The Benefits of Cloud ERP Systems
On-site and cloud ERP solutions both offer their advantages and disadvantages. But what is a Cloud based ERP system versus an on-site one?
Cloud ERP (Enterprise Resource Planning) is a service that does not have to be managed or serviced by the business’s own IT staff. It falls under the banner of SaaS, otherwise known as ‘Software as a Service’. Software as a Service is a cloud-based service where instead of downloading the software to a business network or PC to use, one accesses it via an application on an internet browser. It can take the form of word-processing software to graphics software or to ERP systems. With Cloud ERP, a business’s ERP software and its data and information are managed centrally (on the Internet “cloud”). They are then accessed remotely by users and customers using their web browsers.
On-premise ERP solutions are installed locally on your company’s hardware and servers, then managed by your own staff. They usually require a larger upfront cost to purchase the software outright, and also require the business to procure and manage the software and the related hardware necessary to run it. Most people prefer on-premise ERP tools like it because of the security of data and control that comes with having the ERP system in the office. On-site ERP programmes are also owned by the company and not based on a monthly subscription for access, so companies own their own data and are not obligated to pay a subscription in order to access it. On-premise ERP software can also be customized much easier than cloud solutions, which offers a greater advantage for more companies with specialised needs. The other downside of Cloud ERP is that it requires a stable internet connection: something that in the South African electricity crisis and the increase in home working simply cannot be taken for granted.
But what of the advantages and drawcards of the Cloud ERP space? Below we explore some of the main advantages.
Flexibility
One of the major upsides of Cloud ERP is flexibility, and never has this been seen more than during the COVID-19 pandemic. As long as you have internet connectivity, as an owner or employee, you can access all the functionality and data of the company’s data from wherever you are in the world. The cloud system stores and operates everything remotely, so even if users are spread geographically they can still input data in real-time from any compatible device- be it a tablet, PC, or laptop.
Real-Time Analytics
One of the other benefits of cloud ERP software is access to real-time analytics. This allows companies to see important information as it becomes available, so you can rest easy knowing that the data you’re looking at is always relevant and up-to-date. An on-site ERP system obviously has internal data in real-time, but currencies, rates and other variables on the global market can be updated in real-time in a cloud environment. Real-time analytics assist when making critical business decisions.
Security
Some people are circumspect about cloud security. Some feel that cloud encryption is not secure enough, or that it is an easy target for hackers. However, in reality, cloud ERP software provides solid security driven by massive pressure. Without exceptional security protocols, they simply would not get the business. Indeed, your on-site network is also vulnerable to security and hacker attempts, so this is not an issue unique to cloud computing.
Lower Operating Costs
Depending on the scale, complexity, and needs of your business, cloud ERP can often work out cheaper- at least in the short term. Instead of the upfront cost of software and potentially hardware purchases, you are given a monthly subscription fee instead (SaaS, Software as a Service). You are able to stop when you like. This can save enormously on set-up costs, and depending on the scale of your business, also ongoing hardware maintenance costs. If, however, your business needs a fair amount of customization, then cloud ERP can be a much more expensive way to go.
Scalability and Upgrades
Because you are not using your own hardware and network to carry your business, cloud ERP can make it a lot easier to scale up, and also down. Simply by altering your subscription and package your business can be expanded or contracted with functionality and users, almost at the touch of a button. This is because the cloud ERP adjusts the entire infrastructure for you (short of the local laptops, PC’s or tablets needed onsite for your staff) necessary for each stage of the development. Upgrades are also handled a lot more seamlessly, as these are handled by the provider, and also ensures that you are always working with the latest version of the software.
Cloud ERP is definitely an area of the software that cannot be ignored. The remote-working world of Covid-19 has seen this, already popular, modality becomes even more attractive. While not without its drawbacks, cloud ERP systems are gaining in popularity as the way companies work changes, and handing control over data and hardware (and their associated problems!) becomes a much easier and safer process for many businesses.
