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What is Cloud ERP? The essential facts you need to know

Even five years ago, most businesses looked doubtfully at Cloud ERP. Too risky, they judged. Too much of a leap in the dark, technology-wise. Great for startups wanting a low-cost ERP solution from day one—but not appropriate for established businesses.

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And so on, and so on. Yet turn the clock forward to today, and Cloud ERP is fast gaining traction. Suddenly, businesses have realised that Cloud ERP is probably less risky than traditional ERP solutions, offers higher uptime, not lower; is more secure, not less secure; and—above all—holds out the prospect of significant cost savings.

And yet, confusion still reigns. A blizzard of jargon and strange terms hinder any conversation about Cloud ERP.

So for many businesses, the critical question surrounding Cloud ERP is a very simple one. Just what is it?

What is Cloud ERP? It’s not ‘on-premise’

One simple way to define Cloud ERP is by looking at what it isn’t. In other words, it isn’t ‘on premise’, as the jargon has it.

On-premise? No mystery there: it simply means that the server running your ERP system is remotely located ‘in the Cloud’, and not on your own premises, as before.

Why does that matter? Because your business doesn’t have to buy that server as a piece of physical capital equipment, in short. You don’t have to pay people to manage it and maintain backups of its data. And you don’t have to buy—as an item of capital expenditure—the requisite software licenses to run your ERP software.

Add it all up, and it can amount to quite a saving—which is especially useful for cash-constrained businesses that would like to spend their capital budgets on value-adding equipment and machinery, and not on computer hardware and software.

What is Cloud ERP? It’s ERP as a service

Virtually all instances of Cloud ERP involve Cloud ERP running ‘as a service’. In other words, your business doesn’t own either the server or the ERP software: you pay a monthly subscription to run them as a service.

A term you’ll often encounter to describe this is ‘Software as a Service’, or SaaS. More correctly, perhaps, when you’re running on remote hardware—primary server, backup server, and perhaps a fallback data centre—you’ll also often hear the term ‘Infrastructure as a Service’, or IaaS.

That said, the distinction isn’t critical, and it’s certainly not wrong to describe Cloud ERP as SaaS—in fact, you’ll find that many people do just that.

What is Cloud ERP? It’s a newer and better ERP.

We’ve already touched on the financial advantages of Cloud ERP, but it’s worth summarising them.

Simply put, instead of paying out big lumps of capital expenditure for your ERP hardware and software, you’re paying for your ERP system out of month-to-month operating expenditure and operating cashflows.

It’s a level of affordability that many businesses like. But it’s a business model that also generally gives rise to an improved, newer and upgraded ERP system, as well.

That’s because instead of being forced to wait ten years or so to upgrade an ERP system—by which time it will usually be semi-obsolete—the upgrade cycle can be much more frequent, as the impact on the monthly subscription that you pay will be small.

What is Cloud ERP? It’s available from Kerridge Commercial Systems now

Some of our customers still prefer the traditional on-premise ERP model, but a growing number prefer the Cloud ERP model, of which we offer a number of variants.

How do you move to Cloud ERP? Simple: talk to us. To find out more, get in touch and I'll be happy to answer any of your questions.


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