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The Benefits of Cloud ERP for Businesses

From global access and real-time insights to lower operating costs and built-in scalability, the many benefits of Cloud ERP positively impact the entire business.
How to choose the right Cloud ERP solution for your business

Why You Should Implement a Cloud ERP Solution?

Small and midsized businesses (SMBs) face a lot of challenges in today’s competitive and turbulent economy. They need to improve their performance, boost their efficiency, and increase their profitability. A cloud ERP solution can help SMBs overcome these challenges.

A cloud ERP solution is a software application that helps businesses automate and streamline their critical business functions. It also acts as a central repository of all business data, providing users with a single source of truth.

There are two types of ERP solutions: on-premises and cloud-based. Let’s examine the differences between on-premises and cloud ERP solutions—and the benefits of cloud ERP—to find out why.

What are the Differences Between On-Premises and Cloud ERP Solutions?

An ERP (short for “enterprise resource planning”) solution connects a company’s departments and acts as a single, centralized database. Data from sales, accounting, marketing, HR, and more streams into the ERP solution, and authorized users have access to the synchronized and accurate information. Such data sharing aids in the successful completion of tasks and in the making of strategic business decisions. This is true whether the ERP is implemented on-premises or in the cloud, but that’s where the similarities end.

With an on-premises solution, companies pay for the ERP software, the license to use the software, and the hardware upon which it runs. The hardware is installed on-premises—hence, the name—and must be configured for compatibility with existing technology. Expert IT technicians, who implement the ERP solution across the organization, will also be tasked with its upkeep. This includes performing routine maintenance, replacing aging and/or defective parts, regularly updating the software, and executing vital security measures. The effort and expense to maintain an on-premises solution adds up over the years.

In contrast, cloud ERP solutions are affordable and easy-to-use from the outset. The cloud ERP vendor manages the hardware in an offsite data center and offers the solution via the internet. Once the software is available, every user can remotely access the software with any web-enabled device at any time and from anywhere, which ensures businesses have ongoing, all-time functionality. Additionally, upgrades, upkeep, and security needs are the vendor’s responsibility.

Amanda Datte
"When we switched to Acumatica, it really created a seamless experience for our consumer, because our data accuracy, our inventory, and the way we communicated with our customers was in one spot and created a single source of truth."
Amanda Datte, CFO
Clive Coffee

What are the Benefits of Cloud ERP Solutions?

Clearly, significant differences exist between on-premises and cloud ERP systems, and these differences point to cloud ERP for business advantages. These advantages include:

  • Global Access and Enterprise-Level Security: As noted, a cloud ERP solution provides businesses with unparalleled, 24/7 access to their data. Employees working from home, in the office, on the road, or in varying locations can input and extract data in real time using any connected mobile device. The information they see is the same information their co-workers see, which encourages and enhances company-wide communication and collaboration. And employees—regardless of where they are or when they access the system—enjoy enterprise-level data security provided by the cloud ERP vendor and the third-party hosting platform (e.g., Amazon Web Services (AWS)) the vendor uses. Constant monitoring, repeated testing, and automatic updates by the vendor and the hosting platform counteract the onslaught of cyberattacks businesses deal with every day.
  • Real-Time Insights and Analytics: Having access to real-time and secure data is an important example of the benefits of cloud ERP solutions. But cloud ERP solutions can take it a step further by leveraging sophisticated business intelligence tools, such as Microsoft Power BI, as a way to analyze a business’ raw data and combine it with external data sources in order to spot trends, identify inefficiencies, and grow the business.
  • Bringing Down the Cost of Operation: Many SMBs underestimate the cost of an on-premises ERP solution. Investing in and installing hardware on private, company-owned servers is expensive, and it’s likely the installation will require upgrading the SMB’s current infrastructure, causing costs to skyrocket. And if the SMB’s IT department does not have the expertise required for installing, implementing, and maintaining the on-premises solution, then add hiring and training new IT staff members to the price. With a cloud ERP solution, the software and hardware requirements are managed solely by the ERP vendor and the cost is covered by the subscription fee, bringing down the cost of operation substantially.
  • Built-In Scalability: Scalability, according to the Gartner Glossary, “is the measure of a system’s ability to increase or decrease in performance and cost in response to changes in application and system processing demands.” It goes on to note that “demands” encompass an increase or decrease in the number of users and queries as well as how an operating system “performs on different classes of hardware.” Unfortunately, on-premises systems are fairly static, meaning they require users to purchase additional equipment—which will require ongoing maintenance—to handle their continually changing needs. This is not the case with cloud ERP for business. A cloud ERP solution allows SMBs to easily and quickly scale up or down without purchasing/installing new hardware and without new software licenses.
  • Ease of Implementation: Cloud ERP solutions are typically easier to implement than on-premises ERP systems. This is because the vendor typically handles the installation and configuration of the software.
  • Continuous updates: Cloud ERP solutions are continuously updated with new features and functionality. This means that businesses always have access to the latest and greatest features, without having to worry about upgrading their software.

In addition to these benefits, cloud ERP can also help businesses improve their efficiency, productivity, and decision-making. For example, cloud ERP can help businesses automate tasks, track inventory levels, and generate reports. This can free up employees to focus on more strategic tasks, and it can help businesses make better decisions about their operations.

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Here are some specific examples of how cloud ERP can benefit businesses:

  • A manufacturing company can use cloud ERP to track inventory levels and optimize production schedules. This can help the company reduce costs and improve efficiency.
  • A retail company can use cloud ERP to manage customer orders and track sales data. This can help the company improve customer service and identify trends in sales.
  • A service company can use cloud ERP to manage projects and track employee timesheets. This can help the company improve project management and ensure that employees are billing their time accurately.

If you are considering implementing cloud ERP, there are a few things you should keep in mind:

  • Make sure the vendor has a good track record of security.
  • Choose a solution that is scalable and can grow with your business.
  • Make sure the solution has the features and functionality you need.
  • Consider the cost of the solution, both upfront and ongoing.

Overall, cloud ERP can be a great way for businesses to improve their efficiency, productivity, and decision-making. If you are considering implementing an ERP system, cloud ERP is a good option to consider.


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