What is Cloud ERP?
Before we talk about Cloud ERP, let’s break it down and define a few important terms to get a full understanding and picture of what Cloud ERP is and what it can provide your business.
Let’s start with a term that many have heard of, but a few may not know what it means. ERP or Enterprise Resource Planning is, at its simplest form, a software that integrates all areas of your business. It integrates the back-office; accounting and finance, with the front office; sales, marketing, customer relationship management (CRM), and web store; the purchasing department and warehouse, including inventory, shipping and receiving; and finally, production and manufacturing. It is the automation of your entire business managed in one single place.
Now let’s bring the cloud piece of the Cloud ERP puzzle into play. Cloud-based computing, also referred to as Software as a Service (SaaS), provides access to Software, servers, storage, and other computing system resources in data centers accessed using the internet or private network via a web browser. It allows you to access your business and ERP software on any device with access to the internet.
These two puzzle pieces come together to form Cloud ERP, a modern business solution for small and medium-sized businesses (SMB) to get a full function of applications reasonably priced without the expenditure and maintenance cost of hardware and Software. Next, we will look at some of the other pieces of the puzzle and the value a modern Cloud ERP system brings to your company.
Advantages and Benefits of Cloud ERP
There are a lot of advantages to Cloud software, especially with the modern workforce that can benefit a business. We’ll discuss in more detail on a few other Benefits of Cloud ERP in different sections of this page, and highlight some additional Advantages of Cloud ERP Software and Why Cloud ERP is the Future of business operations.
Costs are predictable. With Cloud ERP, you’re no longer getting surprise maintenance; hardware, upgrades, and support fees are all included in your subscription, allowing you to predict monthly and annual expenses easily.
Access from Anywhere and from Any Device
With more of the modern workforce always on the go or working remotely, Cloud software gives companies the ability to access data anytime and from wherever you are working—still having security features needed to determine which employees have access to data and when. The modern workforce is always on the go, and your system should accommodate when and where you want to work.
Reduced or Eliminated IT and Hardware Costs
The Software, servers, and other expensive hardware are no longer required. You are allowing your business not only to keep your hardware budget down but shift your IT department to focus on different parts of the company.
A benefit of a Cloud ERP is the architecture it’s built upon, allowing it to be customized or configured to adapt to an organization’s unique needs without having to blow your budget. Thus, it will enable a connected business to give you one source of the truth rather than operate on multiple applications and piecing them together.
Most Cloud-based ERP offers flexible deployment options because a modern ERP system is often web-based. It allows you to have the deployment choice you’re comfortable with, but the flexibility and technology of a modern ERP system. With Cloud ERP software like Acumatica, you have the option of Software as a Service model (SaaS), a private cloud model, or a traditional on-premise model.
With a Cloud solution, you can quickly scale to a larger or smaller system as your business needs change or even as seasons change. Without a modern system, this can be expensive and cumbersome. A seasonal business needs to keep the cost down during slower months. Acumatica allows businesses to scale up or down their resource level throughout the year.
Upgrades are part of the Software as a service (SaaS) model, you can schedule upgrades, and they can be performed automatically outside of your regular business hours. With legacy ERP systems, upgrades can be expensive and a significant event that can slow down your operation.
Private Cloud, Public Cloud or Hybrid Cloud
A public cloud is where you rent servers and storage from a third-party cloud service provider like Amazon AWS, Microsoft Azure, Google, and others. A public cloud subscription includes all hardware, software, and all infrastructure and is maintained and managed by the cloud and ERP provider. The public cloud allows little to no maintenance and eliminates purchasing hardware – including servers – or any additional software.
Acumatica Public Cloud or Software as a Service (SaaS) Option. Acumatica hosts and maintains all hardware, software, and upgrades on an AWS server, included in the subscription price. SaaS is our clients’ most popular option because they either have small IT teams or clients with larger IT teams who don’t want to maintain servers on-site or in their cloud infrastructure.
A private cloud environment is an infrastructure hosted on an on-site server or a third-party service provider. The infrastructure is dedicated solely to your organization and always maintained on a private network. With a private cloud, your IT Team or a third party network provider handles your system maintenance.
With Acumatica Private Cloud, the client can run the system either in their cloud environment or on their server. We have clients who choose Acumatica’s Private Cloud for several reasons.
