Cloud-Based ERP System – A Road to Business Success  

The cloud is the future of business. Companies that don’t adopt cloud ERP will be left behind.

The cloud-based ERP (Enterprise Resource Planning) market is expected to grow at a compound annual growth rate (CAGR) of 16.2% from 2023 to 2033. Entering a cloud ERP market is a game-changer that offers flexibility and scalability, helping companies boost productivity. This vital tool helps organizations to stay competitive and adapt to market demands. 

According to Statista, the projected global cloud ERP revenue will reach 40.5 billion US dollars by 2025.

Google boss Sundar Pichai says that cloud computing is core to the company’s business. 

It’s clear that adopting cloud ERP is no longer just an option, but it’s a necessity for businesses aiming to achieve success in the digital world. 

So, let’s explore the cloud based ERP solution in detail that helps you in your business decision-making process. 

What is a Cloud-Based ERP System?

A cloud-based ERP system is a type of software that is accessible over the Internet. It allows companies to access their applications at any time and from any location. Its advanced features make it an important ingredient for success in the digital world.

The global cloud ERP market will reach US$ 327,126.8 million by 2033, according to the research report published by Future Market Insights.

Moreover, it is designed to integrate an organization’s business processes, including inventory management, accounting, HR, and purchasing, into a cohesive system. 

What is the Difference Between ERP And Cloud ERP?

The table below provides a clearer understanding of how traditional ERP systems differ from cloud ERP solutions.

Feature	ERP	Cloud ERP
Deployment	Often designed with user experience in mind; more modern interfaces. Easier for users to adapt and learn.	Hosted on cloud servers, accessible via the internet. No need for physical hardware on-site.
Cost	High upfront costs for software licenses and hardware. Ongoing costs for maintenance and upgrades.	Typically a subscription model (monthly or annually). Lower initial costs; pay-as-you-go pricing.
Maintenance	Requires an in-house IT team for updates, patches, and repairs. Maintenance costs can increase over time.	Maintenance is handled by the service provider. Regular automatic updates and support are included.
Accessibility	Access is limited to the local network; it requires a VPN for remote access. Can hinder remote work flexibility.	Cloud-based ERP systems are accessible from anywhere with an internet connection. Supports remote work and mobile access.
Scalability	Scaling requires additional hardware and software purchases. Can be cumbersome and time-consuming.	Easily scalable; can add or remove users/resources as needed. Flexible to adapt to business growth.
Updates	Manual updates can disrupt operations. Businesses must schedule downtime for updates.	Automatic updates with minimal disruption. Always using the latest version of the software.
Customization	Highly customizable to fit specific business needs. Customizations can be costly and time-consuming to implement.	Cloud-based ERP system offers standard modules with limited customization.
Security	Security managed in-house; full control over data. Requires investment in security measures and protocols.	Security is managed by the provider; and relies on their infrastructure. Often includes advanced security features, but control over data is less direct.
Implementation Time	Longer implementation time due to hardware setup and customization. Can take months to years to fully deploy.	Faster implementation, often within weeks or a few months. Reduced complexity due to cloud infrastructure.
Integration	Complex integrations with existing systems may require extensive development.	Easier integration with other cloud services and applications. Often includes APIs for third-party connections.
Compliance	Businesses must ensure compliance with regulations (e.g., GDPR, HIPAA) on their own.	Providers often have built-in compliance measures and shared responsibility for data protection.
Disaster Recovery	Must implement their disaster recovery solutions. Higher risk of data loss without proper systems.	Built-in disaster recovery solutions provided by the vendor. Often includes data backups and redundancy.

Advantages and Disadvantages of Cloud-Based ERP

Why is cloud ERP so popular?

Here are the advantages and disadvantages of a cloud-based ERP system, helping businesses assess whether it aligns with their needs.

Advantages	Disadvantages
Cost-Effective	Ongoing Costs
Lower initial investment due to the subscription model.	Subscription fees can add up over time and might end up being more expensive than the initial costs of on-premises ERP systems.
Scalability	Limited Customization
Easily scalable to accommodate business growth.	Customization options may be limited compared to on-premises solutions.
Accessibility	Dependence on Internet Connectivity
Accessible from anywhere with an internet connection, facilitating remote work.	Requires reliable internet access; downtime affects access to the system.
Automatic Updates	Data Security Concerns
Regular updates are automatically provided by the vendor, ensuring the latest features and security patches.	Data is stored off-site, raising concerns about data breaches and loss of control.
Reduced IT Burden	Vendor Lock-In
Less need for in-house IT resources for maintenance and support, as the vendor manages these aspects.	Switching vendors can be challenging and may involve significant costs and effort.
Quick Implementation	Performance Issues
Faster deployment compared to on-premises solutions, often within weeks.	Performance may vary based on the vendor’s infrastructure and shared resources.
Disaster Recovery	Compliance Challenges
It is one of the main benefits of cloud based ERP systems. Built-in disaster recovery and data backup solutions provided by the vendor.	Ensuring compliance with regulations can be complex, as responsibility is shared with the vendor.
User-Friendly Interface	Integration Challenges
Often designed with a focus on user experience, making it easier for employees to adapt.	Integrating with existing on-premises systems or legacy applications can be more complex.
Collaboration Features	Limited Control Over Updates
Enhanced collaboration tools due to cloud access, improving teamwork across locations.	Users may have limited control over when and how updates occur, which can disrupt workflows.
Environmentally Friendly	Potential Performance Latency
Reduces the need for physical hardware, contributing to lower energy consumption.	May experience latency issues depending on server location and internet speed.

