An Enterprise Resource Planning (ERP) is a software that helps the business to collect and organise data which is available in several business functions and to use it for business decision-making. It also encourages the business to streamline its process thus making it agile and efficient. An ERP forms an important structure of business. Almost all production companies have ERP in place and invest quite some money to keep it upgraded and useful. ERPs were usually stored in a company’s own server infrastructure. The same was updated and serviced at regular intervals for better performance. This kind of traditional ERP is popular as On-Premise ERP and an IT team is responsible for taking care of it.
However, companies are now switching to Cloud ERP which is very easy to maintain and is equally secure. The Cloud ERP is stored in a cloud and is also known as SaaS (Software as a service). It also sources the information from several departments of the firm and then integrates the same to provide clearer data which is further used by the management. It acts as a readymade platform where companies can enjoy customised business data solutions. Cloud ERP has enabled even small and medium businesses to acquire ERP solutions without having to manage anything. In the near future, it is predicted that most of the companies will eventually shift to Cloud ERP rather than choosing the traditional models.
How is Cloud ERP useful for the companies?
- Costs: One of the key benefits of Cloud ERP is that it saves the hardware storage costs to the company. This proves to be extremely beneficial in situations where the company is expanding and will need more space to house the servers. It also saves the costs which are spent on regular maintenance and repairs of servers across different locations. The firm will not have to bother about these issues. The software vendor will house and manage the software on an agreed subscription rate. It acts as fixed and a known expense to the firm with no immediate changes. To also add to this, the user will pay only for space they have purchased from the software vendor. This can also be altered depending on the usage trend study. The firm also saves the costs that need to be spent on human resources if it sets up its own ERP. The manpower will be needed to maintain, inspect and protect the data servers. This responsibility will shift on the software vendor if cloud ERP is chosen.
- Mobility: The data can be accessed from anywhere and any device with the use of the internet. This provides a lot of mobility to the business. The users do not have to always be in office to make use of the necessary data. Instead, they can use it from any location and can also use it on the desktop or even a mobile phone. This helps work get finished faster and the management is always on a forward mode when it comes to using the information.
- Data upgrade: Another benefit to being mentioned in the list is that Cloud ERP enables the users to use updated software as it automatically updates whenever it is required to do so. It is highly flexible and can be tailored to suit the business processes and needs. The software can be configured in such a way that it boosts the information of the business and makes it reliable at all times.
- Safety: The information stored is highly secure and is backed in several locations which make it worth an investment. It helps the business to deal with all the information needs so that the management can focus solely on business decisions and improvement. Apart from the controls implied by the firms to ensure data security, the software vendors create their own audit controls to ensure complete data protection and deter any kind of violation.
- Scalability: Cloud ERP has an increased scalability. It can help firms who are expanding quickly in a large scale to get all the data platform and applications they need to support their growing business. It can also introduce new functions that might prove to be helpful for better data integration and reporting. To explain this further, consider an example of a new pizza shop. The owner will have to deal with several inventory and service issues. Apart from this, the delivery has to be done. If the same business is expanding and if the owner has 3 different shops, he will need 3 different servers, computers and other resources to keep the track of his transactions. Instead, if he chooses a cloud software vendor he can save the entire cost of setting up the IT sections and everything can be managed with one customised software. The added advantage is that the vendor will be even able to customise the ERP based on the needs of the business.
- Easy: It reduces the firm’s burden by simplifying the whole process. The firm doesn’t have to deal with the network issues, breakdowns or data security concerns. All the worry is shifted to the vendor. It allows the management to spend enough time on crucial business decisions and alike.
Though the benefits of choosing a Cloud ERP are several, choosing the right one is important. By selecting the apt Cloud ERP a business can make the most of it but it is also crucial to understand the fact that of an incorrect Cloud ERP is chosen it can lead to issues especially in monetary terms. The company’s important data can be compromised and this can lead to other severe implications which can bring down the business altogether. Here are few of the pointers to know before choosing the appropriate Cloud ERP:
- Whether it will suit your business requirement: this is the first thing that you will have to understand before making the purchase. If the company is selling soaps and if the Cloud ERP is designed for a taxation firm then is doesn’t make sense to opt for it. The criteria of the business have to be understood and then accordingly a suitable one has to be subscribed for.
- Strengths of the product: this will help to analyse the product that the software vendor is offering and will also reveal the advantages that can be enjoyed if the product is chosen. All the features that are promised must be equally understood and the firm must be convinced that this Cloud ERP will really help in building the business further.
- Vendor reliability: this is very crucial and the business has to judge the same very carefully. Before making the purchase the credibility of the vendor has to be checked and verified. As Cloud ERP deals with company’s wholesome data, this verification is one of the crucial elements of the process.
- Additional services: a comparison can be made between the various ERPs for a better understanding. After sales support, training and updating are few of the factors to be looked into.
Once the business checks various options existing in the market, it can further decide which is the ideal Cloud ERP for the same and can then further proceed in subscribing for it. Based on the modules, apps, prices, a final call can be taken by the management. Few modules which are generally a part of the Cloud ERP:
- Inventory management
- Sales management
- Financial management
- Production management
- Supply chain management
- Customer relationship management
The firms can combine the above-stated modules and create customised tools in just a few clicks. With the easy interface, Cloud ERP is not just user-friendly but also runs seamlessly on iPhone and Android devices too. Several software vendors offer a free trial which is limited to a specific period of time. Firms can make use of this trial option and review the product before actually subscribing for it. It assists them to practically use and analyse the product before making the choice.
Few things to be cautious while choosing Cloud ERP:
- Data Security: as the data is backed in different locations, the business has to ensure double that data safety is observed and designed carefully as the vendor would create security controls. It must also be considered that the controls adhere to the legalities of the industry and the nation. The vendor must carefully follow all the statutory instructions and must also take into account the firm’s auditing controls. This holds good especially for companies who have enormous data to manage. For a company like Amazon where millions of users use the data, it is crucial that appropriate security measures are in place.
- Recovery: it must be ensured by the vendor that in the case of some rare disasters, the firm doesn’t lose its entire data. The lost information must be retrieved as almost all business disciplines use ERP and any loss of data can make the business suffer. For instance, if a firm loses out its previous financial information it may be unable to produce the essential documents which might be later useful during auditing or taxation enquiries. Even though most of the vendors are addressing this concern, it must be re-checked by the firm too.
- Expenditure: the amount that the company is spending in subscribing for the Cloud ERPs must be tracked. Initially the offers might look attractive and feasible but in the long run, they might prove to be way too expensive. This must be kept into account by the firm and regular negotiations might help.
- The extent of customisation: Cloud ERPs provide customizations but only to a certain limit. Bigger companies need a wide range of customizations to offer better service to their customers. This is one restriction of using Cloud ERPs. Though this does not make much of a difference to the small and medium scale companies, huge organisations see this as a lack of opportunity. One more thing to be noted is that a bigger firm also comprises of several old and obsolete systems. When Cloud ERPs are incorporated in tandem with them it leads to several technical difficulties and safety concerns.
To name a few leading Cloud ERP vendors in the market are:
- Plex Online
These companies are growing exponentially. Though the software giants such as Oracle, SAP, and Microsoft are going slow and have only stepped in the recent years. They are combining on-premise and cloud ERPs to offer sensible business solutions to the production companies. To conclude, Cloud ERP is gaining momentum with the firms rapidly shifting to the new age ERP. With several benefits lined up, this seems to be an option that is going to sustain a while till the next upgrade. Wait and watch for the next cloud!