When it comes to getting access to business-critical applications at any time and from anywhere, cloud ERP software remains useful for modern enterprises. The software is based on cloud technology that enables users to access applications via the Internet. In this article, we will understand cloud ERP software from scratch and go through its significant benefits for small and mid-sized businesses. Let’s start with the introduction.
What is Cloud ERP Software?
Cloud ERP Software is a type of SaaS (Software as a Service), which is based on cloud computing and allows users to access Enterprise Resource Planning (ERP) software through the Internet. Cloud-based ERP software has much lower upfront costs as compared to traditional ERP software. It is because users need not purchase computing resources outright. They can simply lease them on a monthly or yearly basis.
Another benefit of the cloud-based ERP software is there is no need to maintain these resources on-premises. Cloud ERP vendors maintain these resources and make sure that they can provide their customers with advanced cloud ERP systems. Cloud-based solutions are particularly useful for small and mid-sized businesses (SMBs). Even startups can get the benefits of cloud ERP solutions without spending a small fortune.
Do You Know?
40% of companies identified better functionality as their primary reason for implementing an ERP system.
ERP systems are an important investment and should be a top priority, according to 53% of IT decision-makers in a recent survey. On average, 26% of workers use their company’s ERP software.
How Does Cloud ERP Work?
A reputed research firm IDC has mentioned that the demand for cloud-based ERP systems continues to grow because these systems can access and analyze a huge amount of business data in near real-time. Be it getting inventory insights or accessing financial data for auditing, cloud-based ERP solutions are ready to assist your company irrespective of its size and scale. Here is how the Cloud ERP solution works.
The cloud-based ERP software can integrate data from disparate systems and then share the data while creating opportunities related to value creation for modern businesses. It can also increase the efficiency and connectivity by managing your company's resources for creating optimized solutions.
Cloud-based solutions for ERP are managed by third-party vendors and they remain connected to the cloud platform. These solutions can be accessed through local devices including laptop, phone, tablet, etc.to provide users with secure and accurate data in real-time.
Various companies across different industry sectors can leverage the benefits of cloud ERP software. The key functionality of Cloud-powered ERPs is the ability to access sales histories, financial data, supply chain status, etc. You can connect this ERP to any computer system of your company. Also, depending on your business requirements, you can opt for a specific type of cloud ERP software.
Different Types of Cloud ERP Software
Third-party providers or ERP vendors host the ERP solutions in their data center and their customers can use these solutions using the Internet. However, it is necessary for you to ask Cloud ERP providers for the types of cloud platforms. Mainly, Cloud ERP software is based on three types. They are-
Private Cloud ERP
It is a single instance of the ERP solution that runs on a private cloud infrastructure. Here the underlying infrastructure is ‘hosted’ by the third-party vendors and cannot be shared like a single tenant SaaS. The private cloud offers key benefits of cloud including high scalability and subscription pricing as per the business needs. Also, users may have some control over IT decisions and operations. A private cloud ERP can be run entirely on the premises of an enterprise with its cloud infrastructure.
Single-tenant SaaS ERP
It facilitates every user to get their own slice of the ERP software. Here, the software runs on the cloud provider’s platform but the customers can get flexible computing power and the advantage of subscription-based pricing. However, the data and ERP system are cordoned off from other customers or users. This type of ERP solution is costlier than multi-tenant SaaS ERP and cheaper than private cloud ERP. Companies can opt for this model for maintaining privacy and security in line with the legal requirements of countries where they have operations.
Multi-tenant SaaS ERP
This is the simplest and highly cost-effective model of cloud computing. It runs on the purest form of cloud and has the fewest modules. Usually, multi-tenant SaaS ERP has little to no customizability but it is highly cost-effective for startups and small businesses. Easy deployment and minimum expenses make the multi-tenant SaaS ERP module popular in the corporate world.
After going through the types, it would be interesting to see the difference between cloud ERP and on-premise ERP.
