Cloud ERP is an enterprise resource planning (ERP) system that runs on a vendor’s cloud platform as opposed to an on-premises network, allowing organizations to access over the internet. ERP software integrates and automates essential financial and operational business functions and provide a single source of data, including inventory, order and supply chain management and help with procurement, production, distribution and fulfillment.
Given this scope, any ERP system must be highly available to all business units, wherever employees may be working, and deliver a unified, up-to-date view of data. Cloud-based ERP as a service meets these requirements. Because organizations access the software over the internet, all that’s needed is connection and a browser.
Because it’s hosted by the ERP vendor and provided as a service to businesses, cloud ERP software supports the same, or better, functionality as on-premises systems without most of downsides, like upfront licensing fees.
In its report, IDC said “demand for cloud-based ERP systems continues to grow because of their ability to access and analyze massive amounts of data in near real time.”
That means real-time inventory insights to sales teams and freeing finance teams to keep a close eye on cash runway and quickly respond to audits or other calls for performance data.
All cloud-based ERP software provides core financial and accounting functionality. From there, the types of modules or applications an organization chooses to implement depend on its industry and specific business needs. Available cloud ERP modules include:
For starters, not all clouds are equal. Some legacy ERP vendors have retrofitted their software to run from their own internet-connected data centers. Businesses that implement these ERP systems may miss out on the full benefits of cloud-based ERP, such as simplified upgrades and the strength of the cloud data center model, where a massive pool of resources support applications versus dedicating infrastructure to individual software components.
There are also multiple types of cloud ERP software:
Multi-tenant SaaS: A single version of the ERP software and its associated infrastructure serves multiple organizations. However, while each organization uses the same software and is hosted on the same servers, one company’s data remains inaccessible to others. A true cloud ERP system is typically a multi-tenant SaaS.
Single-tenant SaaS: A single version of the ERP software and its associated infrastructure serves just one organization. In other words, an organization’s data is hosted on private servers runninga unique software instance. Some cloud ERP vendors will give customers the choice of running a private instance or a shared instance.
Public cloud: Owned by the service provider, multiple organizations share cloud computing services. However, each organization’s data and applications are inaccessible to others. Examples of public cloud include Amazon Web Services, Google Cloud, Microsoft Azure and Oracle Cloud.
Private cloud: A service that is not shared with any other organization.
Hybrid ERP: Just as it sounds, a hybrid ERP approach combines on-premises software with a private cloud or public cloud for computing, storage and services.
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