ERP… Cloud vs. Traditional

What is cloud ERP and why is it better than traditional ERP?

Once you’re in the market for an ERP solution for your business sooner or later you’re going to have to choose whether to have one installed in your offices or whether to use the more modern subscription based Software-as-a-Service (or ‘in the cloud’) approach.

The traditional solution means finding and approaching vendors who will make you an offer in order to install and customize their desktop based (mostly PC-based) solution for your particular business needs – usually charging per user or installation plus monthly or yearly support fees.

Once there, you have to devote (your or your employees’) time to learn the new way of handling things and later spend more for maintenance and extensions to it. You do keep the advantage that all your data and its handling is in your hands instead of an external party. However, that may also become a disadvantage: you’re the only one responsible if something goes wrong or you have to call external help to handle it.

The past couple of years the tables have turned and it’s much easier, more flexible, cheaper and generally more efficient to allow your business to benefit from improved organization. These days the sensible thing to do is to look for a cloud-based ERP solution. This practically means that you don’t install anything in any of your company’s servers but rather you buy a subscription-based license to run an already installed package running securely somewhere on the internet. Moreover, the software runs from any web-browser so you can even access it from your smart phone or tablet device.

Without going into too much technical detail though, it most importantly means that somebody else takes care of pretty much everything non-core. All the installation, customization and maintenance troubles go away which is a huge gain as it allows the employees to focus on work itself and not the tools. And – assuming your cloud ERP vendor has built an intuitive and quick to learn system, all you have to do is just choose a vendor and import the company’s data (also a largely automated process).

Overall cost is much lower this way and you get ‘for free’ what is complicated and expensive in the traditional method: the capability to use the ERP regardless of your physical location. So if your business has a number of venues spread across the country or countries, e.g. a number of shops with separate warehouse locations, you can benefit from a cloud based ERP for a fraction of the cost you would need with the traditional approach.