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Cloud ERP and IT: Does It Truly Reduce Your Need for IT Staff?

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Written by Laura Schomaker

August 20, 2021

As a holistic solution, Cloud ERP ticks a lot of boxes, not the least of which is its role as a financial management tool. While cloud ERP attracts many based on what it can do in the back office, for some companies, a big advantage of ERP comes in the transformation it brings to IT. IT department staffing and costs have skyrocketed over the last few decades, and many companies feel the pinch with these skilled workers. Can one advantage of cloud ERP and IT truly be reducing staff? 

In short—yes. Reducing IT infrastructure and maintenance through ERP can lead to a reduction in IT staff. It is more complex than that, however. Cloud ERP can reduce the need for IT staff, but more importantly, it can free your staff of burdensome tasks so that they can focus on work with greater ROI.First, let’s look at some numbers that illustrate the relationship between cloud ERP and IT. 


Cloud ERP and IT Costs 

Surprisingly, smaller businesses spend a higher percentage of revenue on IT than larger ones. 

Small business with less than $50 million in revenue spend on average 6.9% of revenue on IT. For mid-sized businesses pulling in revenue between $50 million—$2 billion, IT spend comes in at 4.1% of revenue. Finally, enterprise-scale businesses spend a mere 3.2% of revenue on IT. 

Historically, one reason for this was because of the significant upfront cap expenditure inherent in many IT solutions. Extensive maintenance work has historically burdened IT. Modern solutions, such as ERP, have improved both pain points. Is there still room for savings, however, in terms of staffing? 


ERP as IT Transformation 

Of course, for some companies, the goal might not be reducing staff, but reallocating resources. A more valuable way to consider the impact of cloud ERP on IT staff may be to consider its impact on the quality of work done in IT. Cloud ERP as an IT solution can free up a lot of time for your IT staff by taking infrastructure off site and reducing work hours dedicated to infrastructure maintenance. Your IT team can then focus on what they do best—innovating. Introducing cloud ERP to your company allows IT to pivot, focusing on the technologies and innovations your company needs to get ahead.  


Staffing Reductions Company-Wide 

An even more likely scenario is that implementing cloud ERP can make room for staffing reductions in other departments, as well. ERP tends to eliminate the need for admin positions before more skilled ones. Full-time admin positions might switch to part-time or temp status based on seasonal demand. In this way, some companies may enjoy cost savings in staffing across departments.  

Perhaps the true benefit in cloud ERP, however, is in how it can transform how everyone works in your company. ERP is there to transform the ‘how’ in work, not the ‘what.’ Rather than reduce staff in any department, you can leverage IT to reposition staff, streamline workflows, and develop a new environment in which each task results in serious ROI.  

How have you seen cloud ERP impact either staffing or the work done at your company? Tell us about it in the comments below. Interested in implementing cloud ERP? Visit this page to explore cloud ERPs that can reduce your staffing costs and increase efficiency and productivity.  

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