Posted March 26, 2024

Why cloud migration is imperative for manufacturers & distributors in 2024

By Will Quinn

In the changing business landscape of 2024, top-level executives at manufacturing and distribution companies face decisions regarding their ERP & WMS systems. One crucial step that emerges is the transition to cloud-based solutions, which offer advancements and a competitive edge in the market. Let's explore why embracing and adopting a cloud migration strategy is essential for manufacturers and distributors navigating the digital era.

Adapting to the Post-COVID Era: A Catalyst for Transformation

Looking back at the transformative COVID era, those who migrated to the cloud gained a significant advantage. The adaptability and remote accessibility provided by cloud-based tools proved invaluable. Matt Twomey from Electrical Terminal Services emphasizes how crucial it was to access systems like ERP and CRM with internet connectivity, ensuring business continuity.

Enhanced Security Measures and Disaster Recovery

The increasing frequency and sophistication of cyber threats highlight the importance of security measures. Ransomware attacks are on the rise, emphasizing the need for defenses. By migrating to the cloud, companies can benefit from security investments made by hosting providers like AWS. This fortified digital security infrastructure significantly reduces data breaches and cyber-attack risks. Furthermore, cloud-based solutions come with built-in disaster recovery capabilities that ensure recovery and limited downtime in the face of disruptions or disasters.

Cloud-based systems offer scalability, allowing businesses to align resources with their needs. Unlike on-premises solutions, cloud models only require payment for the services that are actually used. This streamlined approach helps optimize costs. Reduces the burden of hardware procurement and maintenance. Companies can save more than 30% on the cost of ownership, allowing them to redirect resources toward innovation and customer-focused initiatives. Additionally, cloud computing contributes to sustainability by reducing energy consumption and carbon footprint compared to on-premises data centers.

During a recent conversation with Dan Schuberth, chief revenue officer with the National Association of Wholesale Distributors (NAW), I asked Dan, “More and more distributors are moving their ERP to the cloud and realizing the benefits. Is there anything you would say to distributors considering a move to the cloud but haven’t made that decision yet?”

Dan responded, “With digitization advancing rapidly across our industry, distributors who currently employ on on-premise, legacy ERP systems face significant business risks. These systems lack the agility and adaptability needed to harness, process, and weaponize the volume and complexity of information required to run a modern, innovative enterprise. If your strategic plan includes investments in artificial intelligence, process automation, or eCommerce, employing a nimble, cloud-based ERP platform is table stakes today.”

By embracing a cloud-based system that combines ERP (Enterprise Resource Planning) and WMS (Warehouse Management System), manufacturers and distributors can take advantage of the versions and advanced features without the disruptions commonly associated with system upgrades. This technology enables sales representatives to have access to data and inventory levels thereby enhancing their ability to deliver customer service.

Having real-time access to inventory levels and customer-specific pricing does not only improve efficiency. It also greatly enhances customer satisfaction. Moreover, these cloud solutions promote collaboration and operations across locations, fostering a globally connected workforce. This is particularly advantageous for operations as it allows for integration and coordination of processes across geographical areas.

In summary, implementing a cloud-based multi-tenant ERP & WMS system offers numerous benefits for operations, including increased efficiency, improved customer satisfaction, and the development of a globally connected workforce.

Will Quinn

Will Quinn is director of distribution industry solution and strategy at Infor.