Cloud-based ERP Software: What Is It and How It Works?
In order to grow in the highly competitive business environment of today, organizations need state-of-the-art technology that can help them innovate and scale quickly. Businesses are in need of a digital transformation that can only be brought about by becoming globally connected, advanced, and competitive by focusing on software systems and tools updates, immediate access to real-time data, and implementing various growth initiatives. This is where cloud-based ERP software and all of its benefits come into play.
As technology evolves, businesses of all sizes, from startups to established big firms, are relying on cloud ERP because of its many benefits related to cost-effectiveness, speed, access, and reliability.
How Does Cloud ERP Software Work?
Cloud-based ERP software is an enterprise resource planning system that is connected to and runs with high-speed internet. This software is essential to integrating and automating various financial and operational business functions, offering users a single source of data.
Cloud-based ERP software offers limitless abilities for organizations to grow and empower their teams to access any information they need from anywhere at any time through desktop computers and mobile devices. The key capabilities of a cloud-based ERP platform include accessing customer information, financial data, human resource management tools, sales history, supply chain management, and so much more.
Cloud ERP software is hosted on a provider’s cloud computing platform and is used “as a service.” Customers do not own the software but can lease it from a cloud computing vendor on a monthly or annual subscription basis. The best part is that there are no hardware costs, and the vendor takes care of the data storage, data security, application maintenance, and upgrades.
Cloud ERP vs. On-Premise ERP
Cloud ERP is hosted by an external cloud computing platform and managed by the vendor’s IT team. On the other hand, on-premise ERP is installed on your own servers and hardware and is managed by an in-house IT team.
Due to its many benefits, businesses are increasingly embracing cloud technology when it comes to ERP deployment.
Functional Components of Cloud ERP Software
Cloud-based ERP software is so popular because it offers businesses a range of key financial and accounting capabilities. Depending on your business needs and goals, you can implement various types of applications or modules.
Some of the most popular cloud ERP modules are:
- Financial and Accounting
- Customer Relationship Management
- Order Management
- Logistics
- Procurement and Order Management
- Supply Chain Management
- Material Requirement Planning
- Inventory Management
- Warehouse Management System
- Manufacturing
- Shop Floor
- Service Center
- Returns to vendor
- Return Material Authorization Process
Top Benefits of Implementing Cloud-based ERP Software in Your Business
Cloud-based ERP delivers enormous value to businesses by helping them gain actionable insights and boost their productivity. Nowadays, customers expect continuous product and service improvements, rapid delivery of offerings, more flexibility, reduced cost, and greater reliability. They work with a range of partners, including sales management, support, production, product distribution, and other core business processes.
To handle all of this, the software is needed that not just seamlessly handles complex internal processes but also manages global business networks. Let’s take a look at how cloud-based ERP software benefits your organization:
Reduced Costs: One of the major benefits of cloud-based ERP software is the reduced cost, which starts during the implementation phase. The biggest downside of an on-premise ERP system is that it results in several upfront costs associated with creating an in-house IT team, data security and backup, purchase of servers, database creation, initial implementation, upgrades, and maintenance.
On the other hand, implementing cloud ERP software results in 30% lower costs since the cloud computing provider manages the software on their own servers and helps the business avoid upfront infrastructure costs and additional costs like updates, security, maintenance, and IT staff.
Quick Implementation: The time it takes to implement a new ERP solution is of paramount importance. If it takes a long time to integrate the ERP system, it can result in business downtime, which can be devastating to the bottom line. A cloud-based ERP software, however, is quicker to implement than on-premise ERP software since you don’t need to select or set up any hardware or train IT staff.
Seamless Accessibility: Cloud-based ERP platform allows businesses to access information in real-time from anywhere at any time. This creates a seamless flow of information across the organization and ensures all relevant employees are informed with the same data, resulting in better collaboration and faster and more accurate business decision-making.
Improved Scalability: Scaling your business becomes so much easier with a cloud-based ERP system. Your ERP system will grow along with your business as you start with the basics and add more functionalities without adding the extra burden of hardware. It eliminates the need for local servers, and as your company grows through acquisitions and mergers, it can quickly bring new units online. Cloud computing vendors own data centers around the world and keep their clients’ data in various locations, ensuring more reliability and security of data.
Easy Customization: Cloud-based ERP services can serve your business needs more easily as it evolves. On-premise ERP systems can also be customized, though the changes can be more difficult to implement since many customizations may not be compatible with future software. On the other hand, cloud-based ERP software can integrate well with other cloud products. In addition, it is flexible and allows new modules to be implemented to it without the need for additional hardware or downtime. This increases proactivity and resilience in a business, enabling it to respond quickly to any changes, customer behavior trends, and unexpected situations.
Ongoing Upgrades: Cloud ERP providers manage all system updates and upgrades in order to keep up with your business’s evolving needs. Implementing a cloud ERP system upgrade can take as little as 30 minutes, which usually takes place during off hours to prevent any business disruptions.
Better Data Security and Compliance: One of the biggest benefits of cloud ERP systems is that they offer better security and compliance than a company could afford on its own. Business data remains backed up on multiple servers, and the vendor is equipped with disaster recovery strategies and a business continuity plan. With cloud-based ERP software, you get the benefit of end-to-end encryption and enterprise-level security from the vendor.
Data Storage Resilience: If your on-premise server fails, it can be very expensive and time-consuming for the company to transfer the data to a new storage system. Cloud-based ERP systems, however, store data in multiple geographically dispersed data centers. This redundancy is significant for accessing business data online, which is crucial, considering that work is now moving online and businesses are seeking to automate and optimize their business processes.
Bottom Line
Cloud-based ERP systems are a sophisticated and proven solution used by thousands of companies all over the world to achieve digital transformation. Businesses that select cloud ERP services can accelerate their growth efforts since they have immediate real-time access to data and tools that can drive change, allowing them to capitalize on opportunities in the fastest ways possible.
Now is the time to get started with a cloud ERP system. At My Office Apps, our mission is to empower companies by leveraging cloud-based ERP technology. Talk to us today to discuss your business needs and start the journey to digital transformation.
Contact us to schedule a demo or learn more about how Kechie ERP Software can help streamline your business processes.