What is Cloud ERP?
Cloud ERP is an Enterprise Resource Planning (ERP) system that operates on a cloud platform instead of an on-premise network, allowing organizations to access the software via the internet.
Cloud ERP—A new ERP delivery model
Software-as-a-service (SaaS)
Embrace the cloud, particularly the software-as-a-service (SaaS) delivery model for ERP. In this approach, ERP software operates on a network of remote servers in the cloud rather than within the confines of a company’s server room. The cloud provider takes charge of patching, managing, and updating the software multiple times a year, eliminating the need for costly upgrades every 5 to 10 years, as is typical with on-premises systems. By leveraging the cloud, both operational expenses (OpEx) and capital expenses (CapEx) can be reduced, as it obviates the requirement for companies to invest in software, hardware, or additional IT personnel. These resources can then be redirected towards pursuing new business opportunities, ensuring the organization remains constantly updated with the latest ERP software. Consequently, employees can shift their focus from IT management to more value-added tasks such as innovation and fostering growth.
What is SaaS ERP?
Enterprise resource planning (ERP) systems serve as the backbone for numerous organizations, aiding in the management of accounting, procurement processes, projects, and more across the entire enterprise. Traditionally, implementing ERP systems has often entailed large, expensive, and time-consuming deployments, often requiring substantial investments in hardware or infrastructure. The emergence of cloud computing and software-as-a-service (SaaS) deployments is ushering in a shift in how businesses approach ERP. Shifting ERP to the cloud enables businesses to streamline their technology needs and achieve a quicker return on investment.
Cloud ERP solutions are mature offerings that provide the same features and functionality as their on-premises counterparts. Moreover, the cloud deployment model facilitates seamless integration with other critical technologies, including mobility, decision support systems, collaboration, and social systems. Cloud services are gaining popularity among leading businesses seeking modern functionality without the burden of managing IT infrastructure, maintenance, and upgrades. To ensure the success of a SaaS ERP system, leveraging integrated suites and cloud platforms with industry-leading high performance, scalability, unparalleled reliability, and enhanced security is crucial.
Software as a Service (SaaS) allows users to subscribe to and use application software in the cloud instead of investing in hardware or licensing the software. By purchasing this software through a cloud provider on a monthly subscription basis, the service is delivered over the internet. A contemporary cloud suite offers comprehensive software for the entire business, allowing organizations to subscribe to specific SaaS applications tailored to their finance, supply chain, human resources, customer experience, sales, and marketing needs.
What is SaaS?
Software as a Service (SaaS) allows users to subscribe to and use application software in the cloud rather than having to buy the hardware or license the software. You simply purchase this software from a cloud provider for a monthly subscription fee and the service is delivered to you over the internet. A modern cloud suite provides complete software for your entire business so that you can subscribe to certain SaaS applications for your finance, supply chain, human resources, customer experience, sales, and marketing organizations.
7 Reasons to move to an ERP cloud solution
For businesses of various sizes, ranging from enterprises to small and midsize entities, making a complete transition from on-premises systems to the cloud all at once is often impractical. It might not be something they are comfortable executing within a short development window. On the other hand, persisting with an on-premises ERP and disregarding the benefits offered by cloud-based enterprise resource planning is no longer an ideal course of action. Why should you contemplate utilizing cloud applications to either replace or complement your existing on-premises system?
Next-generation technologies, like artificial intelligence (AI), help cloud-based systems rapidly improve their capabilities with no need for periodic updates, unlike your legacy system. Now, with no additional or new input from the end-user, ERP systems continually become significantly easier to manage and use.
Augmenting and integrating legacy software with cloud applications can complement, enhance, and supplement important tasks. This approach can breathe new life into legacy ERP systems, giving businesses a great opportunity to start adopting cloud capabilities.
Finding cloud applications that complement your legacy ERP software modules lets you immediately take advantage of rapidly advancing new technologies and improving user paradigms. These provide complimentary systems that deliver immediate business capabilities and value without a fundamental change in your operations.
Reporting and analytics for legacy systems typically require involvement from a third-party vendor to generate operational business intelligence. Using cloud applications from your legacy ERP vendor often produces the same or better intelligence without needing an additional vendor relationship.
Legacy systems were never meant to be modern reporting engines. Cloud-based technology was born in the last decade and developed, as a core principle, with an entirely different mindset and understanding of not only what was possible but what was needed to be successful for ERP platforms.
Cloud solution service providers have large, full-time teams that are exclusively dedicated to proactively monitoring and staying current with cloud security issues and threats, 24 hours a day.
The next generation of young workers have grown up with seamless technology that is mobile, easy to use, and always-on. No company that continues to rely purely with on-premises technology will be able to recruit top talent, regardless of age.
6 Benefits of SaaS ERP versus on-premises ERP
Most financial management systems do a good job of providing dynamic visibility into enterprise data. In the last century, ERP software excelled at capturing very large sets of business data, but had difficulty producing reports. That was then.
Today’s organizations want the ability to put their financial data to use to improve profitability, streamline operations, and improve decision-making. In recent years, capabilities for reporting and other data output and monitoring have become much more important to organizations. Reporting requirements for financial management systems have rapidly evolved to keep pace with that demand.
At a minimum, all companies need reports that cover month-end close, quarter close, and annual close, along with basic financial statements for income, expenses, and balances. While these outputs were always available, it wasn’t easy to adjust these reports or add derivations for other needs.
In our fast-paced business environment, the ability to generate prebuilt reports as well as easily create ad-hoc outputs, isn’t just something that’s nice to have—it’s a critical requirement for financial management systems software. Add in requirements for in-depth data analysis, information visualization, more operational visibility, and narrative reports, and companies quickly discover that their ERP software solutions need to easily work with advanced reporting systems like enterprise performance management (EPM) solutions.
From its inception, the SaaS model was designed to deliver a core set of business benefits versus traditional, on-premises ERP solutions. These modern business benefits include:
Lower upfront costs
- Eliminate need for additional hardware and middleware
- Reduce installation and implementation costs
Predictable, ongoing costs
- Eliminate unpredictable costs of managing, patching, and updating software and hardware
- Turn capital expenses into pay-as-you-go operational expenses
- Focus on functional costs instead of technical costs
On-demand scalability
- Scale instantly to meet growing data or transactional demands
- Reduce disruptions while maintaining service levels
Faster time to value
- Implement new functionality immediately
- Reduce costs with less required IT support than with traditional, on-premises implementations
Increased innovation
- Easily access support, analytics, and collaboration tools with standardized functionality
Support for globalization strategies
- Gain increased transparency and insight into profitability and cost across the business with standardized processes
- Improved collaboration between finance resources in different countries