Cloud ERP vs On-Premise ERP : Comparison
Many entrepreneurs, CTOs, and COOs ask this question- if cloud-based ERP and on-premises ERP systems have similar functionality then what are the points of difference between them? Let’s find out the answer to this question by differentiating them across various factors.
|Factor||On-Premise ERP||Cloud-based ERP|
|Cost||It requires additional investment in server and hardware to install the application||No big investment is required on infrastructure as you need to pay the subscription fees only|
|Accessibility||You cannot access the data from anywhere||You can access the corporate data from anywhere, anytime|
|Data Security||It depends upon the efficiency of in-house IT department||Cloud ERP service providers have cutting-edge tools for enhanced security|
|Scalability||It is necessary to increase the hardware count for handling more processes||Cloud-based ERP software can efficiently meet the increasing requirements|
|Deployment||It may take more time||It takes less time as compared to on-premise ERP.|
|Maintenance & Upgrade||It needs a dedicated IT team for maintenance and upgrade||The service provider takes care of its maintenance and upgrading|
Components of Cloud ERP Software
Customized cloud ERP solution has many innovative and enterprise-friendly features. It covers all the departments of your company. Here are the top six components you should look for in cloud-based ERP software.
1. Human Resources(HR)
This component takes care of the full spectrum of employee management ranging from onboarding to offboarding. It is beneficial for HRD in managing the workforce and timekeeping. Payroll software is one of the biggest features in the HR component. It automates the salary process while handling tax deductions and benefits inclusions.
2. Business Intelligence (BI)
Though this is a relatively new component of the cloud-powered ERP solution, it becomes quite popular in the current competitive business scenario. It assists companies in driving decision-making processes. This component can collect and analyze corporate data to provide users with actionable insights in real time.
3. Supply Chain Management (SCM)
The SCM component is one of the most useful components of the ERP solution. It is because it helps companies manage the supply chain effectively. It not only optimizes the supply chain of your company but also assists different departments to manage inventory and orders. The supply chain management component makes predictive analytics possible with real-time data.
4. Inventory Management
This component works along with the SCM component. It plays a vital role in the sales and warehousing departments in managing inventory. The main purpose of both inventory management and supply chain management component is to manage order fulfillment and stock maintenance in the warehouse.
5. Customer Relationship Management (CRM)
The CRM component is useful for keeping track of all customers and lead data within the ERP solution. As a result, you can optimize marketing and sales efforts to gain the desired outcome. The CRM component can track the buyer’s history so that you can suggest additional purchases to your customers through cross-selling or upselling.
6. Financial Management
It deals with data collected from all other components of the ERP software. As every business process involves money in any form, the financial management component is necessary. It stores and analyzes all the financial data including accounts payable, budgets, accounts receivables, forecasts, and the like. All these components and several other components can assist your company to leverage the benefits of Cloud-based ERP software. Here are some of the top benefits of Cloud ERPs.
Benefits of Cloud ERP Software
The ERP software has a massive architecture that contributes to increasing productivity while improving collaboration among all departments. Here are the top benefits of ERP software.
Decentralization is not good when it comes to the flow of business information. It fails to give the whole picture of business processes at any given point. It can impact the growth prospects of your company. The ERP system, on the other hand, brings centralization in data collection and analysis. You can keep all the employees across different teams on the same page using the ERP solution.
Every enterprise has to deal with several types of data every day. Be it inventory or finance, consumers or employees, it is necessary to store and manage data effectively to get actionable insights in real time. Advanced ERP systems like SAP cloud ERP can integrate into any database and platform. Also, you can avoid data duplication and reduce the database maintenance costs with the help of a feature-rich ERP software.
ERP solution is highly customizable and adaptable in line with ever-changing business requirements. Another benefit of the cloud-powered ERP system is it is customizable irrespective of the databases and operating systems. Also, this system can be implemented in a modular fashion, and as a result, your company does not need to pay huge upfront costs for the customization.
This is one of the biggest benefits of a robust cloud-based ERP solution. It gives a rich and user-friendly experience to all stakeholders including programmers, managers, C-suite executives, and decision makers. Even the most junior employee can access to the corporate data with ease based on permissions and authority. User-friendliness makes the ERP solution highly beneficial for the entire organization.
Cloud and Mobility Benefits
Cloud service providers ensure that your company can get the full advantage of the ERP solution. You can keep the critical data secure in their servers while getting work done or accessing the data from anywhere. What’s more, SaaS and PaaS (Platform as a Service) models of the cloud have reduced implementation time significantly in the traditional business models.
The ERP solution offers complete insights of customer behavior including the customer’s feedback, buying habits, after sales, etc. When the ERP is integrated with CRM, a customer who calls the help desk or a support center can get the necessary information using their fingertips. CRM integration can give customers access to the inventory, delivery date, order details, etc.
Increased Cross-Department Efficiency
ERP can act as a bridge between all the departments in your company. It improves inventory control, resource management, and supply chain management. ERP collects the data from sales, finance, and other departments and makes the data analytics more effective to increase the overall productivity and efficiency.
