All sizes of businesses around the world are using data and programs like cloud ERP to become more efficient. It allows them to react quicker to market changes. Despite this revolutionary way to run a business, cloud ERP has yet to be widely adopted.
Despite the efficacy of the industry, it is not widely adopted. The resistance to it has nothing to do with the technology but is due to the fact that business owners don’t understand what the cloud is, much less ERP is, and how the two can benefit them.
In truth, understanding cloud ERP requires some patience. It takes time and study to grasp how computer infrastructures work, which is often too technical for most busy business owners to completely grasp.
The industry consists of two features:
- First, using cloud technology rather than on-premise technology.
- Second, using ERP software rather than non-integrated software for each department.
Let’s start with defining why using the cloud makes all the difference.
Why is Cloud Computing a Revolution?
Let’s start by understanding what makes cloud computing a distinct improvement over traditional computer system and networks.
In order to grasp that cloud computing is a revolution – a major shift from the traditional ways of computer systems – let’s take a look back to a similar pivotal moment of technological change in history
In the 1890s, factories had a fuel-consuming, smoke-belching power generator, serviced by grey-suited boiler men who did their best to service it. When the power generator worked, then the factory ran smoothly. However, when the power generators went down — which was often — everything ground to a halt and the entire factory came to a standstill.
Then in 1900, the Edison Power Company in Chicago provided a way to generate and distribute power on a grand scale to businesses. Power was now cheaper, more reliable, and cleaner than the power generators in factory basements. In essence, businesses were now outsourcing their power rather than wrestling with their own power generators.
By the 1920s, most businesses had switched to using this new model of electric power. It didn’t make sense to use the old ways of generating power any longer. It was expensive to run, broke down often and was far less efficient. It was also messier, often causing everything to be covered in soot.
A similar revolution is now happening with computer technology.
Currently, a majority of businesses still build and manage their own costly on-premise computer facilities. They also have to hire an IT department to make sure everything runs smoothly.
Cloud computing changes the entire scene.
If on-premise infrastructure is similar to power generators, then cloud computer providers are similar to Edison’s Power Company. Cloud computing is more cost-effective, secure, reliable, and better managed than traditional on-premise computer systems because it provides infrastructure as a service (IaaS), platforms as a service (PaaS), and software as a service (SaaS)on a rental basis.
What is Enterprise Resource Planning (ERP)
Enterprise Resource Planning (ERP) is the perfect software for managers. It consists of a bundle of applications that automate management, data collection, and storage. It makes it easy to interpret the information flowing in from various departments like accounting, inventory, and marketing and sales.
An ERP manages the flow of internal and external business information in a company by using frameworks to manage commercial operations.
Here are some examples of its practical frameworks:
- · Inventory management
- · Planning
- · Finance
- · Accounting
- · Human Resource
- · Sales
- · Marketing
Each framework consists of a module that covers core operations.
For instance, the sales module will include:
- • Inquiries
- • Order placement
- • Order scheduling
- • Dispatching
- • Invoicing
It will even go so far as to cover stock transfer between warehouses when necessary. In other words, all the broad steps of a sales cycle are covered by this module.
All the modules can also be seen as a whole system, which allows management to analyze records, benchmark for better performance, and make data-driven decisions to guide policy.
Benefits of Cloud ERP
The advantage of having all business processes arranged in a logical, computerized system is a huge competitive edge over companies that use diverse software. A company that knows the metrics of all its operations will beat out any company that is still using traditional software methods to keep track of their myriad business operations.
- A business will decrease its operating costs because they no longer need to pay for on-premise computer facilities and the technical staff to support it. The company only has to pay a flat-rate fee every month.
- A business will be able to manage, interpret, and access all the key information it needs to make real-time business decisions that align with market trends.
- A business will be able to increase its security. It can restrict authorization of information within the company on a need-to-know basis, and it can restrict outside sources from accessing its information. In the event of a natural disaster that affects a business premise, it will not lose its priceless data.
- A business can get all the technical support it needs 24/7 should there be any issues with the software.
Cloud ERP adds enterprise resource planning to cloud computing infrastructure, platforms, and services to make business more efficient. It is now no longer a herculean task managing manufacturing and service companies.