06 May Why Wholesale Distributors Should Move to a SaaS ERP Now
It’s not uncommon for a company to put off the decision to upgrade to a new IT system, especially one that impacts the entire business such as an ERP system. After all, it takes time, commitment and money to implement a new solution. But sometimes, the cost of waiting will create a real impact on the business and delaying too long can mean a company misses out on benefits and positive returns.
For wholesale distributors, the missed costs can be greater. They may already be spending more on unnecessarily high levels of stock, and they may be seeing costs spiral from operational inefficiencies. For larger companies, these two factors alone could be costing more than it would be to upgrade their outdated and inefficient system.
As time goes on, these costs will mount up. Organisations can take months, sometimes years, to decide to change their systems. During that time, they can be missing out on new opportunities to make money, and could be stifling their growth.
A company that implements a SaaS (Software as a Service) system, such as NetSuite, benefits from not having to pay large upfront capital costs for software and servers. Nor do they have to employ additional staff to run, maintain and update those IT servers and systems.
Reducing upfront cash outlay shortens the time at which the return on investment is realised, bringing the break-even point forwards. SaaS solutions can cost three to four times less in the first year than some systems.
Studies have also shown that implementing a true cloud ERP system such as NetSuite can be achieved in 60% of the time it takes to put other ERP systems in place. This too reduces costs.
According to one study*, the typical improvements for wholesale distributors that implemented NetSuite were:
- 2-10% improvement in revenue
- 1-5% improvement in gross margin
- 5-20% improvement in days sales outstanding
- 30-50% improvement in accounting staff productivity
- 20-40% improvement in obsolete stock
- 50-75% improvement in IT support resource costs
With figures like that, there is a compelling argument to not only move to a SaaS-based ERP system, but to make the decision to move as early as possible.
If you have decided that you can no longer afford to delay that decision, we can show you how NetSuite can help your business. Please call us for more information on 020 8819 9071 or contact us using the website form.
* “Research Study: Cloud-Based Business Solutions Suite Delivers Key Performance Improvements to Wholesale Distribution Companies”, SL Associates, 2014
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