Last updated on June 15th, 2020
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4 Reasons More Philippine Businesses Need To Move their ERPs to The Cloud
If there’s something we’ve learned about IT in the year 2020, it’s that relying on onsite infrastructure leaves your organization extremely vulnerable to outside disruption. Cloud-based enterprise resource planning software (ERPs) such as SAP Business One on Cloud has been available in the Philippines for a while now. However, adoption has been relatively slow, as businesses often rely on ad hoc solutions using unsuited software or traditional onsite (also called “on-premise”) ERP solutions.
The pandemic of 2020 and the resulting disruption in the movement of workers, supplies, and information has shown the serious limitations of onsite ERP systems. If your business is just now picking up the pieces or if you’re planning to start a new venture this year, it’s important to consider switching to or adopting a cloud-based ERP.
Here are some reasons Filipino businesses need to start moving over to cloud-based systems:
1.) Better security
This may seem counterintuitive, considering that an onsite ERP setup allows you to have direct access to the servers and computers that hold your data and systems. A cloud-based system, after all, has your data stored in a third-party provider’s servers, which could be anywhere in the world.
However, the problem with having a system onsite is that you have to commit to frequent security updates and maintenance — something not all small to medium Filipino businesses can afford to do reliably or correctly.
In a small business setup, rarely are the available IT experts or systems administrators able to completely master the ins and outs of the ERP system, as they inevitably fill multiple roles within the organization. As a result, many onsite systems become more and more vulnerable to cyberattacks and slowdowns as maintenance and update frequency inevitably slips.
Onsite ERPs are also far more vulnerable to unexpected catastrophes. For instance, an unexpected flood, typhoon, fire, or even power surge can quickly damage your data beyond recovery. If the vital data in your ERP or accounting system is confined to one computer as it is in many small businesses, even an employee spilling their coffee in the wrong place can result in thousands of hours of meticulous work down the drain.
By contrast, servers for cloud-based systems tend to be rigorously maintained by highly-specialized IT experts that know the ERP intimately. These systems may come with strict service level agreements that ensure security updates and backups are done regularly, and that downtime is kept to the absolute minimum.
Cloud-based systems also tend to feature multiple redundancies that further reduce the risk of catastrophic data loss to practically nil. More often than not, critical data is backed up regularly which means the negative effects of a data loss are restricted significantly. Also, cloud based-servers are often based in multiple sites that are geographically far from each other, making it extremely unlikely that one disaster can cripple your ERP or destroy your data.
All in all, if you’re concerned about security, cloud-based ERPs are usually the way to go, especially for SMEs or even larger organizations that cannot feasibly commit to maintaining an onsite system.
2.) Reduced maintenance costs
As we mentioned in the previous point, onsite ERP systems need to be maintained by a knowledgable administrator to perform as intended. Not every organization can afford such an expense or dedicate the needed time to maintain on-premise ERP systems. The needed labor alone makes onsite ERPs more expensive to operate than cloud-based ones.
But the additional expenses do not stop there. The maintenance of the hardware and the necessity to frequently back up the system and update security can lead to significant downtime, which can result in a loss of productivity and opportunity cost. Downtime is typically much less on cloud-based systems given the higher level of specialization of dedicated 3rd party IT workers and the larger investment in hardware and redundancy by cloud hosting services.
The cost savings in both these areas make an excellent argument for businesses of any size to move to a cloud-based ERP. Today, fewer and fewer large businesses rely on onsite ERPs, even if they can afford it, simply because of the lower cost and better performance for the money.
3.) Better business intel
Cloud-based ERP systems are typically easier to integrate with a variety of business intelligence solutions. Popular cloud-based ERPs such as SAP Business One can typically work with a variety of off-the-shelf and custom analytics, reporting, and data modeling solutions.
Because data access is faster and more straightforward in cloud-based systems, the organization can get access to timelier, more accurate reporting and modeling. On-premise systems are typically much slower and by the time data is accessed, it may not reflect current or relevant trends.
4.) Flexible working arrangements
This is perhaps the most obvious advantage in light of recent events. Businesses that had invested in cloud-based ERPs were by and large, far less affected by the pandemic compared to those that were reliant on onsite systems. Not only did transportation issues become moot, but a presence in an actual office was also no longer required for many types of positions, allowing businesses plenty of breathing room to cut down on costs, reduce health risks for employees, and maintain productivity throughout the crisis.
Having a cloud-based ERP system has implications that go beyond convenience. Organizations that employ such systems are also far more agile and better able to focus on growing the business, rather than on managing the ins and outs of their ERP. Cloud-based systems can thus be seen not just as a way to save time and money, but an investment in the security and resilience of the business as well.
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