ERP implementation is known for offering a high ROI in a short time. An official survey has revealed that companies that focus on ROI can get significant results after a year. These results could be in the form of reduction in operational costs, improvement in customer satisfaction, and higher customer satisfaction. SAP cloud ERP and other ERP solutions can start yielding high ROI in relatively short duration.
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Cloud-based ERP is Suitable for Small Businesses?
We will start with the prevalent notion- ERP solutions are for large-scale enterprises only. This is not reality these days as technology has evolved to make ERP solutions ready to help SMBs and even startups. Though ERPs were first developed to meet the necessities of large companies, today, it can help small and mid-sized enterprises to grow by streamlining processes and handling data.
SMBs utilize ERP software to improve their communication across various departments and optimize processes with higher visibility. What's more, ERP solutions are useful in combining financial and customer-related information into the system for improving customer experiences. We can mention many reasons why small businesses need cloud-based ERP solutions. Some of these reasons include-
Brings Accountability and Transparency
The ERP system offers a centralized database to all departments. You can monitor activities of various departments on the same dashboard at once. As a result, the business processes become more transparent and employee accountability increases.
Facilitates Data-Driven Decisions
The ERP system can provide users with real-time data consistently. An advanced ERP solution collects and analyzes huge amounts of corporate data and comes up with actionable insights instantly thereby facilitating meaningful decisions.
Increases Efficiency and Productivity
A feature-rich ERP system can increase efficiency and productivity by assisting the company in automating time-consuming and routine tasks. Also, the ERP system can handle multiple tasks at once to make resources free for other productive activities.
Monitors Business Performance
As the ERP solution offers centralized information about every process, you can monitor business performance with ease. A dashboard shows all the reports and activities in real-time to give you a clear idea about the current status and plan for the future accordingly.
Reduces Work Burden
Cloud ERP can reduce the burden by promoting automation and contributing to make employees happy with a smooth workflow. It also improves collaboration by offering seamless access to the corporate data anytime and from anywhere.
What are the Factors to Consider When choosing ERP Software?
ERP software offers many benefits to your enterprise, but you need to consider various factors to choose the right ERP solution. Here are some of these factors that can assist you to optimize your ROI over the period.
Upgrade or Replacement
It is advisable to check whether your company needs a new ERP system or upgrade the existing system. Today, many modules are available along with add-ons that you can integrate into the existing ERP system. It can help you reduce disruption and costs. But then, if your ERP system is outdated, it is always beneficial to replace it with advanced ERP solutions that give more mobility, scalability, flexibility along with top-class features.
Training & Setup
SaaS-based or cloud ERP solutions are easier to implement as compared to on-premise solutions. It is simply because the vendor takes care of every aspect of such a solution. Also, once ERP solution is integrated, it is necessary to give training to your employees for ensuring its optimum performance and leverage the benefits. You can ask your vendor whether training is provided or not before assigning ERP implementation project.
Integration with System
It is of the utmost importance that the ERP solution should work in sync with existing business applications or software. You can consider several integration points as per your business models. These points are system-to-system, module-to-system, etc. Flexible ERP solutions can seamlessly work with existing systems and assist you to expand its functionalities.
Reporting and Dashboards
Advanced and real-time reporting is one of the top features of cloud-based ERP solutions. You can get the audit-friendly and compliant financial statements as and when necessary. The latest reporting tools also enable users to apply in-system queries and smart filters along with real-time data. All the data and reports are displayed on interactive dashboards of the ERP solution.
Apart from ensuring that ERP processes are suitable to key business operations, you need to identify the needs of different departments. What makes ERP solutions a preferred choice of enterprises is its customization ability. An ERP solution has various customization tools, configurable workflows, and localized dashboards to get the optimum tool for taking your business to the next level.
Know the Details about ERP implementation Partner Selection Criteria
Why is SAP Cloud ERP the Best?
Enterprises need to redefine their strategies in this post-pandemic age. Here, cloud ERP solutions lend a helping hand. It not only provides users with scalability and flexibility but also increases agility for achieving the desired goals. You can drive your business toward growth and implement best practices. SAP Cloud ERP is one such popular solution for businesses across the world.
SAP Cloud ERP promotes innovation while reducing operational cost, accelerating implementation of standard practices, and grabbing new opportunities. It also offers better insights and scalability to keep the business ready for the future. What’s more, SAP Cloud ERP is designed for SMBs and startups and businesses can stay ahead of the curve with the help of it. It supports remote work and integrates all the departments efficiently.
