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What Is a Cloud ERP? - Everything You Need to Know

Written by FHL

29 | 04 | 21

Cloud  |  
7 minute read

When it comes to scalability, accessibility and guaranteed reductions to operating costs, many businesses turn to Cloud ERP software to satisfy their needs. A Cloud ERP is an Enterprise Resource Planning solution that automates critical business processes, such as finance and operations, becoming the single source of truth and visibility over inventory, supply chain management and fulfilment. 

It’s a useful tool for business professionals who can access the Cloud ERP over the internet, meaning it can be used on-the-go. Users get access to a unified, real-time view of their business data, which is ultimately crucial in today’s data-driven economic market. Relevant, real-time data is what informs our decisions and lets our organisation get ahead.

But this is just a small explanation of Cloud ERP. There are multiple levels and advantages of the software we’ll explore in this blog post. 

You can use these links to jump to any section of this blog that catches your eye.

What Is a Cloud ERP?

Cloud ERP is hosted off-site, a Software-as-a-Service (SaaS) solution that provides the same support and functionality as you would find in on-premise ERP solutions. In most cases, Cloud ERP is a more accomplished, more flexible and cheaper solution than its on-premise counterpart - but more on the benefits later. 

Cloud ERP solutions provide support for finance, operations and accounting, among other core processes. From order management to invoicing, expense approvals to consolidations, Cloud ERP analyses huge amounts of data and processes them in near real-time, quickly providing users with the insights they need. 

Cloud ERP software is scalable. This means many examples of Cloud ERP can be tailored to suit the requirements of specific organisations. For example, the kinds of modules that are implemented as part of ERP could be ones for:

  • Inventory management
  • Procurement
  • Customer relationship management (CRM)
  • Accounting
  • Material requirements planning
  • Human resource management
  • Supply chain management 
  • Project management 

Additionally, Cloud ERP operates with end-to-end security, meaning that whatever modules and processes are being run through the system are protected by a secure and encrypted connection.

Security is one of the key considerations for those looking to utilise ERP within their business processes. Similarly, there are questions regarding pricing and what makes a Cloud ERP a viable choice when there are on-premise ERP options available. 

Cloud ERP vs. On-Premise ERP: What’s the Difference?

The simple difference between Cloud and on-premise ERP is where the software is located. Cloud ERP is hosted off-site by a third-party provider. However, many significant differences help interested parties determine which type would work best for them. 

On-Premise ERP

Installed by an organisation’s IT team or service provider, the on-premise ERP solution will be licensed alongside leasing or buying servers and storage to run and house the software on-site. This can be the more expensive option and results in bulky equipment taking up space within a premise. 

Because the ERP is located on-site, businesses that choose this type of ERP will more than likely incur maintenance costs caused by the need to update, troubleshoot, customise or patch. There might also be other software added on later as the ERP needs updating to match changing business needs. 

Essential updates will most likely be managed by an IT team, who will have to stay up to date with the need to upgrade or improve the ERP over time. 

Cloud ERP

Hosted by a third-party vendor, Cloud ERP is simply accessed through a WiFi connection. In contrast to on-premise solutions, the application, storage, servers and updates are handled by the vendor, who is responsible for maintaining the security and capabilities of the service. 

In terms of security, while an on-premise ERP software will consolidate data onto a central network, managed and secured by the business itself, Cloud ERP will consolidate data onto servers located in secure external facilities. 

Typically, Cloud ERP can be delivered through other platforms (for example, SalesForce), which will be leveraged for their security. The Cloud ERP vendor will also add their own security protocols on top of this. 

Additionally, Cloud ERP is leased on a subscription basis, rather than paying a large upfront cost (alongside the costs of continuous updates). This, combined with its inherent accessibility, make it a popular option. In fact, 95% of businesses found their processes improved after implementing an ERP solution.


If you’re interested in discovering the true value of a Cloud ERP solution, download our guide on the subject. Click here for more information


Cloud ERP has all the capabilities of on-premise, combining financials, CRM, ERP and eCommerce and can be specifically built with an understanding of the businesses that require it, being configured to the specific requirements determined by the interested party. 

