Sunday, February 16, 2014

How cloud ERP can help you in ways that traditional products can’t



Through this channel I have been talking about the advantages of cloud and SaaS products for a long time. In this post I’d like to focus on a more specific area. An area that contains a large pool of potential customers, who at the same time are still facing basic problems in their journey towards a “computerized enterprise”. That of small business ERP and especially the Financial ERP.
By the term “Financial ERP” we define the software that performs the basic functions of book-keeping, sales and purchases, stock keeping customer/vendor order management and perhaps some more like basic workflows and some kind of business intelligence. These are requirements that small and medium-sized businesses are seeking to approach first, or they have already done so with not much success. Also, they are the kind of requirement that start-ups are trying to cover, since they touch the back-bone of the business function.
In this discussion, I choose to omit other, more specific ERP functions such as Production Planning, Capacity Planning, Warehouse Management etc., because if we are talking about a large enterprise that actually needs such advanced software modules, then they are probably large and complex enough to choose an in-premise product and customize it according to their needs. So, for them, a low-end small business ERP is probably not the right choice.
But let’s try to answer a very “hot” question for these small and mid-sized companies: What has a cloud ERP product more to offer than the existing in-premise products? To answer this question, I will not focus on the usual cost benefits of cloud and SaaS nor will I talk about the internal resources issues that an in-premise product will raise for the company. Instead, I think that there is a number of valuable, I believe, possibilities and functionality that cloud ERP can offer which traditional products can’t. The general idea is that a cloud ERP product can bring the necessary extroversion in the company culture. Having a working accounting or Accounts Receivable software is one thing; it allows you to keep correct customer records, track balances and do your book-keeping. And all that is just for your eyes to see! But what if you wanted to invite co-operators to join in and share knowledge, exchange data and participate in common workflows? One way to do it is by building a kind of corporate portal and implement such functions on that portal. But what if your core business software had already such capabilities? It would be easier, faster time-to-market less painful in terms of interfacing, data exchange and internal controlling & reconciliation. And obviously cheaper! Let’s have a look at some of them:

  • You could have regular vendors exchanging data and performing automated account reconciliation with your own Accounts Payable records. To go one step further, you could have vendors logging in your system and actually browse through the A/P records that you keep, so that they can acknowledge their correctness. Furthermore, if problems exist they (or you) could initiate a “disputable items” workflow to resolve the difference.
  • In case of contract-based billing, you could first seek your customer’s approval on an Accounts Receivable invoice before you proceed to the actual invoicing. That way, you would save time from erroneous invoices and the necessary corrections through credit notes etc. The time from invoicing to invoice payment could be decreased drastically.
  • In the above example, additional tools could accelerate response times even more. Email notifications for each invoice issued or for each approval required could be sent to the interested parties, to make sure that anyone who should take some action is immediately “tagged” in their mailbox. That very mailbox would even become their daily “to-do list” as far as your cloud ERP is concerned!
  • Customers could tap in your cloud ERP, browse inventories and make on-line orders. Of course, this idea is not applicable to B2C sales (you have your on-line e-shop for this purpose). But if you sell to wholesalers who need on-line information, don’t care about the e-shop bells’n’wistles and are particularly interested about the whole chain of the customer order fulfillment (not just the ordering part), then having them inside your ERP as business users could have some very significant benefits for the sales process as a whole.
  • A service provider may want to implement a “customer support” web system to accept requests from customers, classify them as tickets and process them accordingly. In these cases there may be a significant number of monthly invoices to attach behind each chargeable ticket. And this could be a manager’s and the accountant’s headache to process and invoice, every month. So a “ticketing” function inside your cloud ERP software (where your customers are also welcome to participate in the workflow) could be a serious issue to consider. There is no doubt that you could implement other kinds of ticketing systems; but an integrated one with your back-office invoicing?...

Once you decide to open your ERP and data to the outside world, the sky is the limit. There is a large number of possibilities and functions that you could design, to best fit your organization, business process and – at the bottom line – your reason for existence in the business landscape. The above are but a few examples that I regularly discuss with business owners (but also drive me to design new products and services).
I don’t claim that a cloud ERP software has the broadest span of functions and the best quality at the same time. But, in an effort to keep things simple for the small and mi-sized business, I would urge anybody to take a look at cloud ERP that meets all the usual requirements PLUS the functions required for the extroversion of the enterprise, before deciding to embark to a long and painful journey of purchasing and integrating the “best of breed” for each function that they wish to implement.

4 comments:

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