Top Cloud Based ERP Systems 

Here are some of the top cloud-based ERP systems. 

SAP S/4HANA Cloud

SAP S/4HANA Cloud is an ERP solution designed for large enterprises. It uses in-memory computing to provide real-time analytics and improve decision-making processes. 

The platform covers various functions, including finance, supply chain, and manufacturing, and is highly customizable to fit specific business needs. Its scalability makes it suitable for organizations looking to grow, while the extensive ecosystem of SAP partners offers additional support and solutions. 

Pros	Cons
Offers advanced analytics and reporting capabilities for informed decision-making.	Implementation and subscription costs can be significant, especially for small businesses.
Easily scalable to accommodate business growth and changing needs.	The system can be complex to implement and may require specialized knowledge.
Integrates well with other SAP products and third-party applications.	Organizations may face challenges in managing the transition and training users.
Uses cloud technology for flexibility, remote access, and reduced IT overhead.	Some organizations may have concerns about data security and compliance in the cloud.

Oracle NetSuite

It is one of the best cloud-based ERP system examples. Oracle NetSuite is a cloud-based ERP system that integrates financial management, customer relationship management (CRM), inventory, and e-commerce functionalities. It is designed for businesses of all sizes, making it particularly appealing to small and medium-sized enterprises. 

Pros	Cons
Accessible from anywhere, facilitating remote work.	Implementation can be complex and time-consuming, requiring careful planning.
Easily scales to accommodate business growth, making it suitable for various business sizes.	Customization options may be limited.
Integrates well with other Oracle products and third-party applications.	Some users report performance issues during peak usage times.
Regular updates ensure access to the latest features and security enhancements.	Customer support can sometimes be slow or less responsive.

Microsoft Dynamics 365

Microsoft Dynamics 365 combines ERP and CRM features into a single platform, providing a better experience for businesses. It integrates well with other Microsoft products like Office 365 and Power BI, allowing for advanced collaboration and data analysis. 

The modular approach helps companies choose specific applications that suit their needs, whether for finance, operations, or customer service, making it a flexible option for various industries.

Pros	Cons
Allows users to choose specific applications based on their needs, promoting flexibility.	Can be expensive, especially for smaller businesses needing multiple modules.
Offers customization options to tailor the system to specific business processes.	The wide range of features can lead to complexity in setup and management.
Provides advanced analytics tools for data-driven decision-making.	Users may require training to fully use all functionalities.
	Some users report performance slowdowns during high usage.
	Migrating data from legacy systems can be challenging and time-consuming.

Infor CloudSuite

Infor CloudSuite provides industry-specific ERP solutions for various sectors such as manufacturing, healthcare, and retail. Its design prioritizes user experience with a modern interface and advanced analytics abilities. 

Infor’s cloud solution is ideal for companies that want to be innovative and adapt quickly in a competitive market. It helps businesses use the best practices in their industry to stay ahead.

Pros	Cons
Easily scalable to accommodate business growth.	Can be expensive, particularly for smaller businesses.
Regular updates ensure access to the latest features and security.	Implementation can take time and resources.
Offers advanced analytics tools for better management.	Customization options may be limited compared to other platforms.
	Some users report challenges integrating with third-party applications.

Odoo

Odoo is an open-source ERP platform that provides a wide range of integrated applications, including finance, inventory, and project management. Its highly customizable nature allows businesses to tailor the system to their unique requirements. Odoo is the best cloud-based ERP for small to mid-sized businesses.

Odoo’s modular approach allows companies to start with essential features and expand as their needs grow, providing flexibility and cost efficiency.

Pros	Cons
Highly customizable due to its open-source nature.	Customizing can be complex and may require technical expertise.
Offers a diverse suite of applications for various business needs, including CRM, inventory, and accounting.	Some applications may have a less polished interface.
More affordable than many other ERP systems, with flexible pricing options.
Strong community support with resources, forums, and third-party developers offering assistance.
Available in both cloud-based and on-premise versions, providing flexibility.

How to Choose the Right Cloud ERP Software?

Below are some tips to help you choose the right cloud based ERP software. 

• First, you have to identify your business requirements and make sure the software has the features and capabilities that meet your business needs. 
• Always choose a solution that can easily integrate with your existing systems.
• Choose a solution that can scale with your business as it grows. 
• Compare the costs of different providers and choose the one that offers the best price with other features. 
• Make sure the vendor has a track record of providing the best services and a good reputation in the market.  

Conclusion

A cloud-based ERP system is a powerful technology to help you grow your business. It improves your business operations and helps your team to work smarter and make data-driven decisions. Implementing a cloud ERP is essential for driving growth and positioning your business for long-term success. 

If you’re currently looking to adopt a new ERP system or replace an outdated solution, you can schedule a meeting with us. Our experienced team will help you and take your business to the next level with the power of the cloud. 

FAQs

1. Is cloud ERP the future?

Yes, cloud ERP is rapidly becoming vital for businesses looking to enhance efficiency and flexibility. Here are a few reasons why it’s seen as the future.

• Scalability
• Cost-Effectiveness
• Accessibility
• Real-time data
• Integration

2. Is SAP ERP cloud-based?

Yes, SAP offers cloud-based ERP solutions. SAP’s primary cloud ERP product is SAP S/4HANA Cloud, which provides businesses with functionalities for finance, supply chain, procurement, and more. They are all accessible via the cloud.

3. Why move to cloud ERP?

Below are some reasons to show why moving to cloud ERP is important.

• Accessibility
• Scalability 
• Reduces the demand for internal IT resources
• Flexibility