What Are the Benefits of a Cloud ERP?

When businesses implement ERP, they’re looking for visibility, actionable insights and lower upfront costs, among other things. 

Reduced Costs

Cost is always one of the most important considerations for any software implementation. Solutions that guarantee lower upfront and operational costs while still providing ROI are always an attractive option.

For on-premise ERP, upfront costs. Implementation costs, server purchasing, security onboarding, manual installation and IT staffing will all be incurred at this point, potentially bringing the cost of an ERP much higher than was initially anticipated. Then there are also maintenance costs, additional servers and upgrades to think about. 

Cloud ERP is the cheaper option, doing away with the need for manual installation and extra IT staffing. While these services will be subscription-based, they’re more than likely cheaper over time and are a financial commitment that’s a lot simpler to handle. 

In-Built Agility

Cloud ERP solutions can be easily customised or scaled to fit the requirements of a business. The initial setup will be calibrated to provide what is needed. As time goes on and a business gets more used to using it, Cloud ERP can be modified to provide additional data insights and services.

In contrast, while on-premise ERP can also be customised, any customisations will be built around the in-house tech being used, meaning future upgrades will be limited by the in-house digital infrastructure which could itself be out of date. This can lead to businesses choosing not to upgrade their on-premise ERP, continuing to use out-of-date software. 

Security and Compliance

When weighing up whether to utilise a Cloud ERP provided by a vendor, the question regarding security will be at the front of everyone’s minds: Will the vendor be able to safely store business data? 

It’s a necessity for Cloud ERP providers to offer secure digital environments. So, they’ll more than likely have robust security and compliance protocols in place, potentially more than the purchasing company itself. When using a Cloud ERP solution, businesses can rest assured their data is secure and backed up. 

Cloud ERP providers will typically offer a wealth of enterprise-level security solutions, alongside end-to-end data encryption ensuring data is only accessible by the company itself.

Scalability

A business new to Cloud ERP will begin with the basics, customised to their needs and integrated with current on-premise or cloud software. After this, more can be added as needed, with the vendor’s support who will advise on what complimentary additions to utilise. 

These solutions integrate well with other software types and new modules can be introduced with no need for downtime or the purchasing of new hardware. This means businesses can scale their ERP quickly and proactively, with little chance of huge additional costs. 

Let’s explore one of the best examples of a Cloud ERP solution.

NetSuite: A Unified View of Your Business Operations

NetSuite is the world’s most-deployed Cloud ERP, used by more than 24,000 organisations in over 200 countries. This Cloud ERP solution is best-in-class at aligning key processes and operations within one central location, combining financials, CRM, ERP and eCommerce to provide a single source of truth for users. 

Through NetSuite ERP, companies can develop their internal processes by accessing real-time insights that ensure users are more capable of accurate decision-making. As NetSuite is a cloud-based ERP, it integrates with other parts of a business’ infrastructure and is supplied with automatic updates so those who use it maintain their flexibility.

The user interface is designed with the user in mind, combining data with visual insights so that users are presented with an accessible and meaningful ERP experience, getting the answers they need when they need them. Business decisions can be made faster and more accurately. 

 

One of the key benefits of NetSuite ERP is it’s guaranteed to boost productivity while reducing operational costs. The software automates vital processes such as billing, fulfilment and order management, streamlining processes that may have once been complex. Plus, because it’s a cloud-based implementation, organisations need no longer be trapped by the financial burdens of expensive on-premise service and ongoing maintenance fees. 

While NetSuite ERP is a wise choice for businesses of many different sizes, onboarding is best achieved when supported by an experienced partner. Through a collaborative approach and phased release cycle, the right partner can get the NetSuite ERP up to full functionality while teaching a team how to use it the right way. 

To find out more about how NetSuite implementation can proceed accurately and efficiently, click the link below. 

Our NetSuite Implementation Services