Do you know what Cloud ERP or ERP in the cloud is? First of all we need to understand what ERP means, for those who still don’t know it. An ERP (Enterprise Resource Planning) is a system capable of integrating information from different business departments facilitating its transit through the company and allowing decision making on a much more solid and consistent basis.
“An ERP centralizes all the information and business operations of a company in a single system making the information more fluid and accessible”
Now let’s see how it works in the cloud and the reasons why many organizations are turning to this new option. If traditionally every infrastructure of an ERP was installed in our company, with the emergence of Cloud Computing and Software-as-a-Service (SaaS), companies gain agility when having an external server where they can host all their software, including the ERP. The ERP in the cloud acquires the status of a service as simply by using a device (computer, mobile phone, tablet …) with Internet connection we will be able to access any of our softwares and work from there, no matter where we are.
This way managing our business is now easier, enabling a greater connection between the departments and employees of an organization. This new trend has been incorporated into many IT Strategic Management masters, training professionals who are capable of exploiting this new software distribution model and turning it into a competitive advantage for their companies.
But how can the Cloud ERP and SaaS format improve the daily life of a company? Let’s have a look at the main benefits of using ERP in the SaaS cloud format:
Lower TCO (total cost of ownership)
In the present situation, many companies are forced to cut back on expenses and we all know that the license of many applications can be quite expensive. That’s why many companies choose the Cloud ERP format, as the payment for the software is done by use or under a subscription model, so that fixed costs are reduced and the initial investment turns much lower.
This way, organizations no longer have to worry about the costs involved with maintaining or repairing any issue in their ERP: from hiring staff for their maintenance or outsourcing to external specialized companies to possible errors or malfunctions that may occur and result in economic and time costs. All of this costs will disappear when working with a Cloud ERP, as the maintenance and support is also included on the price the company pays for the service.
The implementation time of an ERP in the cloud may be considerably less than the traditional way. The provider is responsible for providing us the product ready for its operation and any issues arising will be their responsibility. Moreover, providers usually have high quality servers so that the risk concerning system fails is reduced.
The Cloud ERP allows us access to the software no matter where we are or when and how we use it. We just need to have a device with Internet access in order to proceed with our work.
As any employee from any of the departments can connect to the external server, the relationships between the different offices, departments or teams within an organization improve considerably. There are no more geographical or time limits for working on the same project, as the information flows from one device to another.
Much easier to update
The cloud technology performs all updates automatically, contrary to what happens with traditional ERP, what used to cause dispense with updating the software in many companies due to its cost.
This is perhaps one of the main myths about cloud computing. Although we believe that working from the cloud can be less secure, the fact is that our ERP will be more protected against possible cyber-attacks than if we chose any of the common security methods.
So should you chose a traditional ERP or a Cloud ERP? Everything will depend on the interests and objectives of your company.