For SMEs, Cloud-based ERPs ARE Key For Digital Transformation

The hallmarks of today’s society are constant change, unpredictability, and digital disruption. Companies must be nimble to manage this unpredictably changing terrain because satisfying the ever-changing business landscape needs more efficiently, swiftly, and cost-effectively is what defines success.

Gaining a competitive advantage is the goal of agility. According to Deloitte, it’s about improving a company’s ability to “react to and capitalize on its changing operational environment.” Being agile, according to McKinsey, involves a paradigm shift in which business and technology are no longer separated: it’s all about digital transformation.

Cloud technology has undoubtedly played the most important role in assisting businesses in digitally transforming to stay competitive. Indeed, during the pandemic-induced lockdowns, which saw firms scrambling to facilitate remote working, cloud use skyrocketed. Embracing the cloud allows for far more, yet it should be highlighted that the future of work will demand organizations to be flexible in where they operate, with hybrid work setups remaining viable options.

Cloud adoption, when done strategically, lays the groundwork for enterprise agility and helps it grow. It’s the starting point for digital transformation, which can result in a 30 per cent increase in productivity, operational performance, staff engagement, and, as a result, customer satisfaction for agile firms.

In the early days of cloud adoption, a Harvard Business Review survey identified cloud’s ability to increase competitive advantage, which 74 percent of business respondents have experienced. With advancements in this enabling technology over time, the case for cloud’s utility for businesses is only going to get stronger. Business management, which is at the heart of any company’s decision-making process, is one area where it’s most transformational.

A unified perspective of business activities is required for quick decision-making. This is possible with a cloud-based enterprise resource planning (ERP) solution. It links previously segregated areas of an organization’s operations (from accounting to warehouse management and more) in a safe, unified manner to give a company end-to-end, company-wide information. This is the way operations will be in the future.

Businesses of any size would profit from centralizing business management systems on the cloud, which has both cost-cutting and growth-supporting benefits. The benefits of cloud-based ERP adoption are particularly significant for many small and medium-sized firms (SMEs) operating on tighter budgets, with less capital, in an increasingly competitive environment.

The cost and time involved in manually updating the system to ensure data is kept up to date and security is maintained; the cost implications of scaling up, if necessary, should the organization grow; and the staffing requirements and costs associated with overseeing and providing support for the system are just a few of the challenges that SMEs face with on-site

ERPs. When an ERP is relocated to the cloud and managed by a single, reputable service provider who can provide 24-hour assistance, these restrictions are removed.

Global research done by Forrester last year bears witness to this. It looked at the financial implications of switching to platforms like Microsoft’s cloud-based Dynamics 365 Business Central, a comprehensive business management system. The requirement for new hires was decreased by 10%, while operational flow increased by 8%, according to the findings. Many factors contributed to the savings, including fewer support people, lower license fees and infrastructure, and the ability to replace third-party reports with more granular internally derived reports.

Benefits not quantified in the study but still significant included a further streamlining of operations due to easy integration with other Microsoft solutions, as well as real-time visibility of key business data and metrics enabling proactive, efficient decision-making by making timely decisions using comprehensive, real-time reporting, embedded analytics, and AI-driven insights.

Being able to use the same ERP capabilities as larger organizations without having to invest a large sum of money in on-site infrastructure and specialized IT teams is a huge plus for SMEs, especially in this economic climate.

Saving money and increasing efficiency is important but being able to adjust operational needs is especially beneficial for smaller organizations. An SME can swiftly scale up or down based on operational or budgetary needs using a cloud-based ERP. In other words, this solution can expand or decrease in response to the needs of the company, which is critical in times of upheaval when flexibility is required.

Maher Al-Khaiyat is the Regional Business Applications Director for Microsoft MEA.