The days when we stored all our data exclusively on physical media are slowly becoming a thing of the past. We increasingly rely on accessing data in the so-called “cloud,” both in our private lives and in business. Implementing entire ERP systems in this model seems like a natural next step. In the article below, we explain what drives entrepreneurs to make this decision and what constitutes a well-functioning cloud-based ERP system. How do cloud ERP systems work?
Enterprise Resource Planning (ERP) systems enable effective data management within a company. These systems integrate data from various departments, providing a more complete picture of our business situation. Typically, ERP systems operated in an “on-premise” model, meaning companies relying on them had to own the infrastructure to support them. For some time now, however, cloud-based ERP systems have been increasingly chosen. Cloud computing is a data processing model based on infrastructure that functions via a network connection. Users can draw from resources located on an external server without the need to physically own such IT infrastructure. All that is needed for convenient data access is an internet connection. In short, cloud ERP systems operate on infrastructure provided by a vendor, so the company gains access to the service without having to build its own server room or purchase licenses.
The cloud is the future – implementing a cloud ERP system
The cloud is a modern approach to data storage that is enjoying growing popularity in our private lives as well as in the daily operations of companies. It is a solution with a relatively affordable cost, and the convenience it offers contributes to its continuous rise in popularity.
A report prepared by Panorama Consulting Group in 2020 indicated that over 60% of companies deciding to implement ERP systems choose the cloud model. Small and medium-sized enterprises particularly feel the benefits of such an implementation, as using cloud technology means they can forgo the costs of investing in their own infrastructure. Larger companies that already possess their own digital facilities are also showing interest in this technology, although more often in a hybrid model. At this pace of development, it is worth keeping up with the competition and taking a closer look at the factors influencing this trend.
Key benefits of implementing a cloud ERP system
The advantages of cloud ERP are quite numerous. The most frequently cited is that cloud ERP can be used at any time and from any place. This data accessibility proved particularly crucial during the outbreak of the coronavirus pandemic. By definition, cloud ERP is a very good solution for remote work and ensures business continuity. However, it is not just the possibility of remote work that speaks in favor of this model. Even outside of a pandemic, many companies rely on the collaboration of international teams. Thanks to the use of cloud ERP, colleagues in multiple locations have access to data in real-time. The aforementioned lower costs of implementing a cloud ERP system are also significant, especially from the perspective of smaller enterprises. Thanks to lower entry costs, smaller companies can benefit from systems without having to build IT structures from scratch. Of course, the convenience of using cloud-based ERP systems is not limited to accessibility. Updates are performed by the provider, so entrepreneurs do not have to worry about whether their software version is compliant with the law. Preparing for updates is less burdensome for entrepreneurs, allowing them to run their business more efficiently. Also, the launch time for a cloud ERP can be faster than for a classic ERP based on local servers. Providers often offer 24/7 technical support, which can mean that potential problems are resolved faster than if you were relying solely on an internal IT team. A local IT team can instead devote more time to helping users rather than maintaining infrastructure. It is also worth remembering that cloud ERP systems carry huge potential for automation. Automations not only improve work comfort but also reduce the risk of human error and process costs. You can read more about automation technologies that have the greatest impact on the development of digital businesses
here.
Key features of a good cloud ERP system
A good cloud ERP system is characterized primarily by flexibility. Today, the market changes much more frequently and dynamically than it did a few years ago. For this reason, we should ensure that our ERP system is adapted to implement the automations we need or to introduce other changes. Secondly, an ERP system should be accessible to all employees. This allows every department of the company to function more efficiently, as data exchange will occur across all parts of the business. For this reason, the use of cloud-based technology improves data accessibility for employees, as it is always at their fingertips. Thirdly, the availability of data for all employees is linked to the possibility of interaction between users in the system through the introduction of workflows. This allows users to better understand data and supplement it as needed. When everything happens in the cloud, these interactions occur in real-time and are easily accessible to employees. Additionally, using a cloud ERP system with an intuitive interface will reduce the need for complex training, making work more comfortable.
Cloud ERP systems and data security
The most common concern that stops entrepreneurs from implementing their systems in the cloud is related to data security. However, these concerns often stem from a lack of broader knowledge about how Cloud ERP works. It is worth noting that data in the cloud is encrypted, and all movements within the system are monitored. The provider is responsible for security, as it is a priority for them and a testament to the quality of their service. Furthermore, data in the cloud has backups, making it less vulnerable to loss due to physical damage, such as a fire. Therefore, as a rule, implementing cloud ERP ensures high data security. Of course, when implementing a system, it is worth paying attention to choosing the right provider and drafting appropriate agreements.
Maintenance costs of cloud ERP systems
As we mentioned, the costs of implementing a system in the cloud are much lower than building your own infrastructure from scratch. It is worth adding that, in addition to the high initial implementation cost, there is no additional cost for modernizing and servicing infrastructure or the cost of electricity it consumes. Furthermore, the cost incurred for leasing a cloud environment for an ERP system does not require accounting for server depreciation, as would be the case if you purchased a server room for yourself. When we do not have to invest in expanding our own infrastructure in the company, we can allocate more of our funds to the actual operational part of the business. The actual cost to be expected is based on a subscription fee or pay-per-use model and depends on the needs of the given enterprise. Cloud ERP systems offer high scalability, which has a clear impact on costs and is particularly beneficial for companies whose operations are seasonal, as they only pay for the resources actually used.
How to choose a cloud ERP system?
When choosing a cloud ERP system, it is worth clearly defining your expectations and requirements. These will vary depending on the size of the company and the nature of its operations. Selecting modules is therefore one of the important decisions. Of course, the chosen program should be compatible with the systems already used in the enterprise. At
Mindbox, we provide our clients with access to these technologies and advise on how to properly utilize them by designing unique solutions. We encourage you to check out our
offer regarding the installation and operation of ERP systems on our website.
