Surviving digital Darwinism by levelling up to a cloud ERP

When it comes to sustainable business, it's not the strongest that thrive but those most adaptable to change. This concept, known as digital Darwinism, describes the accelerating pace at which technology and consumer behaviour evolve, leaving behind businesses that fail to adapt. 

One way this adaptation plays out is when growing businesses hits a technology roadblock. It's natural for businesses to start out using smaller accounting systems like MYOB or Xero. They don't need all the bells and whistles of larger finance and accounting solutions yet. They can make do with these simpler systems. After all, it's easy just add on capabilities or use separate systems as their needs evolve.

But eventually, businesses grow and so too do their operational complexities. At some point, the limitations of these smaller systems become apparent. Data is siloed across systems and apps, users are making complex workarounds to perform basic functions, and the lack of integration has created avoidable inefficiencies and errors. Things start to break, slow down, and much like a frog in a slowly heating pot, the impact can be gradual yet devastating on productivity, efficiency and business growth.

At this point, businesses are faced with a decision. Continue on and try to make things work, or take the natural next step and adopt a cloud-based Enterprise Resource Planning (ERP) system.

If this sounds a little familiar, then read on as we spotlight the all-too-common signs that it might be time to level up to cloud ERP.  

But first, a little rundown of cloud ERP:

Cloud enterprise resource planning (ERP) is a web-accessible software that allows businesses to manage and integrate the important parts of their operations. Core features often include comprehensive financial management, supply chain management, human resources management, and integrated CRM functionality. They also support project management, manufacturing operations, eCommerce, business intelligence, analytics, and compliance and risk management, providing tools for real-time insights, regulatory adherence, and efficient operations.

So, how does cloud ERP assist businesses with their stages of growth?

Scalability and flexibility
Scalability is a major advantage of cloud ERP systems. As businesses grow, their operational complexities increase, necessitating systems that can scale accordingly. Smaller accounting systems are made for smaller businesses so often have limits on the number of users they can support, the volume of transactions they can process, and the range of functionalities they offer.

Cloud ERP systems, in contrast, are designed to handle increased workloads and more complex processes without compromising performance, providing the flexibility to add new users, modules, and functionalities as needed.

Feature sets and integration
The capabilities of cloud ERPs far surpass those of traditional accounting systems. While smaller accounting systems are primarily focused on financial management, cloud ERP solutions offer a holistic approach, integrating various business functions such as supply chain management, human resources, customer relationship management, and more.

This allows for better data integration and visibility across the organisation, even for multiple entities and geographies. Cloud ERPs are highly extensible, too. You can integrate them with endless third-party systems and share the data most important to you. This means you can always take your preferred software systems with you.

Industry suitability
Different industries have unique requirements that generic accounting systems often fail to address. Cloud ERP solutions are tailored to meet specific industry needs, offering specialised modules and functionalities that cater to diverse sectors such as manufacturing, retail, healthcare, and finance.

For example, a manufacturing company might require robust inventory management and production planning capabilities, which are typically beyond the scope of smaller accounting systems. They also offer industry-specific tools for streamlining operations, improving compliance, and support for best practices.

Cost considerations
When evaluating the cost of cloud ERP versus smaller accounting systems, you need to weigh up direct and indirect expenses. Smaller accounting systems often appeal to small businesses due to their lower upfront costs. However, these systems can incur significant long-term expenses, such as maintenance, upgrades, and limited integration capabilities.

Not to mention the less measurable costs on productivity and stymied growth.

Cloud ERP solutions, while more expensive initially, offer a comprehensive package that includes ongoing updates, security, and support. Additionally, the subscription-based model of cloud ERP allows for predictable budgeting and reduces the need for significant capital investment in IT infrastructure. Plus, you can reduce your reliance on multiple third-party systems, further driving down costs.

Making the switch to cloud ERP
Transitioning to a cloud ERP system is a strategic decision that requires careful consideration and planning, including conducting a thorough needs assessment, choosing the right vendor, and ensuring a smooth implementation process.

If you're finding your existing accounting systems can no longer keep up with the daily demands of business, it might be time to start investigating your options. 

Why do so many Xero customers make a beeline for NetSuite when they outgrow Xero?  
The answer is simple - they turn to NetSuite for its comprehensive functionality and scalability features that are so important as their operations expand beyond what Xero can support. 

Catch the full on demand session of our recent webinar What's next after Xero? to learn how NetSuite outperforms Xero when it comes to handling advanced business needs.