5 ways ERP can minimise the massive cost of power outages

Load shedding in South Africa

Thus far, 2022 has been South Africa’s most intensive load-shedding year to date, as Eskom’s coal fleet continues to deteriorate. According to the CSIR, Eskom had cut 2,276GWh of electricity in the first six months of 2022. That was more than 90% of the 2,521GWh it shed for the entire 2021.

The CSIR estimates that load shedding results in lost economic output of about R700-million per load shedding stage per day. In 2019 alone, the CSIR estimated that load shedding cost the economy between R60-billion and R120-billion.

Economists from Alexander Forbes have indicated that Stage 6 load shedding costs South Africa over R4 billion each day, with productivity affected by lost data, failing internet connections, missed deadlines as employees aren’t able to complete tasks on time, and disruptions to supply chains from the reduced manufacturing output.

Andre Adendorff, Director of Presales at Seidor Africa, says businesses can minimise the impact of load-shedding through cloud-based ERP solutions as these provide security, availability, and business continuity compliance.

Cloud ERP is accessible over the Internet and provides advanced functionalities for all the core processes in an organisation. Instead of onsite servers and other hardware, Cloud ERP enables users to access data and other computing services through the cloud.

World class technology solutions in line with a company’s budget is enabled through cloud-based ERP. Hosted on a cloud provider’s cloud computing platform, cloud ERP is typically delivered “as a service”, with customers paying a predictable monthly or annual subscription fee and without any significant capital investment.

In addition to cost-savings, management can focus on running their business, and scale up or down as customer or industry needs change. There are no upfront hardware costs and application maintenance, upgrades and innovations, data storage, and security are all managed by the vendor.

“All ERP data is hosted on the cloud provider’s servers, including data backups, and data security” says Adendorff. “When performing upgrades or installing new features, the provider typically works with the ERP vendor to ensure the best outcomes for the client. At a time when blackouts are part of daily life in South Africa and becoming more common around the world, cloud ERP offers many advantages.”

Advantages of Cloud ERP:

1. Reduced risk of data loss
When ERP data is in the cloud, this mitigates the risk of data loss, downtime from hardware failure, and malware attacks. While power outages commonly cause hardware failures and data corruption for SMEs, cloud platforms are designed from the ground up for maximum data security. Data is kept in two separate locations so that a copy, i.e., a backup, will give the customer the way to quickly restore from a disaster.

2. High availability
Public cloud offers high availability, which is one of the key goals of moving to the cloud. Cloud service providers store client data in multiple geographic locations and use redundant data backup to ensure data does not get lost. Along with efficient incident management and reporting mechanisms, cloud services have a standard up-time rate of 99.9998% on infrastructure.

3. A secure platform for business
Cloud providers tend to have high-level security technology and practices in place. These should include access-and identity management, multi-factor authentication, and Intrusion Detection.

4. Secure access to important data
Among the major advantages of ERP software is the customisable dashboards that provide an understanding of business operations. With drag-and-drop visual elements, users can quickly interpret data to make informed decisions. These dashboards are designed for business functions such as marketing and sales, finance, and operations and other data categories for quick analysis. Access to these dashboards is readily available and secure via a cloud connection.

5. Business continuity compliance
For many organisations, the ability to demonstrate compliance by meeting specific standards for business continuity, disaster recovery and cybersecurity has become a competitive advantage. Some are obliged by compliance regulations to conduct regular checks for business continuity during IT service outages. Backing up data is the first step to any successful business continuity plan, and this is certainly made easier – and more dependable – with the cloud. In addition, one of the key advantages of using the cloud for business continuity is that applications can be accessed from anywhere.

“To make a successful move to the cloud, SMEs have to choose the right ERP partner and the right cloud ERP solution. It is important for SMEs to have an assessment of their infrastructure first. But for those seeking flexibility, stability, scalability, lower up-front investments, lower operating costs, and instant access to applications and enterprise-grade infrastructure, the time to make the move is now,” concludes Adendorff.