5 Reasons to Migrate From On-premises to Cloud ERP

Summary: In this blog post, we will discuss why a business needs to migrate to cloud ERP from on-premises and which is the best ERP solution for small and mid-size businesses.

Earlier, businesses operated their businesses, irrespective of size, using ERP hosted on-premises. These ERPs were successful in helping them attain growth through a positive ROI. However, new challenges require modernized ERP available on the cloud. These cloud ERP solutions enable businesses to become agile and scale as the business grows.

Indeed, ERP software installed on data centers enables businesses to get major benefits. But it comes with multiple limitations, especially the downtime it offers. Therefore, it is crucial for modern businesses to embrace cloud ERP solutions that enable them to get a competitive edge.

In this blog post, we will discuss why a business needs to migrate from on-premises to cloud ERP and which is the best ERP service for small and mid-size businesses.

So, without consuming more time, let’s jumpstart by understanding the basics first.

Enterprise Resource Planning, or ERP, is a well-known business software system that is installed by a business on its local server. It is famous for the tight control it provides to businesses. It eliminates the need for a business to worry about privacy and the security of data.

It enables businesses to get a higher level of customization, especially when it is compared with cloud-based ERPs. It can be tailored to meet the specific operational requirements of a business and offers faster response time.

It is a one-time investment for a business, as they can get an on-premises ERP system with it. Let’s understand this through a use case.

ABC Company from the professional services industry struggles to get a competitive edge, and their ROI is taking a tumble. So, their management team is looking to get an ERP solution that provides more flexibility and productivity to a business.

For this, they chose to make an upfront investment and installed on-premises ERP software on the local server. This move has increased their profit margins and revenue as well.

Businesses of any size face many problems ensuring sustainability when they use an on-premises ERP. Therefore, they are looking for an ideal cloud ERP solution. With this, they experience an exponential growth rate.

Many businesses have migrated to cloud ERP in the past, and according to this trend, it has become normal for them to embrace cloud-based ERP. After migration, businesses received multiple benefits, including scalability and increased productivity compared to the on-premises version.

To understand it in a better way, we will take a modified example provided earlier.

ABC Company has been using on-premises ERP for over 2 decades, and it has now become a headache for them. The operational team is suffering a lot due to its limited capability to meet modern-day demands.

So, they migrated their data from on-premises to cloud-based ERP. This move has resulted in a significant increase in their revenue. Moreover, their profit margins have doubled in the financial year.

Many businesses from different industries and sizes are still using outdated, on-premises ERP. They fear migrating to cloud-based ERP, as this move may hamper their core business operations and affect profitability. The following 5 reasons show why businesses migrate their ERP solution from on-premises to the cloud.

The cost to implement a cloud ERP system and migrate to it is lower than on-premises systems. The cost of implementing the cloud or migrating to it involves fees for setting up virtual environments and software licenses. However, the exact cost varies largely according to the industry.

Moreover, the maintenance cost in the case of using ERP (cloud) is comparatively lower for businesses. It is the feature of automatic upgrades that makes cloud-based ERP software more suitable for businesses with less budget to spend on IT and a cloud business software suite.

Technology is evolving at an overwhelming pace, and businesses need to leverage it to stay competitive. Businesses should not just follow which technology competitors are using; they must leverage it first and put it to use for generating higher ROI. Cloud solutions offer it by helping them leverage modern technology like AI, ML, cloud analytics, etc.

Businesses using on-premises ERP need to invest more up-front to leverage different technologies. They require it as they need to invest in it through the upgradation of data centers. Therefore, businesses migrate from on-premises to cloud-based ERP.

On-premises ERP has a drawback for businesses of all sizes as it limits the availability of data in real-time or near real-time. Therefore, it prevents businesses from accessing updated data to make proper decisions.

The cloud solves this problem by enabling the finance and operations teams to access and use data in real-time. Since the software and information are stored in a single location, the information you get remains up-to-date.

Cybercrimes are increasing through illegal phishing and malware practices against businesses. To prevent it, businesses can’t rely on outdated technologies followed by the ERP systems available on-premises, as they are not capable of preventing it.

This is another great reason businesses are switching from on-premises to cloud ERP to get a competitive advantage. Data security is a key concern these days for businesses due to excessive use of technology by unauthorized users.

Currently, businesses are looking for an ERP solution that grows with the growth of a business. On-premises ERP solutions don’t allow businesses to get the capability of fast-growing businesses to get a scalable solution.

Therefore, businesses are migrating to the cloud to leverage scalability that meets the rising demands. ERP on the cloud ensures that business processes easily expand and accommodate new changes, from mergers & acquisitions to the introduction of new products and services.

NetSuite, based on the cloud infrastructure, enables SMBs and large businesses to accommodate new processes easily using cloud capabilities. It helps to ensure business continuity even in case of disaster recovery. It has copies of data stored at multiple geographical locations and prevents disruption of business due to failure at any one point.

Indeed, implementing NetSuite Cloud ERP is not an easy process, especially when a business wants to implement it correctly. Therefore, they need the services of an expert NetSuite solution provider like NetsuiteExpert.

Is your business also facing similar problems due to the use of outdated, legacy ERP systems stored at local data centers? Your business needs to use upgraded ERP software available on the cloud. Get the NetSuite cloud-based ERP software today from NetsuiteExpert.