How Sustainable is your ERP System?

How Sustainable is your ERP System?

Sustainability is no longer solely driven by regulations and PR opportunities. It is now also seen as a strategic driver for competitive advantage and innovation. Companies that identify sustainability as a key differentiating factor have begun to innovate their business processes and revolutionize their end-products and services. From the insurance industry, where assessing risk from climate change has emerged as a competitive advantage, to the transportation industry, where ride-sharing companies have introduced new features such as carpooling, sustainability is driving business innovations across all industries.

As you manage sustainability initiatives at your company, you should not forget to examine how sustainable your IT environment is. A company’s sustainability strategy needs to account for not only business processes but the core system(s) that support the business processes. An enterprise resource planning (ERP) system that is outdated, fragmented and lacks real-time information can increase  expenses and pose detrimental effects to the environment.

Replacing an outdated ERP system with a SaaS-based solution can help reduce costs and drive a company’s sustainability initiative. For convenience and functionality benefits, many businesses have chosen cloud deployment for the ERP system rather than hosting it on-premise. What is often overlooked, are the sustainability benefits provided by SaaS-based ERP systems. Below are a few key sustainability benefits that can be realized when an outdated, on-premise ERP system is switched to a SaaS-based ERP system.

  1. Decrease hardware needs
    • When an ERP system is SaaS-based, IT hardware needs are significantly reduced. An on-premise solution requires multiple servers, advanced cooling systems, intricate security systems and other types of infrastructure. With a SaaS-based solution, the providers will maintain and support all applications, servers and data centers.
  1. Reduce power usage
    • Hosting ERP system on-premise has a significant impact to a company’s electricity usage. From server energy consumption to the cooling system for the data center, hosting an ERP system has an impact on company financials along with the environment. SaaS-based solutions are traditionally founded on “multi-tenant” server utilization. A multi-tenant architecture supports one instance of a software application while serving multiple customers. This method of hosting applications and data is more energy efficient and reduces the overall impact on the environment while reducing electricity expenses.
  1. Reduce printing waste
    • Often outdated ERP systems rely on manual processes that include paper waste. Transitioning outdated ERP systems to one that is in the cloud can streamline and automate many paper-based processes. For example, onboarding paperwork, including W-2s and benefits enrollment, can be trigged through electronic workflows and filled completely online.

Whether sustainability is brought into your company’s forefront by regulation or innovation, consider the impact your ERP system has on the environment.  By capturing these benefits and monetizing them, you can make a business case to your executives on why an outdated ERP system should be replaced by a SaaS-based solution.

If you have any questions about this blog, ERP systems or sustainability related-topics, I can be reached at clim@westmonroepartners.com

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Phone: 312-602-4000
Email: marketing@westmonroepartners.com
222 W. Adams
Chicago, IL 60606
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