Cloud ERP software is an integrated suite of applications that help manage your business, ran in a hosted environment, and accessed with an internet connection. Cloud ERP software options provide real-time access to your data by offering access to multiple types of devices that span different on-site and off-site locations.
Cloud deployment can also be referred to as Software-as-a-Service (SaaS) and is in contrast to a traditional on-premise or locally-hosted deployment that operates on a company’s own infrastructure. Like a traditional enterprise resource planning system (ERP system), cloud ERP options can meet all business processes, including financial management, supply chain management, inventory management, project management, human resources, and more.
Cloud ERP is growing in popularity due to fewer barriers to entry:
Cloud ERP software will provide you with the same features as a locally hosted option, with a focus on:
|Financial Management||Includes standard accounting such as a general ledger to monitor income and expenses.|
|Inventory Management||Manages inventory costs, monitors stock levels, prepares purchase orders, creates pick and pack lists, provides traceability, and more.|
|Supply Chain Management||Tracks your products from ideation to receipt by the customer. Includes order management, bill of materials, warehouse management, and material resource planning (MRP).|
|Customer Relationship Management (CRM)||Provides basic management of prospects and customers and marketing efforts. More robust options are sold as a stand-alone.|
|Business Intelligence||Provides basic financial reporting as well as analytics and dashboards related to other areas of business. More robust options are sold as a stand-alone.|
Cloud ERP software will require a month to month service cost to maintain the use of the software. Some software options advertise costs as low as $40/month/user to get started, such as Dynamics 365 Business Central.
To determine how much your business will pay, you’ll want to consider how much you’ll need of the following:
With cloud ERP software, your business is not only paying for access to the software, but also a variety of services (listed above). The convenience of paying for the software over the course of ownership, rather than as a bulk upfront purchase cost, is one of the most distinct advantages of cloud ERP software pricing. That also means there are little to no hardware costs, which also means you won’t need to pay staff to maintain complicated hardware.
Odoo is an open source cloud ERP software that provides developer and community-built apps with popular shipping and e-commerce integrations. Odoo provides free access through their community version and offers free applications through user communities online. However, official Odoo apps will come at a cost. Odoo apps can range anywhere from $12-24/month.
ERPNext is an open source software that is 100% free to get started with IF you are self-hosting the solution. If you require ERPNext to host the solution (and if you require support) you’ll need to look at their paid options. Their paid versions start at $5/user/month and all versions have a 14-day free trial. Whatever route you take, ERPNext will provide a wide variety of functionalities which includes accounting, HR & payroll, manufacturing, sales and purchasing, and more.
The difference between a cloud ERP software compared to its on-premise counterpart is the ability to be modular, flexible, and of course mobile.
Cloud ERP that is modular will allow you to add on applications (modules) at your own pace. These options will be priced accordingly based on how many applications you have. As your solution operates in the cloud, upgrading (adding on functionality) down the road shouldn’t include a long or complicated upgrade/install process.
A flexible cloud ERP software will give you the freedom to add and remove functionality as you need. For example, it will adapt to changing product costs, payment acceptance methods, and changes to your shipping methods. If customers are letting you know your quote to invoice process is slow or redundant, you’ll need your software to adjust to meet customer demand. The bottom line is that your company can respond appropriately to market feedback.
Being mobile is a feature that must be utilized with a cloud ERP system. Mobility lets your employees access data anywhere and from any device. This is good for employees working from home, as they require no software installation to their device being used outside of the office. In addition, workers in the field who need quick access to financials, sales orders, or project management capabilities can easily bring up what they need to review, sign off on, approve, and more.
When a small business has outgrown the needs of their online accounting system, they will look into purchasing additional software to meet increased financial, production, or operational needs. Cloud ERP software provides a fully-integrated approach rather than attempting to integrate the capabilities of multiple systems.
To determine if cloud ERP software is the best choice to run your business, you’ll need to ask yourself the following questions:
For small businesses looking to make the jump to a cloud ERP option, security, ease-of-use, and pricing will be the biggest deciding factors in choosing the right option.
Security: Cloud ERP software stores your data online (in the cloud), so you’ll need to be comfortable having your data stored off-site, or not within the confines of your own company’s network. This is usually at a hosting site owned and managed by the software developer, but can sometimes be a 3rd party such as a reseller who offers their own cloud hosting environments.
Ease-of-use: Most cloud ERP software is geared for use by multiple departments with varying backgrounds, and doesn’t require an extensive background in information technology.
Pricing: Cloud ERP systems are billed on a subscription-based pricing model, meaning you’ll pay on either a monthly or annual basis to have access. There may also be upfront costs for services such as implementation or training, depending on how complex your needs are.
To determine the level of security, the ease-of-use needed, and the price ranges you should look into, you’ll want to ask the following questions: