What is Cloud Based ERP?

Enterprise resource planning (ERP) is a term used to describe the broad set of activities that helps a business manage things like inventory management and finances. Cloud-based ERP is ERP software that enables your company’s accounting and reporting to run in the cloud (not really surprising, right?).

Cloud-based ERP is especially popular among startups, SMBs, and new business divisions within already existing companies. Many businesses that adopt a cloud-based ERP system do so in hope that it will transform how they use and pay for information technology.

Cloud Based ERP vs Traditional ERP

Cloud-based ERP systems are quickly gaining in popularity and many businesses have already made or are planning to make the jump soon from a more traditional ERP system. This is due in part to two big differences between cloud-based ERP and traditional ERP.

Curious what they are?

Traditional on-premise ERP software is installed locally, on a company’s own servers and computers while cloud-based ERP software is hosted on the vendor’s servers and accessed via the internet. Pricing is another big factor.

Cloud software is usually priced on a monthly or annual subscription basis, and traditional ERP software is usually priced under a one-time perpetual license fee. You should also expect recurring support, training, and update fees when using traditional on-premise ERP software.

However, cloud-based ERP systems have a lot more to offer than just a marked down price tag.

Cloud Based ERP Systems Are Cheaper and Easier to Use

There are several advantages to using a cloud-based ERP system versus traditional ERP including:

  1. A cheaper upfront investment. Cloud-based ERP systems are typically 30% less expensive than on-premise systems.
  2. No additional hardware investments are necessary. For example, you don’t need a server infrastructure when using cloud-based ERP.
  3. Easy customization. Organizations can work with vendors to see what changes can be made to customize the ERP to their business.
  4. Better data security. Data security is in the hands of you vendor and this often offers greater stability and a reliable stream of updates.
  5. Improved scalability. It’s easier to align cloud-based ERP with your company’s growth and integrate with other cloud-based products.
  6. A reduced risk of catastrophic data loss due to hardware or software failures.
  7. Faster and easier implementation times. It’s much easier and a lot less time consuming to deploy a cloud solution nowadays than deploying something on-premise.

There’s also more options than ever to choose from when you’re shopping for a cloud-based ERP such as Intacct and SYSPRO just to name some examples.

Not sure if cloud-based ERP is right for your business? Give one of our advisors a call! We’d be happy to talk things through with you and help you find the right solution for your business.