This is a common scene at small-/medium-sized manufacturers who want to upgrade their ERP: The CEO, CFO and CIO huddled in a room for a capital expenditures meeting:
“How do we justify the cost versus the benefits?”
“What else will have to be delayed or sacrificed to get this done?”
“What is time to value?”
These are all perfectly reasonable and prudent questions if you’re considering the classic ERP purchasing process that follows the typical capital-expenditure planning agenda. Excruciating sessions have been held to determine the requirements. Several vendors have been weighed and called in for dog-and-pony shows. It follows that because you’re spending a lot of money, you’ll also spend a lot of time making the decision.
But, what if getting the functionality you needed to handle estimates, improve CRM, run financials, and manage ops was significantly less painful, especially on the balance sheet? What if it were much more like an easily justifiable discretionary spend? This is one of the factors driving manufacturers to the Cloud.
Because Cloud software requires none of the long implementation time, on-premise hardware, or painful upgrade cycles associated with traditional ERP, small- and medium-sized manufacturers find they can get up and running without the expense, pain and opportunity costs associated with traditional enterprise technology purchases. The fact is, Cloud ERP is subscription-based and exists on the operating expense line in your discretionary budget.
Forbes.com contributor Louis Columbus detailed the competitive benefits that drive manufacturers to Cloud software models in his article, 10 Ways Cloud Computing is Revolutionizing Manufacturing. His bottom line — “Using cloud-based systems to streamline key areas of their business, manufacturers are freeing up more time to invest in new products and selling more” — also applies to the selection, budgeting and implementation process.
Affordability and streamlined implementation bring their own benefits: a smaller investment in between you and the gains you actually want; reduced frustration and time in implementation; and a price tag that doesn’t require months of wrangling among your leadership before you start seeing the benefits.
