Whether restaurants have no ERP system in place or use on-premises ERP, they should consider switching to the cloud.

As the need for digitization becomes increasingly apparent, more restaurants embrace enterprise resource planning (ERP) software. These tools provide many advantages, but the sector’s reliance on on-premises ERP holds it back. Learning about cloud ERP benefits and best practices will help restaurants overcome this barrier.

What Is a Cloud ERP System?

ERP solutions combine multiple business functions and data into a single platform. Sales data, inventory management, HR tools, customer relationship management, spending reports and more all come under the same roof with ERP. That way, management can view it all together and control it from a single program.

Cloud ERP offers all those same features in a software-as-a-service (SaaS) model. Instead of hosting these programs on their own computers or data centers, restaurants access them from the cloud. As a result of that shifting ownership model, the ERP provider takes care of all updating, upkeep, data storage and security instead of the users.

Cloud-based ERP is quickly overtaking on-prem alternatives. Traditional, on-premise software accounts for more revenue today, but that will change by 2025 as cloud spending increases. By then, the cloud will account for over half of IT spending, thanks to the benefits of tools like cloud ERP.

Cloud ERP Benefits

Whether restaurants have no ERP system in place or use on-premises ERP, they should consider switching to the cloud. Here’s a glance at some of the leading cloud ERP benefits for restaurants to help understand why.

1. Improved Planning

Seeing all restaurant info in one place is one of cloud ERP’s greatest strengths. When managers can view their sales data, inventory levels and other impacting factors simultaneously, they get a complete picture of their operations. They can then make more informed decisions about the future.

Some ERP systems can generate seasonal forecasts based on historical data across these processes. Restaurant owners can then see what items to market more heavily and which to pull back on to match customers’ shifting demands. Even if establishments are releasing new products with no available data, trends from similar ones in the past can suggest optimal debut schedules.

This forecasting applies to more than just product releases, too. A fuller picture of restaurant operations can inform more effective changes in sales, new services, employee turnover and any other business process.

2. Better Communication

Another key cloud ERP benefit is the ability to share this data efficiently. When all relevant information is in one place, it’s easier to keep affected parties informed. The cloud’s remote accessibility takes this further by removing the need for inefficient communication channels like email.

If a restaurant chain needed to provide the latest sales data to shareholders, it could use cloud ERP to do so in real time. Shareholders wouldn’t have to wait on emails directing them to the correct information because they could access the cloud ERP solution themselves from their personal devices. Removing these communication steps enables much more efficient operations.

Similarly, restaurant locations could see how their other sites are performing with the click of a button. When everyone has immediate access to what they need, restaurant chains can avoid miscommunication and help every location achieve its best. These benefits also extend to supply chain partners, so even restaurants with just one site can use them.

3. Traceability

Cloud ERP’s transparency and shareability make it an ideal tool for food traceability. Consequently, restaurant managers can use it to address and prevent foodborne illnesses that hospitalize 128,000 people each year.

Because a cloud ERP pulls data from across a restaurant’s supply chain into one place, it provides complete visibility. Restaurants can easily see each ingredient shipment’s journey to their establishment and who’s responsible for each step. If something goes wrong, this transparency makes it easy to identify where the problem arose, aiding faster, more effective responses.

This traceability can also help improve consumer trust. When restaurants can verify their ingredients’ origins and logistics paths more accurately, they can offer more confidence to customers. That’s especially important for businesses centering around organic or fair-trade ingredients.

4. Error Reduction

Using a cloud ERP will also help restaurants reduce record-keeping errors. It’s easier to verify information when all relevant data is in one place and requires little switching between windows. Many ERP solutions also have automated updating features to remove the human element from data entry and record-keeping, minimizing human error.

On-premises ERP offers similar human error reduction benefits, but cloud solutions take them further. Because restaurants don’t need to manage the technical side of the software, there’s less room for software-related errors like misconfiguration or missing updates. The cloud’s accessibility also ensures everyone can access the same data, preventing miscommunication.

Fewer errors mean less lost time and money. Considering how likely mistakes are when human workers have to balance multiple data points, that cloud ERP benefit is difficult to overlook.

5. Lower Technology Costs

Cloud ERP systems can reduce restaurants’ costs by combining multiple features under one umbrella. Without an ERP platform, establishments must use separate programs for all core business functions. Paying for these individual solutions can quickly become expensive.

ERP provides a more cost-effective solution by offering everything in one package. Considering how businesses spend 18 percent of their revenue on software on average, that consolidation can offer huge savings.

Cloud ERP provides savings over on-premises ERP, too. The SaaS model means restaurants only pay for the features and capacity they use and don’t have to worry about data storage, hardware, or upkeep costs.

Cloud ERP Best Practices

These cloud ERP benefits are enticing, but restaurants must select and use these programs effectively to experience them to their fullest. That starts with understanding their specific needs.

Every ERP solution offers different integrations, interfaces, price schemes and features. Restaurants should determine what features they need, review their current software to understand what integrations they should have, and gauge their budgets and ability to use these tools. They can then make more informed decisions about which ERP provider best suits their situation.

It’s also essential to take advantage of the cloud’s scalability. Start small, paying only for minimal features and data storage, then expand as necessary as employees learn to use these tools. This slower approach will help minimize the disruption of using a new system and minimize costs.

Cloud ERP Benefits Are Hard to Ignore

The benefits of cloud ERP are too substantial for restaurants to overlook. As the industry becomes increasingly digitized, these tools are indispensable to running a competitive business.

Cloud ERP can help restaurants become more agile, cost-effective, organized, and safe. They can then surge past less tech-centric competitors and maximize their business’s potential.

Emily Newton is the Editor-in-Chief of Revolutionized Magazine. She has over five years experience writing for the food and beverage industry.

Expert Takes, Feature, Technology