Cloud ERP software is an integrated suite of applications ran in a hosted environment and accessed with an internet connection. A type of ERP software that is dedicated to operating your business processes “in the cloud”, cloud-based ERP provides 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, cloud ERP options can meet all business processes, including financial management, supply chain management, inventory management, project management, human resources, and more.
Cloud based ERP solutions have grown in popularity due to it’s lower upfront costs. They are traditionally billed on subscription-based pricing models, which means their costs are stretched out over the course of ownership, rather than through a heavy upfront investment. Cloud ERP software also gives businesses a fully functionality solution out of the box and typically requires less customization.
Cloud ERP solutions will provide you with the same features as a locally hosted enterprise resource planning (ERP) option with an increased level of accessibility. Examples include:
What are the benefits of cloud ERP solutions versus on-premise ERP software? Given the remote accessibility of the systems, one may look to real-time collaboration on documents, or the ease of access using a mobile device such as an iPhone or Android device. Understanding the differences between cloud ERP and other ERP systems will allow you to compare the pros and cons and decide what is right for your business.
Most ERP software implementations can take anywhere from 12 weeks to 2 years, depending on how complex your needs are, the number of users that require training, and the level of customization required. For cloud ERP software, the implementation times are much faster. In-fact, a web-based ERP software can be configured in as little as 24 hours. Less time on implementation means your business will have more time to focus on businesses processes that improve your bottom line.
Your ERP system contains some of your most critical business information surrounding your company financials and sales data. Keeping this data away from the wrong individuals is crucial to the success of your business. For this reason, many businesses may hesitate towards keeping their data offsite–the case for many cloud hosting providers.
Most cloud ERP software providers will offer enhanced security measures that protect your data. You’ll want to vet your cloud vendors to ensure they have secure hosting environments. Many, if not all, cloud ERP vendors have been forced to develop advanced security in order to avoid losing business to other more established vendors.
The positive to all of this is the availability of 24/7 support. Cloud-based ERP software allows for easier fixes through the use of remote access, meaning your problems can be fixed easier and won’t always require someone to come out on site.
Many small businesses want their ERP software to handle all of their needs, while only paying the price of an out-of-box software such as QuickBooks Online. Unfortunately, many businesses will run into a common conundrum: Do you purchase a less expensive solution now and upgrade in a few years, or do you purchase a more expensive but scalable solution that your business can continue to grow around?
The second option will allows be the most affordable over time while allowing you to develop a great relationship with an ERP vendor. However, businesses may be turned off by the initial start-up costs for implementation and training. But having the right cloud ERP software put into place from day 1 will mean your business will grow and scale appropriately. As new employees come into your company, or as you grow your list of vendors and customers, you won’t have to install new hardware or deal with expensive upgrades.
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.
Shopping for ERP software can be overwhelming due to the significant time investment and costs behind an ERP implementation. Because of this, it begs the question: “What are the best free cloud ERP solutions?” With this question, your business will also want to ask if it’s worth implementing a free software in light of any perceived drawbacks, such as a lack of support, or a software that is limited in functionality.
Generally a free ERP may be a slimmed-down version with basic functionality–intended to get customers in the door and upgrading to a paid version once needed. However, there are examples of truly free open source options:
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 small business 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.
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: