Advantages and Disadvantages of ERP In The Cloud

WHAT IS AN ERP SYSTEM?

ERP is the software that automates the daily work of employees in an enterprise. This helps to improve work efficiency and effectively manage the resources in the enterprise. ERP system act as the central resource management tool. Recently ERP in the cloud system is gaining more attention.

WHAT ARE THE BENEFITS OF ERP SYSTEM

  • Control Customer Information: Long back the customer information was discrete and managed by Excel. Implementation of ERP resulted in aggregation of all customer information in one place. Every employee in the company can access and view customer information. Some right holders may change customer information on demand.
  • Speed ​​Up The Production And Service Rate: ERP software serves as a tool to automate the entire production process from preparing materials to finishing products. The company can save time by using a single computer system. Decrease cost of ERP system and increase productiveness.
  • Quality Inspection & Project Management: The software helps to check businesses and track the uniformity in product quality. As well as helps in planning and allocating human resources according to project needs.
  • control financial formation: To understand the performance of the company. Managers will have to learn data from different departments. ERP software aggregates everything related to finance. Besides, can generate international standard financial copies such as IFRS, GAAP.
Cloud based ERP

ERP IN THE CLOUD

The term ERP in the cloud is gaining strength in recent years. An ERP in the cloud means the Enterprise Resource Planning System operated through the internet. In the current scenario, many ERP system manufacturers publish versions of their ERP software in the cloud. Due to which the ERPs are more accessible.

ADVANTAGES OF ERP IN THE CLOUD.

ERP systems in the cloud contain the main traits of traditional ERP which results in advantage and disadvantage.

  • Cost: ERP in the cloud refers to software located on the web servers of the contracted provider. This means that the company will only pay for the right to access a server and use a program. These payments will normally be monthly and will increase depending on the number of users that use the system. In that single monthly payment will be included the service, updates, and maintenance. The total price of ERP software in the cloud is way lower than that of an on-premise ERP. The figures of the operation are difficult to define, although in general, you can obtain specific examples of budgets for small, medium and large companies. The price of the system will differ according to the sector in which the companies work.
  • Improvements and update: The study conducted by Aberdeen Group, of 832 European companies surveyed, 34% had an on-premise ERP between 7 and 15 years old. According to the same study, the cost of the update was the main reason for obsolescence in these companies. The advantage of ERP systems in the cloud is automatic updating without additional cost by suppliers. This is a breakthrough since users will always have the latest version of the service available at no additional cost.
  • Flexibility: ERP in the cloud allows access no matter where, when, or how the connection is established. The only requirement is to have an internet connection. The user will have information in real time from any type of device. Another important feature is the speed at which the system allows you to add or remove users.

Also, read Behind the scenes of a cloud ERP.

DISADVANTAGES OF AN ERP IN THE CLOUD.

  • Weaknesses in auditing and compliance.
  • Legal aspects: When a company works with the personal data of customers, it must be well protected. Also, the company should ensure that their supplier meets all the requirements. Failure in internet connection posses serious issue to the manufacturing ERP. A good internet connection should be available throughout to access the software.
  • Temporarily Disabling For Maintenance: Suppliers must communicate such maintenance issues with the customers.

The explosion of the cloud computing market has attracted many companies. But some of them have not been able to withstand the competition and have ended up closing.

CONCLUSION

Cloud ERP is designed to simplify the life of corporate customers by transferring data processing to the service provider. At the same time, all authorized employees of the enterprise are provided with remote access to the corporate system interface via the Internet.

Even it seems like the implementation of ERP in the cloud is an easy task. Inadequate installation of this type of services can generate an increase in the cost of ERP implementation and frustrating delays in the companies.

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