The time is now. The shift to the cloud in the Enterprise Resource Planning (ERP) Market is well underway.
This transformation is bringing unfair competitive advantages. Per Gartner, cloud-first strategies are the foundation for staying competitive in a fast-paced world. Cloud-first strategies spell, of course, enormous implications for Business-to-Business (B2B) sales.
Cloud is growing steadily, including in the ERP market. For example, cloud subscriptions and support represented 14 % of SAP’s total revenue for the third quarter of 2016 (vs 12 % in 2015); 11 % for Oracle (September 2016). In total, it is estimated that from a global $ 144 billion Application Software SaaS market, 37 % are already cloud-based.
There is an underlying change in technology, migrating to the cloud, effectively enabling sales reporting and data visualisation based on ERP data. This information has long been unused, especially in Small and Medium organisations. The siesta is over, and cloud ERPs are to blame.
The ERP technological shift has consequences for B2B sales. The sales job has been transformed in the last ten years with the advent of cloud Customer Relationship Management (CRM) solutions. This arrival quickly created winners and losers. Now the ERP Market is about to experience a similar disruption.
Why a cloud-based ERP?
Web-based applications offer several advantages, not only for B2B sales. Reduced cost, on-demand infrastructure and the opportunities open by a mobile sales strategy, are among the main benefits of a cloud-based ERP. Several cost drivers weight in the implementation of an ERP. Two of them strongly influence the total cost of ownership. First, an ERP system is rented. The licencing costs are a fraction of an up-front on-premises implementation. Second, the capital maintenance costs of the infrastructure itself should be considered. These now fall onto the ERP provider and not the end user.
Besides the infrastructure costs, cloud-based ERP tends to support a mobile strategy better. Mobile first is a critical enabler for B2B sales, allowing, for example, the access to sales data from a smartphone. Prices and stocks can be discussed directly in front of the customers, accelerating so the sales process and reducing travel costs. Anything that gives more information to B2B sales puts them in an advantageous position, especially under competitive pressure.
Cloud ERP? With an API, by definition.
Effective cloud ERP solutions are not just another system that can be accessed from a browser. Per definition, they are designed and built to serve a constant remote access. This purpose usually means ERP cloud solutions have different backend and frontend structures. For these architectures to communicate smoothly with one another, cloud ERP typically relies on well-thought Applications Program Interfaces (API) between front and backend.
Cloud ERP brings a massive advantage to B2B sales.
The API itself provides additional value to the user of a cloud ERP system. First, the API can be used to access the ERP data from external applications. For example, it can be used to connect the system with sales controlling add-ons, data visualisations tools, or predictive sales analytics tools. Second, a well-thought architecture defines the underlying data structure of the scheme. This, in turn, can support an automatic ERP data-mining process. It can go up to artificial intelligence or machine learning algorithms (ERP + AI).
Cloud ERP brings a massive advantage to B2B sales
The cloud disruption in the ERP market is bringing unfair competitive advantages. Companies leveraging the cloud can provide infrastructure and technology to quickly find sales insights, redeploy sales and marketing resources and profit from value-added solutions.
For example, thanks to powerful enabling data analysis technologies in cloud, advanced sales analytics can be rolled out in a couple of hours.
Being faster than your competitors to implement business applications brings a competitive advantage to any organisation. ERP cloud reduces implementation time by around 40 to 60 %. Saving in the implementation of an ERP system can be redirected to sales and marketing. Furthermore, the additional benefits of a mobile strategy and data mining capabilities strength a company position.
Not in vain cloud adoption is almost double among big enterprises. 70 % of them are already using a cloud solution (not only ERP), whereas among small SME only 37 %. The faster adoption of cloud solutions also permeates to sales and sales controlling.
The Shift to Cloud first in the ERP Market is changing B2B sales – Summary
Cloud ERP systems are uninterruptedly replacing the implementation of traditional ERP systems within the enterprise industry. This transformation is due to the cost benefits and the reduced time they take to be rolled out. Furthermore, due to their web-based architecture, most of them come with great APIs, which in turn support connection to external systems, data mining and artificial intelligence.
The benefits for B2B sales are not hard to see. First, faster and cheaper implementation means more resources for sales and marketing. It also means more rapid time-to-market for mobile sales strategies.
Moreover, the integrated API architecture of a cloud ERP brings further advantages. Sales can profit from this by enabling external applications, for example in data visualisation, sales controlling and planning.
Cloud ERP: how soon is now?
Sources:
isi Medien GmbH – Is the time for cloud ERP ripe? (in German)