ERP (Enterprise Resource Planning) is business management software that is designed to integrate the key functions of an organization into a unified system. As modular software, the Distribution ERP system helps organizations to manage key business areas such as finance, accounting, HR, production, materials management, customer relationship management (CRM), and supply chain management while enabling them to automate back-office processes to improve efficiency.

Basically,there are two types of ERP solutions i.e. On-premise ERP and Cloud-based ERP. On-premise ERP solutions are installed locally,on a company’s own computers and servers with dedicated IT team managing and maintaining those systems. On the other hand,cloud-based ERP comes as SaaS (Software as a Service) and can be accessed through internet. With cloud ERP, users get the flexibility to share and transfer data across business departments in real-time.  

The traditional on-premise ERP solutions are basically housed within a company’s own server infrastructure where in-house IT team is responsible for updating and backing up of data. However, in the case of cloud ERP, availability, backup and disaster recovery are the responsibilities of cloud providers. As the market is getting competitive, organizations are heavily relying on capabilities like AI, IoT and advanced analytics to stay ahead in the competition. They are turning towards cloud-based ERP solutions to eliminate data silos to enable growth.  

Cloud based ERP versus On-premise

Cloud ERP is available as a Software as a Service (SaaS), enabling users to access data in real-time, provided they have the internet connectivity. The organizations don’t need to set up infrastructure such as processing power, memory, and disk storage to host ERP. In the case of cloud, all these computing resources are maintained in remote data centers of the service providers. As in case of traditional on-premise ERP, organizations are required to set up computing devices including servers, computers, hardware and software, etc to host software which eventually leads to high upfront cost. As you don’t need to set up the infrastructure for cloud-based Enterprise Resource Planning Software, it has much lower upfront costs, enabling small and midsized organizations to leverage digital transformation.  

Benefits of Cloud ERP 

Less Upfront Cost: – With cloud, you don’t need to purchase the software, hardware, servers, etc. All you need are computers and internet connectivity to access ERP while your vendor is responsible for maintaining the infrastructure.  

Faster Implementation: – As compared to on-premise systems, cloud solutions are faster to implement. Rather than focusing on implementation and customization, organizations can spend more time on their core business activities.  

High Scalability: – Cloud ERP solutions are perfect for rapidly growing organizations as they can be scaled up or scaled down easily. Organizations don’t need to purchase and install new hardware or additional software when they need to accommodate more users. Furthermore, cloud solutions are free from the hassle of maintaining or replacing on-premises hardware and software. 

Software Updates: – Unlike on-premise solutions, cloud ERP can be updated quickly and automatically without affecting your business. In the case of on-premise ERP, updates can require shutting down systems entirely and re-implementing software.

How Cloud ERP can help your business?

Low Barrier to Entry: – Like other SaaS products, cloud ERP enables organizations to start with minimum investment. ERP solutions help organizations to eliminate data silos by bringing data from disparate systems to a centralized database. With clear visibility of data, organizations can have better control over the processes. 

Mobility: – Cloud solution can be accessed from anywhere via internet connection. With cloud solution, users can access the technology through an internet connection at home or at any other location. Furthermore, cloud ERP solutions such as Microsoft Dynamics 365 for Customer Engagement enable organizations to optimize their field service by organizing teams and equipment while precisely scheduling appointments to deliver amazing service experience. These solutions offer seamless experience across mobile devices.

Disaster Recovery: – Cloud ERP such as Microsoft Dynamics 365 Business Central is deployed on Azure (managed and maintained by Microsoft). So, data backup, safety, security, Disaster Recovery, etc are responsibility of Microsoft. With data centers located across the globe, you’ll have access to your data quickly, even if you don’t have physical access to your place of business. 

Better Decision Making: – Cloud ERP provides businesses with real-time analytics based on built-in business intelligence and machine learning, enabling them to make better, more informed decisions. Business Intelligence enables organizations to spot trends to identify sales opportunities.  

Integrated Business Applications: – Cloud ERP solutions come with a range of business applications that can work together seamlessly or can also as a standalone application. These applications can help in automating workflows, minimizing manual work to boost efficiency. Integrated business applications enable users to work from a single window.

So, organizations such as manufacturing, wholesale, retail, hospitality, etc should leverage cloud-based Enterprise Resource to leverage digital transformation. Available as SaaS solutions, these business applications offer flexibility to organizations with tight IT budget to start with a cost-effective manner while scaling up easily as the business grow. 

Contributor: – inoday is a leading Microsoft Partner Company offering licenses and services for Microsoft Dynamics NAV, Microsoft Dynamics AX, Microsoft Dynamics CRM, Microsoft Dynamics 365 and Microsoft Dynamics 365 Business Central. We offer a complete set of services from ERP evaluation, implementation to maintenance.