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Return on Investment and the Cloud ERP: How it really matters

Return on Investment and the Cloud ERP: How it really matters

What is ROI

Business leaders use the method of return on Investment (ROI) calculation to determine whether to make an investment and continue doing so. In a return on Investment calculation, we compare the expected/actual monetary benefit of a certain investment with the cost of the investment.

Return on Investment and the Cloud ERP

ROI calculations in the cloud ERP are visible in terms of faster deployments and reduced investment burden & maintenance fees. The cloud ERP deploys in a matter of days or weeks at the most with minimal disruption and is much more user friendly. They also do not require the heavy up-front costs of an on-premise ERP system.

Cost Savings

The biggest advantage for a cloud ERP is that it does not require the initial heavy investment for infrastructure creation, licensing fees, IT staff acquisition, maintenance costs as an on-premises ERP system.

Visible Benefits

The anytime, anywhere access on any device by a Cloud ERP is significant as the modern workforce is a dispersed workforce on the go. You can also use this functionality in a manufacturing facility and environment without having to physically go to a workstation to tackle issues.

Another benefit of a cloud ERP solution is that it comes with additional benefits in the form of user training. The quantum of training required is much lesser. There is ROI generation in terms of productivity savings and reduced travel bills.

Fewer organic servers are required to run the system in a cloud ERP model. This creates fewer labor hours needed to attend to those server issues and maintenance costs & hassles. This drives better returns on investment for cloud ERP solutions.

The total cost associated with the ERP solution is much lesser with a cloud ERP and is a small operating expense.

Visible Return on Investment Impact by a Cloud ERP:

  • Reduced IT Costs with Cloud ERP Software: Costs on software, hardware, IT personnel and maintenance are reduced. Cloud ERP allows for one single data repository at locations making it accessible to all relevant employees even on the go.
  • More Accurate Billing, Accounting and Faster Quote to Cash: The quote to cash time is reduced. The accuracy of billing is increased. Their monthly or yearly financial closing formalities and compliance is also simplified.
  • Increase in User Productivity: Employees don’t have to manually enter data, consolidate information on spreadsheets. Productivity automatically increases. It becomes easier and faster for employees in one department to access information needed from a different department.
  • Increase in Customer Satisfaction: Cloud ERP companies are now focusing on the customer experience aspect more than ever and are making it a key strategy in business.
  • Improved Compliance: It is a given that all companies must establish and document its compliance and a Cloud ERP takes care of that.
  • Improved accounting integration: While accounting departments follow set reporting cycles, cloud ERP systems can support timely posting of financial transactions across all facets of a business. The ability to see comprehensive transaction impact provides a comprehensive picture of the business.

Key Parameters impacting Return on Investment due to a Cloud ERP:

  • Improved Profitability:

-Reducing inventory levels through better inventory management

-Improving invoice accuracy can decrease collection cycles and improve cash flow.

-Monitoring financial performance through updated budget-versus-actual analysis can help create appropriate           corrective actions

– Lower cost structures

  • Improved Customer Experience:
    The Customer Experience is a critical element of a successful business strategy and no business can afford to neglect the quality of the customer’s journey. Excellent customer service means providing the customer what they want, when they want it, where they want it with efficient processes. Measurements of customer service performance parameters is improved by a cloud ERP. Comparing these measures to historical results can identify trends and potential issues before they become full blown problems.
  • Improved Inventory Management
    Measuring the number and type of “stock outs” is a good way to monitor the effectiveness of ERP inventory planning processes. All ERP systems improve the tracking and accounting of inventory movements. It is the real time inventory planning capabilities of ERP solutions that provide the greatest benefit to the enterprise. You can avoid stock outs or having excess inventory. Real time and accurate inventory data is a key feature of the Cloud ERP.

Why VersAccounts

We at VersAccounts have created a secure cloud based multi award winning comprehensive ERP solution that is e-commerce and mobility ready.

Our solution is designed for fast growing businesses, between $1-$50M in annual revenue, looking to upgrade business management solutions.

We will help you in a structured manner to migrate your data seamlessly when you make the decision.

We’d love to hear from you.

Reference:

http://searchmanufacturingerp.techtarget.com/feature/Cloud-ROI-Finding-the-value-of-investment

https://www.nsacom.com/how-to-calculate-your-return-on-investment-for-cloud-erp-software/

http://www.klearsystems.com/blog/top-5-metrics-of-cloud-erp-roi-return-on-investment

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