You May Also Like: Importance of SAP Business One for Fast-Growing Businesses
What are the SAP ERP Implementation Process
SAP Business One Cloud ERP software is equipped with enterprise-level features. A reputed SAP partner can implement SAP ERP solution by following the standard methodology. Here are the key stages of SAP implementation.
First things first. Planning involves all the aspects of the entire project after considering the necessary details. A reputed SAP implementation partner can help you plan for the ERP project effectively.
Making a Roadmap
The next stage is to make a blueprint containing necessary features and functionality. Detailed outline of business processes and requirements is necessary before implementation and you can fulfill this necessity by making a roadmap.
This is the most important stage in which SAP implementation partner configures the baseline system and makes it ready for meeting all business requirements. This stage also includes customizations.
Test for Integration
Testing goes parallel during the implementation. The testing team will take care of this phase by performing unit and integration tests. It is necessary to ensure that the SAP ERP system delivers desired results.
After completing the production and testing phases, the project goes to a live environment. Here the team migrates all the data to the SAP system’s production environment. Once the entire data is migrated to SAP Cloud solutions, the former system becomes obsolete.
Post Implementation Support
It involves the support from a dedicated team. This support team constantly monitors and resolves production issues. It also helps the users understand the SAP system and applications. Post implementation support is of vital importance to ensure seamless operations.
Talk with our SAP Cloud ERP Consultant Today to Get More Advice
SAP Business One ERP Costing
The cost of SAP Business One ERP Cloud/SaaS inclues licensing fees, implementation cost, data migration, user training, and support charges. Though an experienced and reputed SAP Partner can give a better idea about SAP Business One ERP Cloud costing, here we give a brief outline of the calculation.
The primary and apparent cost of SAP Business One Cloud ERP implementation is license fees and support charge. It is possible for corporate users to manage licensing, hardware, and cloud infrastructure-related costs through a monthly cloud subscription model. It is fair to mention that the implementation cost for SAP Business One solution depends on necessary modules or functionality in line with your business needs.
Let’s go through the guidelines on SAP Business One implementation costs.
Finance- It includes general ledger, purchasing, accounts payable and receivable, fixed assets, banking, budgeting, financial reporting and other finance-related functions. Its implementation time is 15 days with the cost USD 22500.
Manufacturing- It includes finance, distribution, MRP, production resource planning, BOM’s, and production orders. Its implementation time is 40 days and it costs around USD 80000.
Distribution- It includes inventory management, purchase orders and planning, forecasting, goods receipting, CRM- activities and sales opportunities. Its cost is USD 50000 and implementation time is 30 days.
You can consult us to know more about the cost and other important information about SAP Business One Cloud solution.
Why Silver Touch for Cloud Based ERP Solution
Our professionals have hands-on experience in providing hosting, deployment, upgrade, training, support, and maintenance services in SAP Business One Cloud solution to the global corporate clientele. We offer the best-in-class hosting services that safeguard your corporate data effectively against hackers and unwanted incidents. We ensure smooth transition to SAP B1 cloud while meeting your diverse business requirements.
Silver Touch Technologies is a trusted SAP Partner that offers end-to-end services in SAP Business One and SAP HANA. We assist our clients to improve business efficiency and increase ROI that drive toward growth.
Conclusion about Cloud ERP Software
As compared to the traditional ERP software, cloud-based ERP solution is more scalable, flexible, and user-friendly. It is a cost-efficient option for SMBs and startups alike. Hope this detailed guide on features, benefits, and implementation stages will assist you to make decision and leverage the benefits of SAP Cloud ERP software.
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FAQs about Cloud ERP Software
Yes, SAP is dedicated to build easy-to-use and adaptable cloud-based ERP applications. The company assists SMBs, startups, and large enterprises to streamline processes and simplify complexities with the help of robust ERP solutions that run on the public or private cloud.
An application software that's hosted in the cloud and that users can access and use via a web browser, a dedicated desktop client, or an API that integrates with a desktop or mobile is known as cloud-based software or application.
Yes. ERP is suitable for every business across any industry sector. It covers all the departments including sales, production, HR, and financials.
A cloud-based ERP system is cost-effective and efficient tool for improving productivity. Users can get access to the corporate information from anywhere and anytime. It is secure and highly scalable so that your growing business can leverage its benefits.