Cloud ERP Solutions

Ever since the introduction of full scale-ERP Systems in the 1990s, companies have faced high costs of implementing proprietary IT Server Infrastructure and Systems. Cloud ERP Solutions help organizations to improve productivity and reap faster ROI, integrating essential business functions like Accounting, Finance, Procurement, Human Resources, Customer Relationship Management etc. with an internet connection allowing greater collaboration among departments. The late 2000s saw the arrival of Cloud Solutions where the ERP system is distributed from the Cloud and accessed by end-users via Web Browsers. Cloud offerings can provide substantial benefits including reduced CAPEX investments, rapid deployment, and lower TCO.

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Evaluation Framework

Given the advantages and disadvantage of Cloud ERP Solutions, Companies need to carefully evaluate various options before they zero in on Cloud ERP. It also depends on whether the company is implementing an ERP Solution for the first time or migrating from its current ERP System or extending the system capability to include additional functionality.

Implementation Size and System Complexity are the two major evaluation factors for choosing Cloud ERP Solution.

Implementation Size

Cloud ERP Solutions are typically suited for small to medium companies since the implementation and support costs are relatively low. Large scale Industries might not find Cloud ERPs meeting their Enterprise Requirements.

System Complexity

A large complex SCM Company may find a Cloud ERP system as an unviable solution mainly because of the fact that their complex customized SCM functionalities will be hard to replicate in the cloud. In this case, a business with multiple subsidiaries might keep a centralized, hosted ERP solution to run the enterprise while providing its subsidiaries with a cost efficient cloud-based solution to run their local operations.

Other factors that need to be considered while moving to Cloud ERP are,

  • Delivery model flexibility
  • Ability to use the application on trial
  • Integration with other applications
  • Business process remodeling
  • Security
  • Platform/mobile compatibility
  • Backups and Recovery
  • Upgrades
  • Service level agreements
  • Training and Support
  • Scalability
  • Reference checks with existing customers
  • Vendor viability

Benefits of Cloud ERP Solutions

Cost: The pay-per-use subscription based pricing model is an attractive option for Industries who cannot afford the initial capital expenditure for IT Infrastructure

Scalability: Cloud based providers can scale up their offerings and Cloud partners are responsible for maintaining both the hardware and software which includes upgrades, patches and refreshes.

Flexibility: SaaS based application like Salesforce offer Bolt-on applications for Advanced Analytics, Collaboration, Finance Management Etc.

Rapid Deployment: Cloud based ERP solutions take very minimal time to implement compared to traditional On-premise ERP Systems

Rapid Updates & Upgrades: Cloud based ERP Systems usually get quicker updates than On-premise Systems

Multiple Languages and Currency Support: Cloud ERP Systems let companies expand internationally, something which legacy systems were not built into.

Limitation of Cloud ERP Solutions

Limited Product Suites, Functionality and Availability: So far Cloud ERP systems are engrossed in providing core ERP functionality and they are yet to catch up with the Advanced Custom Functionalities offered by On-premise Solutions.

Security and Data Risks: The risk of sharing Business Critical Data such as company’s financial information and other related data on the cloud poses potential security threats to organizations. Though Cloud Providers like Microsoft, Oracle, SAP have invested heavily on state-of-the-art security, the perceived data risk still looms large in the minds of the decision makers.

Security and Data Risks: The risk of sharing Business Critical Data such as company’s financial information and other related data on the cloud poses potential security threats to organizations. Though Cloud Providers like Microsoft, Oracle, SAP have invested heavily on state-of-the-art security, the perceived data risk still looms large in the minds of the decision makers.

Organization Resistance: Moving ERP to the Cloud will create significant organization disruptions

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