7 Reasons Filipino Businesses are Investing In a Cloud-based ERPs

While both cloud-based and on-premise ERP systems have their advantages, cloud ERPs are now the more popular option among local startups and even larger established businesses. Here’s why cloud-based solutions such as SAP Business One on Cloud are now preferred over their on-premise counterparts.

1. Lower capital requirements

On-premise ERPs will require dedicated equipment and the people to maintain them. This represents capital expenses for hardware, sourcing, installation, personnel training, system testing, and onboarding among others. These costs can also vary wildly depending on the size and needs of the organization.

By contrast, cloud-based ERPs have a much lower capital investment. The ERP provider already takes care of most of the hardware and development expenses. All the business has to do after paying for the use of the ERP is to invest in training and onboarding employees to the system. This alone makes cloud-based systems very attractive to businesses with a limited capitalization.

2. Lower running costs

Not only do on-premise ERPs cost more upfront, but they also cost more to maintain. Hardware costs money to run and maintain. They should also be maintained by support personnel with special training if they’re to be used to their full potential. To add to this, keeping up with the recommended maintenance procedures isn’t always easy for many smaller businesses, potentially compounding the cost of use and maintenance down the line. 

The hardware and back-end systems of Cloud-based ERPs, on the other hand, are maintained by the ERP provider. They typically do this for a large number of customers, which dramatically reduces the required maintenance cost to the end-user due to the economies of scale. The lower maintenance costs of cloud-based systems is often a major deciding factor, even for businesses that can comfortably afford the cost of an on-site ERP.

3. Multiple redundancies for data

Data on cloud-based ERPs is backed up on multiple servers, and the back-up schedule is typically more frequent than is typical of an on-site system. Servers also tend to be located in different geographical areas, rather than in just one site, which further mitigates the chance of data destruction from natural or man-made catastrophes. This means that data loss is much less of an issue on cloud-based ERPs.

4. Regularly-updated security 

ERP providers will regularly update security on cloud-based systems as part of regular maintenance. Regular updates are not always possible in the context of on-site systems, making them more and more vulnerable to cyberattacks over time. 

The experience of updating security also tends to be much smoother and straightforward for cloud-based systems, given that the ERP providers specialize in their own systems. By contrast, updating security on on-site systems can be trickier given that most internal system administrators and IT personnel are not always highly-knowledgable in the ERP they use.

5. Better scalability

As it grows, an organization with an onsite ERP will have to expand its investment in related equipment and personnel. This is unnecessary with a cloud-based system beyond simply upgrading to a package that offers more features and storage. This makes cloud-based systems the preferred solution for businesses that are thinking of their long-term growth or are considering expanding to different markets.

6. Better suited for contemporary mobile computing solutions

The expansion of wireless infrastructure and the widespread use of mobile devices in the Philippines means that businesses no longer need to be tied down to any physical building or geographic location. Anyone anywhere can enjoy the benefits of having an ERP.  All one needs is a laptop or smartphone and the right credentials can access the system.

Cloud-based ERPs have proven themselves much more flexible in this “new normal” of mobile computing. Cloud-based systems can be accessed by employees working in the field as well as those working from home, allowing them instant access to reports and data. This, in turn, makes organizations more resilient to unexpected changes, such as what occurred during the 2020 pandemic.

7. More uptime

Cloud ERPs will tend to have much less downtime compared to their on-site equivalents. This is due to the specialization of the ERP providers, systems redundancy, and the existence of service level agreements in some cases. This means that downtime is kept to a minimum or eliminated — something that is not easy to guarantee in on-site systems.

Conclusion

Every business is different, and there is no doubt that there are still a few that would benefit from an on-site system. But for the vast majority of use cases, cloud-based ERPs make the most sense, especially among Filipino businesses. The lower costs, better flexibility, data redundancy, reduced downtime, and overall convenience all make a very compelling case for local businesses, regardless of their size.