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Benefits of Cloud ERP 

Today's new cloud technology is replacing traditional systems in a variety of companies. Here are 4 benefits of a cloud ERP versus a legacy ERP. 

But first…what is the difference between the two systems? 

A legacy ERP is an on-premise system that helps a business perform the day-to-day business processes. It is made up of hardware and software that is owned and operated by the company. In contrast, a cloud ERP is offered as a software-as-a-service (SaaS). The infrastructure is owned and operated by one company and offered to other companies. The service is web-based and provided to the purchasing company generally on a pay as you go basis. 

1. Start Up Costs 

Legacy ERP systems require large amounts of time and money to establish the infrastructure. In a traditional ERP, the company owns and operated the software and hardware. This requires the company to purchase the technology, hire employees to train and service the technology, and obtain enough space to store the technology. Outsourcing this portion of the business and using a cloud ERP eliminated these expenses. The company no longer needs to spend the capital on establishing and maintaining the infrastructure and, instead, pay for what you need on a pay as you go system. 

2. Economies of Scale 

The decreased expenses associated with using a cloud system over a legacy ERP contribute to economies of scale. According to Verio, a communications company, cloud computing allows you to “increase volume output or productivity with fewer people, [therefore], your cost per unit, project or product plummets.

3. Back Up and Recovery 

With a cloud ERP, data is backed up in the cloud rather than on a device. Service providers are generally skilled in recovery, therefore, making it easier for clients and giving them peace of mind. There is less likely going to be a situation where hardware/software is going to crash and information lost. 

4. Flexibility 

Converting to a cloud ERP increases flexibility in two ways. First, companies that use cloud ERP are able to easily adapt to changing bandwidth needs with little disruption and additional costs. Companies that host the infrastructure for the cloud are equipped to handle large workloads. Therefore, if a client wants to increase bandwidth, it is easier to increase via cloud rather than legacy because you don't have to purchase additional hardware and software. 

Another benefit of the cloud is its flexible means of access. Since the software is web-based, employees are able to access it as long as they have internet. This is a benefit for companies with travelling employees, multiple offices, or employees who want to telecommute. 

Finally, cloud computing allows a business to innovate and experiment with various business ventures with reduced risk. Additional cloud resources can be provided in a short time frame and with little investment (since cloud is a pay as you go service). This opens doors for companies to try new things with little time and money. Cloud technology is becoming increasingly more popular! It is no longer necessary for companies to purchase, store, and maintain their own hardware and software. Instead, that part of the business can be outsourced to companies who specialize in providing SaaS saving companies time and money, which is able to be invested in increasing productivity and profitability.  

By: Jessica Bronte 

TEKOA ERP Software 

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