Why Is Cloud ERP Revolutionizing How Distributors And Manufacturers Do Business?

Cloud ERP is revolutionizing the way distributors and manufacturers do business. An article on CIO.com takes an in-depth look at how one company has switched from on-premises ERP solutions to the cloud and why it has seen tremendous growth and profitability.

The article discusses the story of FMW Fasteners, a Houston-based distributor that had tried several different on-premises ERP applications but has recently made the switch to the cloud using NetSuite. The decision to migrate to a cloud ERP system was made because FMW constantly outgrew on-premises ERP systems and found it difficult to maintain the IT infrastructure required for such implementations.

“We felt like we were in the migration business,” says Steve Baker, sales manager at FMW. The organization needed a system that allowed the company to grow and change without massive migrations or IT infrastructure changes. Cloud ERP offered a solution that would allow growth without the migrations.

With NetSuite’s customizable and scalable cloud platform, FMW was able to make changes to the system with much greater speed than with traditional on-premises ERP systems. Aside from the simple, customizable interface, NetSuite partners can use available application programming interfaces (APIs) to develop custom cloud-based solutions. With the help of a consulting firm, according to the article, FMW was able “to bend NetSuite’s products around the fastener maker’s business processes.”

Most important for FMW was speed. “Speed for SMB-type companies is everything,” Baker says. “How quickly can I react to change? How quickly can I solve process problems? How quickly can I implement actual change that impacts my customers and ultimately my profitability?”

Cloud ERP has made this agility possible. With the help of a partner that understood FMW’s business processes, implementing and customizing NetSuite went quickly. Furthermore, NetSuite operates on a single database allowing distributors and manufacturers to manage ERP and CRM systems and e-commerce from within one application. No more data silos and patching together several disparate systems.

Manufacturers and distributors that are normally restricted to selling within a local market can now expand into nationwide and global marketplaces through the use of e-commerce. A year after implementing CRM and ERP systems, FMW ventured into the e-commerce realm. Using NetSuite’s e-commerce offering, FMW has been able to expand the scope of its business. “As an online distributor, the company [FMW] now pursues opportunities across the U.S. and international markets,” the article reports.

All too often, distributors are inhibited by expensive and inflexible on-premises ERP systems that do not match business processes or that require a great deal of effort to maintain. While traditional on-premises ERP systems can consume the valuable resources of your staff, cloud ERP is a profit center rather than a cost center.

Source: CIO.com, September 2013