What is cloud-based ERP software?

What is cloud based ERP?

Cloud ERP is an Enterprise Resource Planning system that runs on a cloud computing platform rather than on-premises infrastructure. It provides real-time access to business data via the internet, allowing for scalability, automatic updates, lower IT costs, and remote accessibility across departments and locations.

While traditional ERP is an on-premise system that runs on in-house servers at a company's location, Cloud ERP systems run on a vendor-managed public or private cloud, eliminating the need for on-premise installations and offer a wide range of time, resource, and cost-saving benefits.

How does cloud ERP work?

Cloud-based ERP systems help to increase the efficiency and connectivity of an organization by managing and improving how company resources are utilized without the maintenance and resource requirements of an on-premise solution.

Cloud ERP works by storing and managing all of an organization's business data and applications on a remote server, accessible through the internet. This means that users can access the system from anywhere, anytime, using any device with an internet connection.

The cloud-based platform allows for automatic updates and maintenance, reducing the need for manual IT support. Data security is also enhanced through advanced encryption and regular backups, reducing the risk of data loss or cyber attacks.

ERP deployment

Multi-tenant SaaS

Many cloud systems are multi-tenant SaaS. A multi-tenant model means multiple organizations use a single software version and its infrastructure. Although different organizations use the same software hosted on the same server, each organization's data is inaccessible to others.

Single-tenant SaaS

This model means that only one organization uses a single system and its infrastructure. That organization's data is hosted on a private server, with each organizations data and configurations isolated from others, and any customizations or modifications made to the software are unique to each organization.

Public cloud

In a public cloud, multiple organizations share cloud services that are owned by a third party vendor, such as Amazon Web Services (AWS) or Google Cloud.

Private cloud
Completely private cloud usage that is not shared with any other organization. A private cloud generally has a much higher upfront cost, but comes with:

• A Dedicated Infrastructure
• More Customization
• Better Security and Control

The scalability of a private cloud setup is limited by the physical infrastructure's capacity, therefore, expanding the capacity might require additional hardware investments.

Hybrid cloud

Hybrid is a “mix” of both, combining on-premise ERP software with a private or public cloud. With a hybrid cloud setup, organizations can have greater flexibility and more deployment options. For example, critical workloads can be run within the private cloud, while less-sensitive workloads can be run on the public cloud.

Why choose cloud ERP over on-premise ERP?

Cloud ERP is the ideal solution for companies that don't have an in-house IT department or those who may be intimidated by the challenges of on-premise ERP.

It's more affordable, it's more accessible, and it's also faster in terms of implementation. Vendors usually offer cloud ERP based on an annual or monthly subscription fee. The fee often covers software updates, security, installation, customer service, and tech support. As a result, organizations worry less about their operational processes and have more time to focus on their actual business strategy.

Cloud ERP is a particularly attractive option for businesses looking to scale up and grow their operations because Cloud ERP is often offered as a solutions suite or package consisting of several basic modules, with each module targeting a specific area of the business. If, for example, a customer doesn't require a complete cloud ERP suite, it's possible to choose only the required modules and scale as and when needed.

Ideally, because cloud ERP runs on a vendor-managed public or private cloud, it's exceedingly more cost-effective. Cloud-based solutions provide the flexibility and mobility to access an ERP system and its connected solutions through the vendor's cloud platform and are more convenient, as the system can be accessed from any location and at any time.

Different types of cloud ERP deployment

Improved system performance and accessibility

Cloud ERP offers unmatched system performance, ensuring smooth business operations without the hiccups often associated with on-premise systems. The cloud infrastructure guarantees high uptime, reducing system outages and disruptions. Cloud accessibility means businesses can operate from anywhere, which boosts productivity and ensures that decision-makers have constant access to real-time data.

Cost efficiency

Unlike traditional systems with high upfront costs, Cloud ERP operates on a subscription model with predictable costs. This often includes software updates, security, installation, customer service, and tech support. As a result, businesses can better manage their budgets, eliminating unexpected expenses and focusing more on strategic investments.

Scalability

Cloud ERP offers modular solutions that can be adjusted to specific needs. If a company doesn't require a full suite, they can opt for specific modules and then scale up as their operations expand. This flexibility ensures that businesses only pay for what they need, allowing for efficient resource allocation.

Rapid deployment

Cloud solutions can be implemented much faster than traditional systems, resulting in minimal disruptions and allowing businesses to benefit from the new system quickly.

What's in it for your business? The benefits of cloud ERP

In today's fast-paced business world, more and more companies are focusing on cloud ERP to maintain business continuity, keep up with the surge in digital transformation, and stay ahead of the competition. Cloud ERP offers businesses a wide range of value-added benefits. Here are the Top 8 benefits of cloud ERP.  

Increased performance

On-premise ERP needs to rely on 'big' computer power, including extensive hardware, servers, and costly IT resources to carry the load. Cloud ERP just needs a reliable Internet connection, and it's your vendor who manages the rest. Your Cloud ERP will perform faster and better, with little or no downtime, as would an on-premise system.

Reduced operating costs

On-premise ERP solutions need hardware and an IT team to maintain them. You'll then have to purchase the system, licenses, renewals, and updates. With cloud ERP, pricing is based on a flat-rate fee, reducing your implementation costs and overall expenses, especially since your provider can manage your maintenance.

Easier data access

With cloud ERP, you can access your information from anywhere, anytime, with an Internet connection. This enables your workforce to work outside the office, at customer's sites, and on the go, with fast, easy, and real-time data access.

Enhanced security

You want to keep your data safe inside and outside of your organization. Cloud ERP ensures that your company data is secure when moving from your systems to the host servers. To safeguard internal data, cloud ERP offers strict user-level access provided and secured by the system itself.

Innovation and upgrades

Cloud ERP helps businesses adapt to today's business challenges. A Cloud ERP system provides organizations with real-time visibility into the business, as the organization's data, including the latest software versions and updates, are updated in real-time on the Cloud. Stakeholders can drill down by using reporting apps and analytics to monitor workflows and processes in the organization and react quickly to changes in the supply chain.

Automatic updates and maintenance

Cloud ERP ensures that businesses always operate on the latest software version without manual intervention. It enhances system performance and security and frees up valuable time, allowing companies to focus on core business activities without worrying about system upkeep.

Customizations and agility

Some Cloud ERP systems offer customizations tailored to specific business needs. This agility allows companies to adapt swiftly to changing market dynamics. By enabling bespoke configurations and rapid adjustments, Cloud ERP ensures that businesses remain competitive, responsive, and aligned with their unique operational requirements.

Disaster recovery

Cloud ERP systems have built-in mechanisms to restore data and ensure business continuity in unforeseen incidents, like data breaches or system failures. This eliminates prolonged downtimes and safeguards critical business information.

Is cloud ERP “Right” for my business?

When taking the benefits listed above into consideration, there are “tried and true” reasons why most companies would yield positive results, increase efficiency and productivity, and reduce costs by onboarding a cloud ERP system. If your organization is thinking about implementing an ERP system or upgrading your current ERP, Cloud ERP is a solid and viable option.

If your organization is global, with offices dispersed throughout various locations, and if you work closely with colleagues, vendors, and/or partners around the world, then cloud ERP is a good fit. Similarly, if your business is primed and ready to grow, and implementing an ERP is on the table, but an on-premise system is not within your budget, cloud ERP delivers the accessibility and functionality you need to manage and control your business on a global scale.