For a long time sophisticated inventory management software solutions were too costly for most small and mid-size businesses. In addition to paying for the software license, you needed appropriate hardware to house the data and an IT staff to maintain the software and address problems. All of this adds up to high cost of ownership. Instead, many SMB companies still rely on paper processes and spreadsheets to monitor their products and supplies. With the advent of cloud computing – also called Software as a Service (SaaS) – however, reliable, sophisticated inventory management solutions are now within the reach of most SMBs.
How the Cloud is Different
At first glance it’s not obvious how the cloud would offer better, less expensive solutions than the traditional model of buying and installing your own program. However, the benefits of multi-tenancy allow SMBs to leverage the advantages of high-end solution at what amounts to a group discount rate. In the traditional model for inventory management systems, the company purchases the software and then installs it on one or more computer at their office. However, with a cloud-based model there is one instance of the software, but it can support thousands of users at the same time. A single server, for example, could handle 10,000 simultaneous web sessions. This set-up benefits the SMB in a number of ways.
The economies of scale resulting from multi-tenancy manifest themselves as cost savings in a number of ways. Since the inventory management software is “in the cloud,” SMBs don’t need to purchase and maintain costly hardware to run it. Software updates and server issues are the responsibility of the cloud provider. This also eliminates the need to have in-house expertise on the program, allowing SMBs to dedicate those IT staff costs to core business objectives. Cloud-based programs also tend to be simple to deploy and don’t require a big upfront investment. It’s easy to control and track the costs of your inventory management system since usually you pay a single fee monthly or yearly to the cloud provider.
Cloud inventory systems increase your efficiency in a number of ways. One is real-time inventory monitoring. A single change can replicate itself company-wide instantaneously. As a result, your staff can have greater confidence in the accuracy of the information in the system, and management can more easily track the flow of supplies and products – and generate reports. In addition, cloud-based solutions offer greater accessibility. You no longer need to be on the premises in order to access inventory information; now you can see it anywhere you want – even in meetings with clients. Cloud solutions are also good at supporting a wide variety of devices including tablets and smartphones.
Cloud inventory programs also allow departments within a company to work together more efficiently. Department A can pull information about Department B’s inventory directly from the software without needing to contact Department B’s staff for the information. This inter-departmental communication also makes it easier to know when to restock and which customer orders have been shipped, etc. Operations can run more smoothly and efficiently, enhancing your customer’s experience. Accurate inventory information can also have a huge impact on your company’s bottom line. It allows you to see where the bottlenecks and workflow issues are – and to calculate break-even points as well as profit margins.
The advent of cloud-based inventory management means that sophisticated inventory management techniques are now available to just about any company – along with the capacity to increase sales and improve efficiency – for a fraction of the cost of a traditional deployment. For the first time advanced capabilities are available to small and midsize businesses. The playing field with bigger competitors has been leveled a little more. Now is the time to take advantage of it.
Acumatica is a leading provider of adaptable cloud ERP applications for small and midsized businesses (SMBs). Acumatica’s browser-based cloud ERP apps (financials, distribution, CRM, and project accounting suites) are optimized for ease of use, adaptability, speed, and security. Acumatica is available globally through a channel partner network of VARs, ISVs, and OEMs. Acumatica has been named a Red Herring Top 100 Global Tech Company.