One client is a tribal casino whose tribe’s data sovereignty requirements are such that all data must reside on tribal land. Thus they host Acumatica on their private server. Their IT Team maintains the server, and Milestone works with them to perform their upgrades. Another client we work with already had an AWS subscription where they hosted other software programs, so they chose to host and maintain the Acumatica on that AWS site, and Milestone works with them for upgrades.
Some companies utilize a hybrid cloud, which means that they have a combination of both. They may have an on-premise ERP or accounting system but are using tools like importing bank statements, a cloud-based budgeting tool, or AP Automation, pushing data from their on-premise accounting system to a cloud-based tool.
One client who utilizes an on-premise ERP program needed more dynamic reporting that would be accessible by their remote sales team. Here, we integrated their on-premise legacy ERP system with Power BI, a cloud-based data visualization tool, using relational data that updates in real-time.
Other hybrid cloud solutions involve running a traditional “on-premise” accounting system in a hosted environment such as Amazon Web Services or Microsoft Azure, using a Citrix or remote desktop application to login.
A true cloud program is one that was designed from the ground up to be a web-enabled system.
Cloud security is a hot topic as more business move their operations to the cloud. The reality is the cloud is just as secure, if not more, than your own on-site data center. With the cloud, you have large data hosts such as Amazon Web Services, Microsoft Azure, Google Cloud, and other providers using their resources to ensure their servers are secure. These large companies are managing your servers so you can pivot your IT resources and let them focus on other places of your business.
Cloud ERP vendors take additional precautions with security in addition to the data host providers. We’ve discussed and written a lot about cloud-based ERP security with Acumatica over the years and Why Acumatica is more secure. A huge advantage with Acumatica is that you can’t get more secure than Amazon Web Services (AWS), the SaaS cloud Acumatica chooses to deploy on. Also, if you’re more comfortable hosting with a particular cloud service provider or on your private server, Acumatica gives you the flexibility to do that as well.
Deployment and Licensing Options
Deployment options: On-Premises, Hosted, or SaaS
On-Premises (or on-site server):
Your company’s IT team or a third-party manages all the infrastructure, and you will use a Value Added Reseller (VAR) like Milestone for deployment (implementation, support, upgrading, etc.).
This is where a business purchases a license for the software. A hosting provider will manage most of the infrastructure and software deployment, as described above. The hosting provider can be outsourced or done by an internal IT team.
Software as a Service (SaaS):
Is fully managed in a web-based environment, accessed through a web browser, and eliminates the traditional requirement of installing software on a local workstation or server. Usually, a fixed fee, licensed on a subscription basis and hosted by the software provider. In many cases, this option is on a Public Cloud for hosting.
Buy Outright or Software Subscription
This is when a business or organization purchases the software license outright. It’s the old way of purchasing ERP software with a higher initial cost with owning the license outright, but will still require an annual fee for upgrades and maintenance.
The company pays for the software license on an annual or monthly basis with upgrades and maintenance usually included. This is often referred to as Software as a Service or SaaS and provides a lower cost of ownership and allows companies to keep cash on hand while they upgrade their ERP system.
Multi-Tenant and Single-Tenant
Is where the Cloud software provider has a single instance (version) of software on a server and serves multiple tenants (customers) simultaneously.
Each customer has their application and database hosted on their own instance.
Cloud Computing For Business
There’s a lot of discussion about Cloud Computing and its relation to the consumer but let’s focus on how cloud computing relates to business applications and discuss the most common terms used.
The perfect place to start is cloud computing. Cloud computing gives companies access to software, server, storage, and other computing resources that businesses use and then users access. You’re using the internet to access applications rather than having something right there on your desktop. Many people are using software; that application is on a desktop and a server. With the cloud, all you need is a web browser.
Software as a Service (SaaS)
As defined in the previous section, Software as a Service is something that many different companies have started to provide, and Acumatica is one of them. You’re not only utilizing the software; you can go online and use it from any computer, mobile device, phone, or even a tablet.
Customer Relationship Management (CRM) was one of the first things companies started using in the cloud, with applications such as Salesforce and HubSpot providing remote solutions for remote salespeople. Businesses then started to move their email servers to the cloud-like Microsoft Office 365 and Gmail and utilizing data storage services like One Drive, Google Drive, Amazon Cloud Drive, or Apple iCloud. These are just a few cloud computing services that businesses are using in their office, that many might not even realize they are using a cloud solution.
