Myths and misconceptions about cloud ERP debunked

Adopting a cloud ERP solution is a necessary step in any modern organisations growth journey. They offer the flexibility, scalability, and efficiency that smaller accounting systems just can't. Extensibility, integration, and real-time data access give their adopters the ability to streamline processes, gain real-time business insights, and make data-driven decisions to support growth. Businesses can tinker and tailor with the architecture, shaping it perfectly to their own processes and workflows, then build it out as business needs evolve. 
But despite cloud ERPs unwavering support for business growth and efficiency, many businesses continue to struggle with fragmented processes, multiple siloed systems and system limitations that prevent full operational harmony.

As business system and integration specialists, the obvious answer is to prioritise the transition to a unified cloud ERP system that consolidates all functions into a single, cohesive platform. Yet many hesitate to take this step. One of the reasons is a lack of understanding around cloud ERPs application, cost, security and industry limitations. So, today, we're tackling some of the major misconceptions preventing businesses from taking the next leap forward in their systems maturity.

Myth: Cloud ERP is too expensive
While the initial cost of implementing a cloud ERP system can seem high, the total cost of ownership (TCO) is an important consideration. For starters, unlike traditional on-premises systems, cloud ERP eliminates the need for significant upfront investments in hardware and infrastructure. Take NetSuite cloud ERP as an example; the subscription cost includes regular updates and maintenance, which will add up to a stack of long-term savings. In fact, a study by Nucleus Research found that cloud deployments deliver 4x the ROI compared to on-premises systems​. 

If you're migrating from a smaller accounting system like Xero, then you likely have a bunch of other systems orbiting your business - marketing and sales platforms, inventory management tools, customer relationship management (CRM) systems, and more, depending on your industry. This not only creates data siloes scattering business information across different applications, it also means you are paying for multiple subscriptions. Cloud ERP's range of native capabilities can often take on the tasks of these disparate systems, reducing the need for multiple standalone applications and all associated costs. 

It's also worth noting that these cost considerations don't account for the long-term productivity and efficiency gains brought through process optimisation and automation either, which may include: 

• Reduction in manual data entry errors
• Time savings from automated workflows
• Improved inventory turnover rates
• Enhanced customer satisfaction scores
• Faster financial close processes

Myth: Cloud ERP is too unreliable
While no system can guarantee 100% uptime, cloud ERP solutions are designed to maximise reliability and minimise disruption through extensive redundancy, advanced recovery strategies, and strong operational support. Cloud ERP vendors use extensive global data centre networks, allowing for data distribution and failover mechanisms to ensure continuity if one data centre fails.

Achieving a similar level of redundancy and availability with an in-house setup or dedicated hosting is possible but often prohibitively expensive. It would require significant investments in additional hardware, software, and human resources to manage and maintain the systems. Costs that would balloon rapidly as a business scales.

Myth: Cloud ERP is too complex for smaller businesses
The great advantage of cloud ERP systems lies in their scalability and adaptability, catering to businesses beyond the start-up phase and those experiencing rapid growth. Cloud ERP systems are rarely outgrown due to their modular nature, allowing businesses to selectively add functionalities such as advanced financials, inventory management, and customer relationship management as needed without overhauling their entire system.

For smaller businesses looking to transition from basic accounting software or have plans to scale operations, Cloud ERP offers a clear upgrade path. For example, NetSuite offers SuiteSuccess, a rapid deployment model that allows businesses to start with core functionalities and build out the solutions alongside business growth. Deployment models like this reduce implementation complexity and offer a clear pathway forward so businesses can take advantage of advanced functionalities typically reserved for larger enterprises, ensuring a level playing field in terms of technological capabilities.

Myth: Cloud ERP is not secure
This idea has been around since the early days of cloud computing. And still some will tell you the cloud is not safe and cannot be trusted. However, leading cloud ERP vendors are acutely aware of the importance of system security, knowing that their reputation and business viability depend on providing the most fortified defence systems available. Cloud ERP providers implement robust security measures that often surpass those of on-premises systems and employ dedicated security teams and resources that many businesses couldn't afford in-house. 

While any system is vulnerable to threats, it shouldn't prevent businesses from adopting cloud ERP. Instead, businesses should focus on the security advantages cloud ERP systems offer:

• Encryption in transit and at rest
• Regular security audits and compliance with standards like GDPR and ISO/IEC 27001 
• Specialised security teams dedicated to monitoring and responding to potential threats in real-time
• Continuous updates and patching to address any vulnerabilities and improve security features
• Multi-Factor Authentication (MFA)

Myth: Cloud ERP is only for tech-savvy companies
Cloud ERP systems are user-friendly and intuitive by design. Vendors and implementation partners typically offer comprehensive training and support to help all users, regardless of their technical background, to get the most out of the system. Companies across various industries, including those not traditionally tech-savvy, have successfully adopted cloud ERP solutions​. 

Myth: Cloud ERP doesn't support our industry-specific needs
Many cloud ERP providers offer industry-specific solutions that address the unique needs of different sectors. These tailored solutions come with pre-configured modules and best practices that align with industry standards. For example, NetSuite provides specialised ERP solutions for industries such as retail, manufacturing, and tech, ensuring that specific industry requirements are met​. 

Cloud ERP systems offer numerous advantages, including cost savings, scalability and enhanced security. In fact, they are the gold standard for any business looking to position themselves to thrive in a highly digitised and competitive market.

Thinking of levelling up with a cloud ERP?
If you're weighing up the pros and cons of a cloud ERP solution like NetSuite, you will want the best partner at your side. Read our complete guide to selecting a NetSuite implementation partner to find your perfect fit.