savings from transitioning to a public cloud are just a starting point, however. True environmental stewardship involves some upfront investment in education and adaptation by those pursuing it. However, by collaborating with companies like SAP, businesses can efficiently achieve both energy savings and sustainability objectives in one move. Corporate stewardship can, in fact, be a cost-saving venture.
3. Grow Without Limits
Although there is often an implicit assumption that mergers yield value, the truth is that it typically takes companies two to three years to get full returns, according to McKinsey & Company. Streamlining this process can expedite value realization. A cloud ERP solution provides the scalability that businesses need to quickly adapt to acquisitions, reorganizations, and new business unit creation with flexible organizational structures and reports that can analyze the company across any dimension.
When implementing a cloud-based ERP solution, savings are realized from the very beginning as the ramp-up for a cloud ERP system is much faster than on-prem deployment. That is because the SaaS supplier handles all aspects of the hardware and software installation — all of which are performed by a dedicated staff with expertise in data center management. The limited configurations required by the end-user organization are conducted using an intuitive interface that makes alterations quick and simple. Companies can easily adjust their subscription levels based on their needs, allowing them to adapt to changing business conditions without undergoing expensive system overhauls.
It’s not just about cost savings, though. Cloud ERP continually introduces new capabilities that support business best practices without incurring additional costs or undergoing complex upgrade processes. This gives companies the chance to leverage innovation as soon as it is introduced. Cloud ERP fosters both scalability and innovative growth.
4. Enhanced Collaboration and Mobility
Think about the time you waste at home or in the office trying to find that one printed document you had just the other day. Time is money, not just in relation to the time it takes to find something, but the cost of using outdated data to make decisions can have long-term implications. In a hybrid workforce, your location managers, mobile sales teams and remote workers need to be able to access necessary information without needing to be at the company’s primary location, reducing travel and associated costs.
Mobile capabilities are built into SaaS ERP products rather than added on as an afterthought. For instance, SAP S/4HANA Cloud offers a Share to Microsoft Teams functionality that allows users working in Microsoft Teams to share a link directly to content along with the context in their ERP system. It also integrates with other collaborative platforms, including Google Workspace and Slack.
It isn’t just about mobility; it is also about consistency. Cloud ERP systems allow for real-time data updates. This means that when one department makes changes or updates data, other departments can immediately see and act upon those changes, ensuring everyone is working from the most current information. Whether accessing Cloud ERP from a desktop in the corporate office or a mobile device at home or on the road, users encounter the same unified experience thanks to the same universal interface.
5. No Effort Patching
It has become a constant mantra among IT departments — keep your systems fully patched with the latest updates. While patching certainly helps with cybersecurity and system performance, it is also a mundane, costly process for the IT department, which saddles highly skilled admins and technicians. By removing patching and updating from their plate, you could instantly free up considerable time and expense for them. This approach allows IT professionals to shift their focus from routine patching to more value-driven tasks.
Despite the best efforts of your internal IT team to stay updated with patching, there’s almost always a delay between when a patch is released and when it’s installed. However, with automated patching in cloud ERP systems, security updates are applied as soon as they’re available. This swift action extends to zero-day vulnerabilities, which are prime targets for hackers. Given today’s heightened emphasis on security, cloud ERP emerges as a decidedly more secure option.
Conclusion
Once you make the decision to transition to Cloud ERP, another pivotal choice awaits. Who do you partner with? Choosing a Cloud ERP vendor is much like choosing a partner because the success of the vendor is tied to the success of your business. SAP was recognized as a Leader in the Gartner Magic Quadrant™ for SAP S/4HANA Cloud, public in Cloud ERP for Service-Centric Enterprises for the second year in a row. Just as our customers continue to invest in their businesses, we continue to invest in making SAP S/4HANA Cloud, public edition even better with innovations that will make our products smarter and more efficient for the enterprises that depend on us.
Learn how SAP´s Cloud ERP can be the right solution for you.
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