Infrastructure as a Service (IaaS)
Amazon Web Services (AWS), Google, Microsoft, and IBM are taking cloud computing a step further, and they’re providing infrastructure as a service or IaaS. You can rent servers and storage from these companies for a monthly fee. Large companies are using these types of organizations to host their products and subscriptions. Acumatica utilizes Amazon Web Services as its infrastructure, but likewise, companies like Netflix, Experian, Magento, and WordPress use AWS.
Improvement in Technology
Technology has improved so much that high-functioning applications can safely and securely run on cloud hardware. Businesses use Skype, Zoom, Microsoft Teams, or WhatsApp to communicate. Companies are utilizing online banking, CRM, HR software, and ERP and accounting software to connect all these business cloud applications.
The Cloud ERP Buzzwords
Business Intelligence (BI) or Data Visualization -These tools provide a visual representation of your data.
RPA stands for Robotic Process Automation – An RPA tool operates by mapping a process for the software robot to follow via computer pathways and various data repositories.
Artificial Intelligence (AI) – Is becoming more prevalent in the modern world and especially in technology.
Machine Learning – an extension of Artificial Intelligence, is defined as the scientific study of algorithms and statistical models that computer systems use to perform a specific task without using explicit instructions.
Connected cloud or multi-cloud – used to describe the integration of multiple cloud solutions that talk to each other using web-based API or Application Programming Interface.
Internet of Things (IoT) – is a term used for the billions of physical devices all over the world connected to the internet.
KPI – refers to the Key Performance Indicator. KPI’s evaluate the success of an organization or a specific activity in which the organization engages.
UI – refers to the user interface. UI is what the user sees when working with a particular program.
VAR – refers to Value Added Reseller. Companies like Milestone work to implement programs such as Accounting systems, ERP programs, or integrated solutions.
Digital Transformation – Leveraging modern technology to create an organizational change that leads to better visibility and productivity.
The Pricing Difference
The cloud has changed ERP pricing. With Cloud-based ERP, you pay a subscription fee for your software license and hardware. This cost scales up and down based on the number of users for most software vendors.
Acumatica uses a consumption-based pricing model. Like your electric bill, you pay for the resources you anticipate using, and you can always increase or decrease when necessary. For example, If you have a small apartment, you will pay a different price than the electricity used in a three bedroom home.
A massive advantage for Acumatica users because you don’t have to pick and choose which staff are heavy or light users and who you’re willing to pay to get a license fee. All users that you choose can have secure access to the system without additional costs.
With Cloud ERP, there are no huge upfront costs of paying a large amount of money to own the software and the cost of upgrades and maintenance of the system. Not to mention the cost of buying new hardware every few years and overwhelming your IT staff with day to day management and security of your in house infrastructure. With Cloud pricing, you pay a monthly or yearly fee for the use of the software, which includes software upgrades and all the necessary infrastructure needed to keep the system up and running smoothly.
Other Important things to consider when evaluating cloud erp
As you continue your research on Cloud ERP software, there are a few other things that should be considered or be aware of as you narrow down your search.
It’s important to start your search with a Digital Transformation Strategy to get you started on your goals and objectives to changing your organizations and get the most out of modern technology. If digital transformation is your business’s end goal, it’s important to look at some Key Components that can help lead to a successful strategy.
User Reviews – It’s important to look at user reviews and read comments from real users. As you start to narrow down your search on a few different Cloud ERP solutions, looking at G2 Business Software Reviews is a great resource to get opinions from real users.
After you have the demo round and as you get towards a final decision, it’s essential to ask your Partner or Value Added Reseller (VAR) for a couple of references so that you have a chance to ask questions not only about the software but about the Partner as well.
Analyst Reviews – Analysts can be a great resource to get more information on Cloud ERP. These companies do a ton of research on software and give their recommendations on selecting which vendors they consider to be at the top. Many analysts evaluate ERP software, but here are some of the most popular.
PC Magazine is always a resource that software vendors like to promote. They have their Editors Choice Awards and detailed reviews of the software. Which ERP systems are the most popular with their users? It is an article published by Forbes. Gartner Peer insights and Gartner Digital Markets are other great places to get real-life user reviews. Remember, these are just a starting point. Once you’ve narrowed down your search and are in the final decision stages, it’s important to ask for references and talk with real users about the product and the Value Added Reseller you’ve selected.
If you have any more questions about What Cloud ERP, please feel free to contact Milestone for additional information or if you would like a free software consultation or Acumatica demo.
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