Win More, Stay Ahead: ERP In The Cloud Turbocharges Growing Companies

Luis Murguia

The competitive landscape is leaning favorably towards the success of small and midsize businesses. More and more, growing companies are running frictionless transactions, supporting instantaneous ordering experiences, and engaging customers in ways that catch the rest of the marketplace by surprise.

How are they accomplishing such unprecedented success? Well, for one, they are not making decisions and taking action based on outdated tactics such as spreadsheets and siloed data.

When small and midsize businesses outgrow their traditional strategies

In an IDC Analyst Connection interview, IDC’s Ray Boggs, vice president of Small and Midsize Business Research, and Mickey North Rizza, vice president of ERP and Digital Commerce Research, stated, “Managing via spreadsheet and basic accounting becomes inadequate and harder to sustain as the organization expands and becomes more complex. As businesses expand operations and locations, a growing number of employees will need transparency, visibility, and real-time information on a range of performance dimensions.”

The more business owners and leaders I meet, the more I know that Boggs and North Rizza couldn’t be more right. On par with their larger rivals, they are investing heavily in the cloud to ramp up a foundation for emerging technology opportunities while keeping up with the constant changes of the entire marketplace. And in nearly every case, implementing an enterprise resource planning (ERP) system at the core of their cloud-driven platform is part of the plan.

Considering the nature of small and midsize businesses, it becomes clear why my acquaintances are placing their bets on running their ERP software in the cloud. Money is tight and patience is short when it comes to any new digital investment. Everyone in the company wants to know that the benefits of an application will outweigh its costs without having to wait months to realize them.

ERP in the cloud: The true engine for moving forward in our digital economy now

In the past, legacy on-premises ERP systems were too expensive to buy, difficult to implement, and slow to deliver ROI. But all of that is changing with growing preference for the cloud. Now, small and midsize businesses can build up their resources incrementally while getting the flexibility they need to apply innovative solutions at their own pace and as needs arise. And more importantly, all of this can be accomplished within a reasonable cost.

Combining the cloud with ERP takes business performance and the customer experience to the next level – before the rest of the competition does. One of the most significant near-term benefits that a cloud ERP system provides is a single view of what’s happening within the company and in external market dynamics at any given time to enable advantages, such as:

1. Manage and streamline financial operations

An ERP system running in the cloud can be used to accelerate many tasks and improve visibility into financial health. Common accounting responsibilities (such as ledger and journal entries, tax calculations, and multicurrency transactions) and banking activities (including bank statement and payment processing and account reconciliation) can be automated. Plus, procurement activities can be managed systematically – from requesting vendor quotes to creating purchase orders and paying invoices.

In return, the finance function can strategically and proactively manage cash flow, track budgets, and compare actuals versus plans in real time. By providing integrated tools and connecting applications into a unified network, an ERP system running in the cloud allows finance to identify potential cost savings, lower outstanding payables and receivables, compare suppliers to prices to negotiate better deals, and free employees from low-value work

2. Grow a loyal customer base

Acquiring new customers and maintaining existing ones are always critical hallmarks of success, especially for small and midsize businesses. With ERP, companies can efficiently manage the entire buying experience and customer lifecycle – from awareness to aftermarket service. A complete view of prospects and customers helps decision-makers better understand and meet market demand with new business models and innovative processes.

Take, for example, the supply chain. With an accurate view into inbound and outbound shipments, inventory, and item location, businesses can value inventory by applying standard costing, moving average, first in and first out, and other methods. Plus, they can monitor stock levels and track transfers in real time while running inventory updates and availability checks to know when to apply standard, discount, and special pricing.

3. Empower employees to make intelligent decisions on the fly

Every employee wants to make smart, confident decisions faster, but this reality is achievable only when critical, real-time information across sales, customer service, operations, and finance is available from one source. This is where an ERP system is incredibly helpful.

By moving away from multiple disconnected spreadsheets and applications to adopt one company-wide system, duplicate data entry and related costs and errors are eliminated. Workflow-based alerts trigger automated responses when specific events occur. And access to predefined dashboards and reports that are updated to reflect the current situation and tailored to meet particular requirements support the clear visibility every employee needs to make decisions confidently and in the moment.

A clear path to value creation and growth

There are many ways for small and midsize businesses to create new value streams and bolster revenue and profitability. But these capabilities are possible only when there are complete insights, collaborative communication, and interlinked processes enabled by ERP system running in the cloud. By pulling together information residing in different applications and locations into one platform, business leaders can get the control they need to help deliver visionary business processes and accomplish strategic goals.

Find out the answers to five common questions that small and midsize companies ask about ERP systems. Read the IDC Analyst Connection brief, “Small and Midsize Businesses Put ERP at the Center of Digital Transformation Strategies,” featuring IDC’s Ray Boggs, vice president of Small and Midsize Business Research, and Mickey North Rizza, vice president of ERP and Digital Commerce Research.


Luis Murguia

About Luis Murguia

Luis Murguia is the Senior Vice President for Global Customer and Partner Operations: Business One and Business ByDesgin. With Small and Mid-sized Businesses (SMB) and entrepreneurship on the rise, he is tasked with driving growth and adoption of SAP’s ERP offering for the SMB: Business One and Business ByDesign. He is leveraging a combination of established Value-Added Reseller, Software Solution Partners, and new routes to market like OEM Partners or Private Managed Cloud Partners, to accelerate the success of Business One and Business ByDesign. He also works closely with the SAP Development organization ensuring that the SAP SMB ERP solution portfolio leads the transformation of SMBs into the Digital Economy, through the impact of Natural Language, Machine Learning, Social, Mobile, In Memory Computing, and Cloud technologies.