Cloud ERP System: What It Is, Types & Benefits

A cloud ERP system runs core business operations – finance, supply chain, inventory, and human resources – on secure remote servers instead of in-house hardware, delivered as a Software-as-a-Service (SaaS) subscription. You pay monthly or annually, log in from a browser on any device, and the vendor handles hosting, maintenance, security, and upgrades, so there is no server room to buy or patch. This guide explains how cloud ERP works, how it differs from on-premise ERP, the deployment types, benefits, challenges, and the steps to migrate.

How does it work?

Cloud ERP have a mixture of technologies that connect to speedy internet networks. These solutions stay online throughout, and the vendor updates their security. Customers using sap cloud ERP or any other should only login in and use the data stored in their software. The ERP cost of ownership is small for the customer. Cloud Enterprise Resource Planning software is accessible on desktop PCs and mobile devices. This characteristic makes them more dependable than on premise ERP software because it is only accessible on the company s in-house servers. Cloud-based ERP solutions entail various functions, including sales histories, customer relations, supply chain, human capital, etc. They are scalable, versatile, profitable, and cost-friendly.

What is the difference between ERP and Cloud ERP?

Cloud ERP and on-premise ERP deliver the same core functions; what differs is where the software runs and who manages it. On-premise ERP runs on servers at your own facility: your IT team installs, secures, backs up, and upgrades it, and you pay upfront for licenses and hardware.

Cloud ERP runs on the vendor’s platform: setup is faster, upfront cost is lower, and maintenance, security, and upgrades are carried by the vendor as part of the subscription. Some vendors, including Ximple, offer both deployments on the same platform, so the choice is about control and compliance, not features.

Cloud ERP concepts

Understanding the basic cloud ERP concepts is essential. These concepts are the key terminologies you will encounter when researching enterprise resource planning software. They include the following:

• Cloud-based ERP is software that lives in the vendor s internet-based servers.
• On-premise ERP – It refers to an on-premise software system accessible on a desktop computer.
• Deployment strategy – A deployment strategy describes the server location and the ERP implementation process. It can either be on-premise or cloud-hosted servers.
• Hosted ERP is a hosted deployment model for when a company decides to outsource IT services. Hence, a hosted ERP system is not an actual SaaS model.
• End-to-end security is the robust encrypted network between the ERP vendor and the users.
• Subscription licensing This refers to the fixed fee companies pay to access the ERP on the cloud. They can pay a monthly fee or an annual fee. A vendor can charge a subscription licensing fee to an individual user or a company.

Types of Cloud ERP software

Cloud ERP systems are not all built the same way. Before you choose one, whether Ximple cloud ERP for distributors or another platform, know which deployment type you are buying. The types include:

• Multi-tenant SaaS ERP  In this SaaS-based ERP, multiple companies share the same servers. However, each company can access only its data. A multi-tenant SaaS is the most genuine cloud based systems.
• Single-tenant SaaS   A single-tenant SaaS ERP solution is a version for only one company. Hence, its data stays on a private server, although some providers can allow sharing. 
• Public cloud  Examples of a public cloud is Google Cloud, Oracle Cloud, AWS Cloud, or Microsoft s Azure.It belongs to a cloud computing vendor who provides it to many companies for sharing. Still, each organization s data stays private and accessible only to its authorized staff.
• Hybrid ERP  A hybrid ERP consists of on-premise software connected to a private or public cloud.
• Private cloud  A private cloud service is confidential. No other organization can use it.

Read full article: Types of Cloud ERP

Benefits of Cloud Based Software

Cloud ERP benefits are the reason many small and medium-sized businesses want to acquire it. They include the following:

• Cloud Enterprise Resource Planning software is agile: It is ideal for industry-specific companies that want to expand. The best cloud-based manufacturing ERP can help them grab new growth opportunities while overcoming threats.
• Cloud-based ERPs improve cash flow visibility: Businesses of all sizes must regularly monitor their cash flows to stay afloat. Cash flow management is easier with an internet-based ERP software system as it provides real-time data for increased visibility.
• Easy to add bolt-on software solutions: Cloud solutions are agile, scalable, and easy to integrate with other vital applications.
• Easy to upgrade: Since ERP vendors manage all system upgrades, customers do not have to worry about changing business needs and evolving technologies. Software updates are easy and quick to install, and customers can process them even during non-business hours. They can happen without disrupting business processes.

Cloud Based Software Challenges

Is a cloud-based ERP system free from challenges? No, like legacy ERP, the cloud system has its challenges. These challenges entail the following:

• Shifting from an on-premise ERP system to a cloud one is laborious and costly for large-scale businesses with a lot of data.
• Stakeholders of a large-scale business using a legacy ERP may not support the idea of shifting to the cloud. The IT workers may fear losing power over different processes because the online ERP vendor manages and maintains the software.
• Some organizations must abide by stern cyber security measures, government regulations, HIPAA, and other policies. Therefore, these companies may not receive all the advantages of cloud-based ERP.

Successful steps to migrate to Cloud ERP

• Planning This step has many activities, including identifying the reasons for the shift. It would help if you also chose the correct
  ERP assessment approach.
• Comprehend the migration process Review the applications you want to keep in the cloud, the cost of ownership, select the cloud ERP services provider, and so on.
• Data migration Your team will use tools like Azure, Google Cloud, or AWS to transfer data without interrupting processes relying on it.
• Data optimization The team must enhance data security and integrity for easier retrieval.

Cloud ERP for Wholesale Distributors

For wholesale distributors, a cloud ERP connects inventory, purchasing, warehouse operations, and financials into one real-time system built for the flow of physical goods. When you evaluate options, look for three things a generic cloud ERP rarely covers out of the box:

• Real-time inventory control – committed, in-transit, and available stock across every warehouse and branch.
• Distribution pricing and margin management – customer-specific price sheets, volume contracts, and vendor rebates.
• EDI and B2B portal integration – orders flowing from your customer portal, webstore, and trading partners straight into the ERP.

Ximple ERP is a cloud ERP built specifically for wholesale distribution, with these workflows native to the platform and both cloud and on-premises deployment on the same system. See the full picture on our wholesale distribution ERP software page, or, if you run a legacy system today, start with our Epicor Prophet 21 alternative guide.