What is Cloud ERP (Enterprise Resource Planning)?

Cloud ERP

Cloud ERP is a kind of enterprise resource planning (ERP) software that is hosted in a cloud-computer based platform, as opposed to on-premise, which is housed within its enterprise data center. Enterprise resource planning (ERP) is an industrial term that describes the set of activities that helps an organization to control the various parts of its business like purchasing, inventory management, customer relationship management, and many more. ERP cloud applications also comprise other different modules, such as finance, human capital management, among other aspects of the business.

Cloud ERP software makes it possible for companies to access ERP cloud software over the internet. Cloud ERP is advanced software that is very beneficial to the users since it has slightly lower upfront costs. This is because leasing the computing resources is done on a monthly basis as opposed to purchasing in full, and maintenance is done within the premises. This software also grants companies access to their business-critical applications with no time limitations as well as location.

Although the organizations operating today are different, they all encounter similar challenges, and they need access to technology that will help them innovate and grow within a short period of time to compete favorably in today’s business environment. Nowadays, increased business demand, worldwide connectivity, and software tools and systems that are updated regularly allow organizations to direct more of their energy and time to enact growth initiatives with less time on IT management. This is where cloud ERP seems vital.

Most businesses, irrespective of their size, are opting for cloud ERP as technology keeps on evolving. This is triggered by factors, such as cost, reliability, speed and accessibility.


There are several enterprise resource planning (ERP) options currently available on the market. Nowadays, it’s very difficult for a company to choose an ERP cloud that is ideal for its operations. Every enterprise is in search of an enterprise resource planning (ERP) that will fit well with their demands. Before you start to explore the functionality and specific features of a particular software package, it’s essential to make a decision on the type of ERP cloud that is well-suited to the demands of your business. There are two options for ERP cloud: on-premise and cloud. Each of these software has its own advantages and disadvantages but, in general, the advantages of cloud ERP far outweigh its disadvantages.



Every organization has an active internal IT department. Most of the IT departments are very busy, and it’s rare to find an organization where the IT experts are idle. The majority of organizations lack the bandwidth to handle an ERP cloud on top of their daily tasks. The IT staff in organizations that rely on on-premises ERP spend more of their time on maintenance, updates, and repairs, which is a requirement for all the on-premises ERP systems. Nevertheless, cloud ERP is hosted on a cloud computing platform where maintenance is not done by the users as it is automatic. This frees up the IT resources for the company, which could be used in maintenance and updates, and now they can be directed to other projects that are beneficial to the company.


Companies in growth mode demand an advanced system to cater to their business needs and demands. Such businesses have to do away with their current systems and adopt more advanced ones. One of the reasons why businesses are shifting from on-premise to cloud ERP is due to its ability to scale up or down, based on the demands of the company. An on-premise system is a labor and time-intensive process to scale capabilities. Cloud-based ERP allows the users to move to a larger, affordable and more capable system with no limitations. In addition, if you realize that your needs are seasonal or downward; it is possible to scale back capabilities.


ERP is usually the central point where the company data and information is stored. Security is a very important component to the success of any business. Data security can be a great challenger despite where your data resides. Cloud ERP provides an additional level of security. The security of the system is not only monitored by your IT team but also the cloud service vendor. This does not provide assurance that your system is against attack, but it adds an extra level of security.


Implementing an ERP is not an easy task, and it is expensive. With cloud-based ERP, such issues can be addressed with minimal ease and in an affordable manner. When you opt for ERP, the vendor will help you in the planning, customization, and implementation of your system. This will speed up the implementation process, resulting in reasonable company investment in terms of time and resources.

Service Support

Because the ERP is a subscription-based model, service support is available 24-hours, 7 days a week for any concerns which may arise. With on-premise ERP, you will be required to purchase an additional support package. The cloud-based ERP service allows its subscribers to access the support at any time of the day.

Better Decision Making

Cloud ERP software is no different from having access to real-time analytics. This software has a user-friendly interface that is simple to understand and is also clutter-free. This can help you to make better and informed decisions pertaining to your company. ERP has spreadsheets, charts as well as graphs, which can be accessed with a click of a button. This can help you to make important decisions that will smooth the running of your business.

Cloud ERP vs. On-Premise ERP

Both cloud and on-premise enterprise resource planning (ERP) are meant to enhance the operations of the business or organization. On-premise enterprise resource planning (ERP) is housed on the servers and computers belonging to the organization. Cloud ERP is hosted on clouds, and the servers are leased by the vendors. A web browser is required to access the cloud ERP software. The cloud and on-premise enterprise resource tend to differ in different business aspects.

Cost and time

On-premise ERP solutions demand huge investment upfront to acquire and maintain the software. For instance, if your company has no IT team in place, you will need to employ the right personnel to manage the system prior to its deployment.

On-premise ERP can be viewed as capital expenditure. The deployment and the setting up of the on-premise system is a process that demands a lot of time and is very costly.

Cloud ERP systems are already in place and hosted on the cloud. The subscribers are required to pay the subscription fee involving costs related to hardware and software. In normal circumstances, the cost involved in cloud-based ERP is slightly lower when compared to on-premise ERP in a matter of time.

Cloud ERP can be viewed as operating expenditure because you only pay for the service when you use it. The time used in the deployment of the cloud-based ERP system is less when compared to on-premise ERP systems.

Customization and mobile accessibility

Before settling on purchasing the ERP system, you need to consider customization and access to mobile. On-premise ERP systems offer a higher level of customization. The processes involved in the customization of on-premise ERP are lengthy, and this may impede the implementation process. When the vendor is frequently unveiling the latest software updates and improvements, you may not be able to use some of the system modules.

For cloud-based ERP systems, customization is done by the Value Added Reseller (VAR) based on the demands of the company. You don’t have to update the cloud system because updates are done automatically.

Data security and control

In on-premise ERP, the organization holds data security and has total control over it. The only challenge is that data may be vulnerable, especially if the organization does not implement adept data security principles.

When it comes to the ERP system, data is held on the cloud vendor. To enhance the security of data, companies implement data encryption techniques. The cloud vendor is responsible for all the updates and ensures the environment you’re working on is secure.

How to choose ERP vendors that suit your business requirements

Cloud ERP systems are very advantageous to business and organizations. Some of the reasons why businesses are opting for ERP vendors include:

Automatic updates-there is no disruption of business, and there is less cost involved in upgrading projects.
Consider the following factors when evaluating cloud ERP vendors.

Cloud ERP Reliability

Ensure the provider you choose offers 24/7 system status data.

Cloud ERP Security

Service level guarantee. Only opt for service vendors who provide a high level of disaster recovery and provide quick response to issues which may arise.

Cloud ERP Conclusion

  • Cloud enterprise resource planning (ERP) is a software that is meant to enhance business operations.
  • ERP can be classified into two options: on-premise and cloud ERP.
  • Cloud ERP is ideal for businesses that are expanding and require an additional level of data security.
  • Cloud ERP is cost-effective when compared to on-premise because maintenance and updates are done by the vendor as opposed to on-premise, where update and maintenance are done by the organization.
  • There are several factors you need to consider when choosing the ERP vendors, such as reliability, security, and the service level guarantee.

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