How Cloud ERP Can Increase Margins for Service Companies
Cloud ERP enables your organization to increase margins, efficiencies, allocate resources, and respond to events that impact your business.
Is it time to modernize your ERP and move to the cloud? If you’re a professional services company, the answer is that if you haven’t already, you should be now. The volatility of the market in the last few years has been unsettling, but moving to cloud ERP can help your firm become more resilient and increase margins.
There are many, many reasons to implement cloud ERP, and some of those reasons are closely related to profitability. With the right data in the right format, you can increase efficiencies, appropriately allocate resources, and respond quickly to events that impact your business. In this post, we examine some of the ways that cloud ERP can increase margins.
1. Reporting
Data is only helpful if it comes to you in a useful format, like a report. Pages of raw data are essentially useless without some relatively simple and fast means of interpreting it. With cloud ERP, you have access to the raw data, but you also get clear, easy-to-understand reports about what’s happening in your company.
You can see what your projected budget is and compare it to actual spend, for example. You can look at financial reports broken down by department, business segment, geographical location, or time period, among others.
Sometimes, the challenge isn’t a lack of data, it’s a matter of knowing which data is most important. With cloud ERP, it’s more apparent because you have tools like dashboards and analytics to clarify what the data you have actually means.
2. Automation
One of the greatest benefits of cloud computing in every sector is the availability of resources like hardware. You pay for what you use, and that means far less capital investment and greater computing power—which can be used to automate processes.
Automation of routine processes means that your staff can turn their attention to more important and valuable activities, like providing better and more personalized customer service. And, while automation increases productivity, it also decreases errors compared to manual processing.
Having standardized and automated processes across your company provides a level of transparency that is helpful for several reasons. Aligning day-to-day activities and procedures with KPIs, making it easier for departments and segments to communicate and work together are examples. Standardization and automation also make it much easier to scale.
3. Scalability
Adding a new line of business or expanding into a new geographic area can be a risk, but the benefits of cloud ERP decrease that risk. When you have cloud ERP, you aren’t constrained by needing to invest heavily in technology. You can scale and keep the same system so that regardless of location, your company is connected by a common ERP. The standardization and single source of truth inherent in cloud ERP makes scaling a far simpler proposition.
4. Informed decision-making
In business, making informed decisions reduces risk. Having a clear understanding of what’s happening in each segment of your business allows you to allocate resources more efficiently. More efficient use of the resource’s available increases margins and increases your company’s resiliency in the face of unpredictable circumstances.
All around improvement
Each of the four areas of improvement listed in this post are useful on their own, but combined the results can be astounding. Efficiencies, productivity, and transparency into your business are each a path towards greater profitability. Having more ways to increase margins creates business resiliency and, in the face of uncertain times, resiliency is a core requirement.
If you’d like to find out more about the ways cloud ERP can increase margins in your professional services company, we’re happy to provide a consultation to discuss your specific needs.
