ERP Systems In The Cloud: Why Go To The Cloud
ERP systems in the cloud offer flexibility, security, and cost reduction. Discover why more and more businesses are moving to the Cloud.
The greatest advantage of cloud-based computing is that it enables companies to access software applications that run on shared computing resources over the Internet. Such assets incorporate preparing force, memory, and circle stockpiling These processing assets are kept in far off server farms devoted to facilitating different applications on various stages.
The ERP systems in the cloud are, in simple terms, software tools that allow access to all the functionality of ERP software over the Internet. In other words, critical business applications can be accessed anytime, anywhere. And they generally have much lower initial technology access costs.
Although on a technical level the only difference between ERP systems in the cloud and the traditional ones installed in the client’s local infrastructure is where the software is hosted, there are other significant differences that we will tell you about below.
The Cloud brings benefits to any business, but particularly effectively to small and medium-sized businesses because it enables access to fully functional technology at a reasonable price without large initial investments in equipment and software licenses. Additionally, by working with a cloud ERP provider that fits the needs of the business, any business can rapidly scale the capacity of this key software for operations and productivity as it grows.
What benefits does cloud computing bring to ERP software?
As we have discussed, ERP systems in the cloud allow you to reduce costs in many ways because:
- Up-front costs for the entire IT infrastructure, such as hardware and data servers, are avoided
- The costs associated with maintenance and technical support are drastically reduced because it is the ERP software provider who performs it.
- The advance payment of software licenses or in high installments compared to a monthly fee (the most frequent modality in recent years is the payment of software as a service or SaaS) is eliminated, which allows companies to have a spending structure more flexible and more liquid to face other business projects.
However, cost reduction is not the only benefit obtained by companies that move their ERP tools to the cloud:
- Business resources are optimized since you only pay for what you use.
- ERP software can be implemented much faster by not requiring a large initial investment in equipment.
- They allow software capacity to be adjusted quickly as data storage, computing or operational needs change. In the digital age, having the flexibility to tailor critical business tools to business needs is key.
- Data security backed by recovery plans and backups provided by specialized companies and with an infrastructure much greater than what any small business can have on its local server.
- Permanent updates. Cloud ERP system providers constantly develop new functionalities or software improvements that for an individual company is very expensive to maintain since it not only involves custom development but also usability tests and tests that can interrupt the business operation.
- Greater reach and connectivity with other applications. Developing and maintaining in isolation is not only expensive at the cost level. For many companies, it represents a high opportunity cost as they cannot integrate it with other applications that add value to the business. Cloud software providers in any sector are increasingly working to create systems that can be integrated via REST API (or any other interoperable way) that allow their clients to have comprehensive solutions and not have to work with outdated or disconnected data in silos.
- High availability and access: accessing the system from anywhere facilitates the geographic expansion of companies since the Internet is accessible anywhere and it is not necessary to implement software or install hardware in remote locations.
Terms and expressions that cause confusion around “the cloud”
Around cloud-based technology, a glossary of terms and expressions has been generated that can generate confusion. We clarify the main concepts.
Within the forms of software implementation associated with the cloud, there are the following options:
- On-Premise: The company is responsible for the physical infrastructure – software, hardware, communications, software on devices – as well as implementation, support, and updates. It is a model that does not present great differences with traditional developments.
- Hosted: The hosting or web hosting provider acquires a license for the software and manages most or all of the infrastructure and software implementation. In this model, the hosting provider can be a different company or a division or department of the contracting company itself. It is an intermediate model in which the company still assumes many responsibilities.
- Software as a Service (SaaS): it is the model with the greatest impact on the market today. The company accesses software by paying a subscription. For this fixed amount, you access the service and are not subject to payment for updates or intellectual property rights on the software.
In the latter model, the service provider can use a public cloud for hosting. Let’s see what are the types of cloud and what are their differences.
We basically find three types of cloud:
- Private: as the name suggests, it is a private storage space, maintained by the software provider.
- Public: Owned by an IT company, which also provides hardware, security, and support. Some examples of IT companies that provide public cloud hosting are IBM, Microsoft, and Amazon.
- Hybrid: This is a combined approach to the on-premises public cloud, private cloud, and third-party services.
Finally, you need to consider the conditions under which software is shared in the cloud. We find two types:
- Multi-Tenancy – The cloud software provider has a single version of the software on a server and rents it to different users simultaneously.
- Single-Tenancy – each user has their own application and their own database.
Of course, multiple tenures reduces costs for the user.
Common Features of ERP Cloud Software
Cloud ERP systems include the same capabilities as on-premises ERP solutions, such as the following:
- Financial management: accounting and operations.
- Commercial and sales management: customer relationship management and CRM.
- Projects management.
- Human Resources.
- Production chain, product life cycle management, and manufacturing resources.
- Inventory and warehouse management.
- Supply chain management.
- Document management.
- Quality management.
- Analysis and business intelligence with reports to improve decision making.
In addition, ERP Cloud software provides some advantages that should also be taken into account :
- Easy to use. Because cloud ERP systems are accessed over the Internet, the user interface looks similar to a web page, so they are often more intuitive and help companies reduce resistance to change. employees and reduces the investment required in employee training.
- Reduction of personnel costs that can be applied to other business areas where technical personnel can add value. Because the software vendor hosts and maintains the software (performing maintenance, upgrades, and backups), there is less need to invest in an internal technical team and their ongoing training to maintain the systems.
- Focus on business growth. The biggest concern with a cloud-based system is that it relies on a strong and consistent internet connection. Technology propels the business to achieve its objectives and not become a drag every time you want to launch a new initiative.
Name- Mukul Mahajan
Bio- Mukul Mahajan, is one of the Directors and founder of Tetra Information Services Pvt Ltd. Company is focused on providing Cost-effective solutions to Corporates using Open source techn