With the continuous innovation of technology, more systems were developed that can help businesses. One of these is cloud ERP. Is this the right system for your business? Find out with this article.
Cloud ERP is software for enterprise resource planning which can be accessed through the internet. It runs on the vendor’s cloud computing platform instead of premises in an organization’s data center.
The system can integrate an organization’s business processes, including inventory management & purchasing, HR, accounting, etc., into a unified system.
ERP system was first introduced way back in the 1990s. It helps to automate and manage end-to-end business processes across an organization. In its early days, the system had run on-premise. Then, it was changed in the 2000s after the cloud ERP was launched.
Cloud ERP system components
A cloud ERP system comes with a centralized database to store information about the business operations, making it readily shared and accessed among modules. One standard module for an ERP system is the one for finance and accounting functions.
In addition, ERP products usually offer modules for customer relationship management (CRM) and human capital management (HCM). Modules for order management and procurement are also commonly used because it is common in different businesses and industries.
If an organization distributes or manufactures physical goods, ERP modules can be used, like supply chain management and inventory management. The modules of cloud ERP are narrowly focused and more specialized based on the requirements or industry of a company.
Cloud ERP solutions can offer you flexibility and advanced features to help your company succeed in today’s digital era. The components of cloud ERP can allow for the growth and success of your business. To summarize, the cloud ERP system components include:
- Human capital management
- Finance and accounting
- Inventory management
- Customer relationship management
- Order management
- Project management
- Supply chain management
- Material requirements planning
With a cloud ERP system, you can use the modules or components that best suit your business needs.
Cloud ERP VS On-premises ERP
Cloud and on-premises ERP products may have different modules. During the early years, cloud versions had fewer modules than their on-premises predecessors. With the continuous development of the system, cloud ERP software today offers a wide range of functional modules available on-premises.
On-premises ERP can have high upfront costs like a multi-year license. On the other hand, cloud ERP is a per-user subscription and has monthly fees. With cloud ERP, you can invest less in IT structure and staff.
What are the types of cloud ERP software?
The advanced system is available in different types. These include the following:
Single-tenant SaaS ERP
In this cloud ERP type, you can have a slice of the software which runs on the vendor’s cloud platform. Your organization’s data is hosted on a private server that runs as unique software. Many vendors will give you a choice to run with a shared instance or a private instance.
Multi-tenant SaaS ERP
This type of ERP is the simplest and purest. It has fewer modules and customization. It is more affordable and easiest to deploy.
Private cloud ERP
It was a single instance of ERP software that operates on cloud infrastructure hosted by an ERP vendor or third-party provider. Private cloud ERP can scale resources and comes with subscription pricing. This type of ERP cloud can entirely run on-premises in a company with a cloud infrastructure.
All types of ERP are hosted on the public cloud, cloud computing services, and infrastructure and services from a provider than an ERP vendor itself. Many cloud ERP vendors have already outsourced cloud platforms to public cloud providers, including Google Cloud, Amazon Web Services, and Microsoft Azure.
Advantages of cloud ERP software
Using cloud ERP software has many benefits. It is more affordable and easier to maintain compared to on-premises ERP. Thus, the provider of cloud ERP handles the maintenance of software and hardware.
Another advantage of cloud ERP is its availability, disaster recovery, and backup, which lower interruptions to the software. The system has a lower cost of ownership. With the easy and cheaper internet connectivity, you can extend the system to outside partners, suppliers, and customers.
It is helpful for a new collaboration level in critical procedures, including supply chain management, sales forecasting, and talent acquisition. Cloud ERP lets you pay only the resources used.
The cloud ERP software also has faster delivery of new technologies compared to on-premises ERP. System providers also have the most adept in enhancing ERP user experience.
The software also features compliance, security, and disaster recovery. Providers of cloud ERP software can provide you with better compliance and security. It has end-to-end data encryption and enterprise-grade security.
Cloud ERP vendors also manage all updates and upgrades of the system on an ongoing basis. So, you have assurance that your business can meet its needs. Moreover, customers can also use the latest technology. Updates with the system can only take about 30 minutes and may happen during off-hours to avoid business disruptions.
With its features and benefits, integrating cloud ERP systems into your company is the solution to grow your business.
Challenges with cloud ERP software
Even though cloud ERP has many advantages, it also has some management challenges. Some administrators may lose significant control as the software moves off-site. Additionally, cloud ERP needs change management and substantial training to let workers become accustomed to the new business processes and workflows.
Organizations should also adapt to the security of the cloud ERP provider. They need to adhere to the security and privacy regulations if ERP data reside in different data centers.
Legacy systems can be an issue with cloud ERP. Shifting to cloud-based ERP software can be challenging if a bigger organization has been using an on-premises ERP system for several years. It may also need significant expertise and time.
To sum it up, Cloud ERP solutions are an excellent system to enhance the operations of your business. It allows your team to access needed information wherever their work takes them. Integrating cloud ERP software is the best decision if you want to level up your business processes.