Your definitive guide to Cloud ERP, part 1: Removing the fog from the Cloud

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Categories: ERP, Replace old software
October 24, 2017
Cloud ERP

Cloud tools give your employees access to shared data and systems wherever they are and on any device.

Cloud technology is a critical transformative opportunity for businesses that rely on multiple users of multiple computing systems. Cloud-based services provide significant advantages for decision-makers, can reduce operating costs, and improve overall efficiency and integration.

Understanding the ways cloud computing can improve your business, the types of cloud services and how to best use cloud technology can help determine the best solutions for your organization.

Cloud computing refers to location-independent technology that uses remote platforms to deliver software services, storage, and systems. The technology allows for scalable IT systems growth and delivery models that allow for flexibility and customization.

In Your Definitive Guide to Cloud ERP – Part 1 – Removing the Fog from the Cloud, we take a closer look at how to understand the benefits of cloud computing and the types of functionality available.

The unknown versus the unknowable

Businesses want to mitigate risk and understand as many variables as possible when evaluating new business processes. The desire for cloud computing may seem good in concept but risky in practice.

However, cloud computing actually provides more certainty and predictability, especially for growing companies. Cloud computing allows for rapid scalability without the need for significant lags in technology deployment. It provides predictable financial planning with services that will grow as the company grows. It also provides your system administrators and IT teams with more flexibility to integrate systems in a shared space where software tools can more easily share information.

For companies with a high level of customized features in various software products, cloud computing allows for modifications to be delivered quickly to end users without the expensive tasks of individualized deployment and training.

Key advantages to cloud computing

Here are some of the core advantages to using cloud computing:

  1. Reduced computing costsWith cloud computing, there’s no need for large capital expenditures for hardware and software. Predictable technology costs allow for more accurate forecasting. In addition, cloud computing reduces the need for IT staff on premises to maintain servers, install software and updates and troubleshoot. Finally, there are fewer space demands for servers and utility costs for keeping server rooms cool and secure.
  2. ScalabilityWith cloud computing, your server, storage, and user needs can be addressed as your business grows. There is no need to overspend on unused capacity or to have expansion delayed due to the inability to expand infrastructure fast enough.
  3. ReliabilityCloud computing provides nearly always-on capabilities through built-in redundancies. Your data and systems are backed up so that server maintenance does not force your company’s systems to be offline very often if at all.
  4. Centralized dataCloud platforms allow for your data to be in one and accessible in consistent formats among multiple users. It also easily integrates data and reporting with common applications, such as Outlook and Microsoft Office. This provides one version of the truth because the data is centralized.
  5. Mobile access. Cloud-based systems make it much easier for employees to access systems and data from remote locations and from mobile devices. This flexibility, especially with remotely based consultants, employees or suppliers, means more efficiency and access. Collaboration is better, too, with teams located around the world able to work from the same information simultaneously and in real time.
  6. Greener operations. Your company’s carbon footprint is far less with fewer shared server space. There’s no need to install on-site systems in multiple locations, with the requisite cooling costs and environmental impact.
  7. Improved security. Top cloud computing providers offer virtual and physical security that would be costly for in-house operations. Redundant storage, top-flight data protections and backup plans and equipment to ensure business continuity give you peace of mind. Even in natural disasters, your company can continue to operate seamlessly from anywhere.
  8. Better customer service. With reliable systems and data, your team can respond to customer needs, issues and concerns promptly and in real time from multiple locations, multiple users and comprehensively.
  9. Simpler, faster deployment. Cloud solutions mean that new tools can be used faster, with less need for implementation time, build-outs, capital spends, and additional staff. Cloud resources can be deployed rapidly.

Types and functions of cloud services

There are several different models for cloud computing services. Here is a look at the major differences in types of cloud services:

  • Public. A public cloud is a bit of a misnomer but refers to those services where the computing infrastructure is shared among multiple clients of the providing cloud company. Servers, storage, and data are stored at off-site locations and the client has no physical control of the infrastructure. Public clouds are less expensive but run a higher security risk, given the higher number of users.
    Public systems are also not conducive the software systems that are highly customizable or need to be integrated with other packages.
  • Private. In private cloud structures, there is one client, customer or organization using the off-premises cloud services. The services are not shared with any other customer. Security is better with limited access to the cloud servers and data. This also provides more flexibility for customizations, plugins, and integrations to other systems.
  • Hybrid. Companies may choose to keep some services on-premises, such as customer service or financial systems, while other software tools may be stored on private or public servers. Others may choose to keep systems on a combination of public and private cloud systems.

Functionality is another key factor in determining which type of cloud services to consider. Here are the main functions that are increasingly migrating to cloud solutions:

  • Software as a Service (SaaS). If you use Gmail, Google Docs, Dropbox, or any number of other commercial services that provide access to applications and storage, you are using SaaS tools. Designed largely for end users, SaaS functions provide multiple users to access data and perform tasks. Some customer relationship management, project management, and financial management software packages are using SaaS delivery models. The advantages are considerable: IT staff don’t need to install updates on every end client machine or device, data is shared commonly and training can be delivered uniformly to all users.
  • Platform as a Service (PaaS). These services are used for application development and deployment platforms. When a company needs to use operating systems, programming languages, databases and web servers, this model is ideal and primarily used by developers. It allows for frequent operating system upgrades and collaborative programming development across multiple people or teams. Services can come from multiple sources and be integrated here.
  • Infrastructure as a Service (IaaS). This is the most common cloud structure. It provides ample storage capacity and virtual server space for companies to use for multiple functionalities.
Cloud ERP

Cloud computing offers cost and staff savings and flexible growth.

Enterprise resource planning and the cloud

For manufacturers, financial services companies and communications companies, enterprise resource planning (ERP) is a powerful option. With ERP systems, companies can integrate systems across the company, from marketing and sales to finance to operations to distribution.

Cloud ERP is growing among manufacturers. A seminal Gartner study that examined cloud ERP adoption through 2023 had some powerful findings:

  • 47 percent of organizations expected to move to cloud ERP solutions by 2019. Twenty-six percent expected to have cloud ERPs by the end of 2016.
  • Small and midsized companies were embracing cloud ERP solutions at a greater rate than larger entities.
  • Cloud ERP adoption within five years was highest among organizations based in Asia and the Pacific Rim (more than 60 percent), followed by North America (55 percent) and Europe and the Middle East (50 percent).

There are occasions when on-premises ERP solutions make sense. In some cases, regulatory requirements disallow off-site installations. If users have limited or slow internet access or there are extensive customizations, then an on-site solution is also likely the better option.

Consider, however, the technical advantages of a cloud ERP solution. As the below chart indicates, the ease of use, costs, and flexibility are significantly improved in the cloud.

 Technology On Premises Cloud
Mobile devlces Retrofiting for limited functions Built-in functionality
Hardware On-site Remotely stored
Hardware maintenance Your responsibility Provider responsibility
Addtl. hardware capability You purchase upgrades Included in subscription
Application software Installed on your servers Provider responsibility
Software maintenance/upgrades Your IT team installs, manages bug fixes Provider responsibility
Preferred deployment On your servers On provider servers
Optional deployment  None In private cloud or on your servers

 

We work closely with companies to identify their ERP needs and recommend the proper and appropriate solution. Our consultants have deep product knowledge of many ERP solutions, including top options such as Sage X3 Cloud, Acumatica Cloud, and Microsoft Dynamics 365.

If you’re considering a cloud ERP solution for your company, learn how NexTec can help you find and implement the right product for your needs. For more information about NexTec, download the NexTec Corporate Brochure.