Cloud ERP provides agility and makes financial sense


In today’s digital economy, IT leaders are constantly grappling with the need to match their infrastructure capacity with capital expenditures. Typically, capacity falls short and hinders their ability to take advantage of new opportunities, or too much capital is tied up in underutilised assets.

Being able to scale up quickly allows an organisation to achieve growth and seize new opportunities but IT procurement processes can be prohibitively lengthy and expensive. IT agility can be achieved by moving certain systems and workloads to the cloud, which allows organisations to quickly procure more capacity. Offered on a pay per use basis, the cloud allows organisations to get the capacity they need without having to make major capital outlays.

While the cloud offers many ways for organisations to discover cost savings, cloud ERP has its own unique suite of economic benefits. Legacy on-premise ERP used to involve large capital investment in servers and infrastructure, but cloud ERP is managed and maintained in secure data centres which removes the need for these upfront costs.

Cloud simplifies ERP connection and frees up time for high value tasks

For organisations with a broad geographic footprint, cloud ERP allows them to quickly add new users and locations to the system, without having to be tethered to physical assets such as servers. All that is needed is an internet connection (and, obviously, security clearance) to be added to the system and start working. This is the competitive agility that every organisation now craves.

With management and maintenance of physical infrastructure passed on to vendors, IT teams no longer spend their time dealing with servers, middleware and databases. On top of the potential savings on salaries, more value is gained from the IT team by using it for projects that deliver innovation and business value.

Without the need for physical deployments of on-site infrastructure, cloud ERP also provides exponentially faster time to value and return on investment. Without upfront capital costs and the need to install software across the organisation, the benefits from ERP capabilities are felt much sooner.

Cloud removes risk of IT obsolescence

It’s these capabilities that are the icing on the cake from a cloud ERP system. Software quickly loses value when it isn’t upgraded on a regular basis. We know from many of our clients that their legacy ERP systems are often several years behind in their version updates. Not only is that incredibly difficult to manage when integrating new hardware, it means the organisation misses out on a variety of valuable ERP capabilities that its competitors are using.

At the end of the day, it’s about scalability and elasticity for seizing new opportunities while also having access to reliable services and taking advantage of significant cost efficiencies.

There are few organisations who want to specialise in hardware and infrastructure these days. If physical infrastructure isn’t a competitive advantage, it is much better to focus resources on the competencies that make the business great.

Paul Kruger is Director of Regional SAP Sales and Marketing, DXC Oxygen.

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