These days everything is about what’s in the cloud. But, what is the cloud and where is it?
That seems to be the question as more and more systems are moving to the cloud. Your ERP is one of those systems making the move.
This article will help you better understand what a cloud ERP is and its benefits. We’ll also list some example cloud-based ERP systems.
If this is your first time evaluating a cloud ERP, we’ll cover everything you need to know whether you’re switching to a new system or making your first ERP purchase.
What is a Cloud ERP?
Let’s start with what the cloud is.
The cloud is a network of servers that store data. Each server has its own function. Some servers run applications, or “deliver a service”, while others just simply store data.
The main benefit of the cloud is that can be accessed remotely through the internet. So, you can access an application or stored data from any computer that has an internet connection.
So, a cloud ERP means that the Enterprise Resource Planning system is hosted on a platform, or servers, that can be accessed through any web browser.
Instead of opening up a program installed on your computer desktop, you can just access your ERP system by typing it into your web browser.
Cloud Vs On-Premise ERP
Most merchants are familiar with on-premise ERP software.
On-premise software is bought and installed locally on your company’s own hardware and servers. You have to install, maintain, and manage the software yourself.
With the cloud, however, you don’t have to maintain any software on your own servers. Instead, the vendor gives you access to servers that they own and maintain. They then deliver the software to you as a service, which you can access via the internet.
That’s why cloud ERPs are usually referred to as SaaS (software-as-a-service) providers.
Benefits of a Cloud ERP
Now that you know what a cloud ERP is, you can better understand the benefits of using one.
Cloud ERPs usually require lower upfront investment and deployment is faster.
You don’t have to purchase the software, hardware, servers, and facilities necessary to run your ERP. You won’t need to train and maintain an IT team that’s responsible for the software.
For cloud ERPs, all you need are computers that can access the internet. You most likely already have that. The ERP vendor is responsible for maintaining the infrastructure.
(To note, while upfront costs are usually smaller, you will mostly likely to have a pay a monthly fee to continually use and access the service.)
24/7 Proactive Monitoring
For most SMBs, the appeal of the cloud is that you personally don’t have to have an IT team that has to maintain your software’s infrastructure. You don’t need someone constantly on the clock watching for any performance issues.
Instead, this is the main job of the ERP cloud vendor. They host and maintain your data. They’re watching it day in and day out to make sure your business is always running smoothly.
For an SMB, this service makes a big difference in terms of cost, resources, and peace of mind.
Unlike on-premise, the cloud can be access anywhere at any time, as long as there is an internet connection.
This means you can do business anywhere and have access to your data. No matter what the device, you can access accurate information.
This isn’t possible for on-premise because you need to be on a computer hooked up to the local server connection.
Just like with any software, there are going to be updates. But, cloud ERPs make updates quicker and more simple.
Cloud ERP applications can automatically update your software without affecting your business. You won’t lose any customization or integrations you had previously.
On-premise updates can require shutting down systems entirely and re-implementing software. You’ll have to re-build your customizations from scratch. This is time consuming and costly.
Many merchants opt not to upgrade and risk performance issues when using outdated software.
ERP systems aren’t the only software making the move to the cloud. Your other retail systems such as your POS and eCommerce platform are also in the cloud.
To fully use all these system and improve your operational efficiency, you’ll want to integrate them. Integration allows for the automatic transfer of important data between your systems.
For example, your ERP will automatically grab orders from both your POS and eCommerce platform. When you sell an item on your eCommerce store, inventory will be decimated across your Amazon account or POS.
This type of tight integration is more feasible through cloud-based systems. It’s easy to connect and disconnect systems as your business evolves over time.
(Full disclosure, nChannel provides a cloud-based multichannel management platform that helps retailers integrate their ERP, POS, and eCommerce systems. That’s why we know so much about cloud-based integration)
Together, these benefits make a cloud ERP a great system for many different types of merchants. It doesn’t matter if you’re thinking about switching from an old, legacy ERP or looking for your first system, you should consider a cloud ERP.
Example Cloud ERP Systems
If you decide that you want to look more into cloud ERPs, here are few example systems that run in the cloud:
What to Do Next
Now that you know what a cloud ERP systems is, you might need help deciding what ERP system is best for your retail business.
Check out our Multichannel Implementer’s Guide which will help you evaluate vendors and choose the right technology, whether ERP, POS, or eCommerce, for your business. Click the image below to get your own download guide!