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Advantages of Cloud Erp Systems

Essay by   •  October 17, 2018  •  Research Paper  •  1,531 Words (7 Pages)  •  131 Views

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Advantages of Cloud ERP

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Advantages of Cloud ERP

Enterprise resource planning enables firms to employ a unified system to automate and manage many business operations.  The primary distinction amid cloud-based and legacy ERP system is that cloud-based service can be updated, configured, and remotely erected (Peng & Gala, 2014). In-house ERP system requires the physical on-site central installation. Choosing the right ERP system can be a daunting task. The main factors t0 put into consideration are flexibility, technological advancement, and precision of the system. As technological advancements are being witnessed across the production and manufacturing facilities, it is important to consider such issues as whether or not to avoid or embrace cloud ERP platforms.

Through the use of cloud computing, a firm’s ERP can be moved to the next level with scalable and flexible management solutions. This kind of automation allows business owners and managers to have an instantaneous as well as a cohesive view of business functionality, taking in resources and processes from which deductions can be drawn.  In recent years, there has been substantial and rapid growth in cloud ERP system particularly within the service industry where huge revenues are generated. Taking into consideration this growth, it's clear that cloud enterprise resource planning is vital to most businesses, ranging from small to medium to international corporations. Unlike in-house ERP vendors that cannot adapt and scale very fast, cloud-computing services are gaining a competitive advantage.  They have an exclusive benefit of being fast, easily scalable, improving security, cost-effective, and offer real-time analytics as opposed to on-premise ERP systems. This warrants a value-added status in the field of information technology management.  

Cloud-based enterprise resource planning system offer real-time analytics. Modern business models require instantaneous analytics to offer business intelligence and process optimization on which decisions can be made. Cloud enterprise resource planning has an application programming interface (API) links to the platform to permit clients to scale analytics and reporting needs appropriately.  Real-time access via the cloud makes it easy to access valuable information faster, especially in manufacturing firms in which instantaneous analytics are needed to improve processes. Cloud backs the development and integration of API together with other platform-based applications thus focusing on the instant, integrated, and analytical feedback (Ramasamy & Periasamy, 2017).

Additi0nally, cloud ERP enhances security.  The information entering and leaving the enterprise resource planning system usually is confidential and therefore ought to be protected. Cloud-based ERP systems provide exceptional security services that make sure the data is well encrypted and guarded. Access to the cloud-based solutions by users permits activity tracking and hence offers a similarity of control as concerns user responsibility (Al-Ghofaili & Al-Mashari, 2014).

Cloud computing guarantees enhanced ERP performance and up to date information.  Shifting the enterprise resource planning to the cloud platforms avails resources and computational power that is required during the implementation of independent ERP systems. To small organizations that are not in a position to put up the massive infrastructure, the idea sounds good since all that is needed for cloud-based ERP to operate is a constant internet connection (Elragal & El Kommos, 2012).  Optimizing the Salesforce application cloud platform is aiding organizations create and keep up the ERPs with the times on a six-month sequence with no need of creating new releases. This is the same reason companies such as Sage and Kennedy are already applying this SaaS platform.

Cloud-based ERP solutions result in a decrease in total operational and up-front costs. On-premise enterprise resource planning solution requires human resource and hardware for maintenance. In addition to the ERP software itself and licenses, this will result in a substantial increase in IT budget. ERPs that are based on cloud services usually have the option of a monthly subscription that can be designed according to the need of customers with low initial investment costs (Duan et al., 2013). Also, the costs of implementing the system are generally lower hence minimizing total operational costs significantly. Constructing systems on a platform eliminates the advancement time needed to build programs from the beginning. Thus resources can be sufficiently assigned to more challenging components that are of value to the organization. Organizations are much able to review their current platforms and customize them at a reduced cost rather than building the program in-house.

Another strong point about cloud computing is that application programming interface (API) beta and user acceptance testing (UAT) in cloud solutions outweighs isolated testing. API beta and UAT testing have turned out to be the most commonly used method. This approach is better suited to finding and responding to actual problems facing the world unlike testing a commodity in isolation. The outcome is improved workflows and responsiveness (Nowak & Kurbel, 2016).

Other few more benefits offered by cloud ERP includes: faster implementations, continued support, scalability, disaster recovery, and non-physical servers are not required. Adoption of new hardware and slower updating is not necessary for cloud solutions that use the internet since updates are adopted without human-interaction. Also, it is not essential to maintain the hardware because there is no physical hardware on-site entirely. This is added advantage for operations that regularly ensure the hardware is in good condition and can in its place direct their focus to other critical areas within the facility (Nowak & Kurbel, 2016). More so, cloud ERP vendors provide timely support, and thus issues are sorted faster. Customers aren't worried about meeting new tax norms due to regular updates.

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