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Understanding The Advantages of Cloud ERP 

   
2018-03-02 
Nicholas Gosselin 
   
What is Cloud ERP?

The days of physical hardware are in short supply. The days of internet based software are here. Traditionally A company will install the software and data physically onto the computers and house the storage in the same building in giant server towers. This will be managed by onsite IT personnel. 

With a cloud based ERP it will be a SaaS or software as a service. Now the software services that the company provides will be stored via the internet in a cloud service and managed offsite by the ERP provider. Customers then utilize the service provided by the company online via an internet connection.

Hosting a product online with a cloud service can provide a host of benefits for companies today. For example take Microsoft Office Suite 365. Instead of having to produce discs, package, and ship the product to multiple different vendors as Microsoft Office used to be. Microsoft can just allow access to the product via an online purchase or redeemable code. 

Software Cost Reduction

There are no shipping costs, material costs or distributor costs because there is not a physical product anymore. Companies can get there product to customers all over the world without having to build a comprehensive supply infrastructure.

Skilled Staff Reduction

Another benefit to hosting the product online is the additional savings a company will have. Both at startup and over the life of a company. To host data and software on site for a company is costly, there are IT staff to pay, more building space that has to be utilized for physical storage, and the constant maintenance costs of servicing the data on the company's money. However in addition to selling a product using a cloud server the company can store there in house administrative data on a cloud server and get rid of any costs dealing with onsite IT employees, and the physical storage units on site for the company.

So the first two advantages of cloud ERP are cutting costs on the distributing of the product and cutting costs for administrative data. That's as if you are doubling your savings for just changing the method of which you store data. 

Faster, Less Expensive Deployment

The next big advantage on top of saving on costs is the speed of which the company can deploy and upgrade current systems. With an outside company hosting and storing the data and software offsite via the cloud service you can start up or change a product much quicker and deploy new services faster since the infrastructure and employees used in a physical Legacy ERP system will take longer to set up the service. Upgrading is costly and will typically take longer as well. Upgrading and customizing the service also takes time and employees who are familiar with the hardware and service that the company employs. 

When using a cloud, most companies will have a continuous upgrade system in place through updates from the cloud server and constant monitoring of the data to insure security and protection for the company and their customers.

Stay Competitive

In todays modern world with information technology expanding at a rapid rate and companies like Microsoft and Apple making so many different products all capable with Wi-Fi and internet abilities, any business would be foolish not to at least consider a cloud ERP. Society is moving more to a paperless and online based system. Using a cloud service can help attract more customers and tap into more of the marketplace. 

There are more benefits to switching to a cloud based ERP than keeping a traditional Legacy ERP. 

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