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April 10, 2016
SME'S in the developing nations are the most aggressive adopters of ERP to their business process. The online server hosted off the site is best suited for such growing SME's because the payment needs to be made in accordance with their need and usage. Using a cloud-based ERP server reduces the capital expenditure by not investing money in the server infrastructure.
When the different functions of ERP such as CRM,HR etc. are hosted in different clouds, separate administration of different systems costs time and money. The use of the required function in an integrated cloud reduces the expense and increases the efficiency of the business process. The server and software package providers pitch their marketing skills to which SME's fall as a bait which ends up making the business go the downward spiral.
To be successful and to outgrow the competitors every business has to deliver the highest quality on time and quickly possible at the cheapest cost. Hence, every SME who is the planning stage on wheater to adopt an ERP package should think in detail of what the outcome and benefits would be in a long run
Arjun Sunil Kumar
April 19, 2015
Cloud is evolving and expanding to include more intelligent systems. As they continue to develop they will eventually gain the ability to perform as good as in-house ERP systems. With current development level, Cloud ERPs are most suitable for SMS who are sensitive to cost and can make the trade off between cost and security regarding data management issues. A more detailed comparison between cloud ERP and in-house ERP systems are as follows.
Cloud systems are maintained by 3rd party providers. This helps to reducte the implementation costs drastically. On the other hand, traditional ERP systems require servers, extra module costs, operating systems, database management systems and further training and consultant costs to maintain the system. On the other hand, maintenance for cloud systems are automatically done by the provider and updates come with no cost. However, cloud systems have subscription fees and sometimes they may become more costly than traditional ERP systems on the long run.
Cloud systems are genarally more agile systems. They minimize the time needed to deploy and implement systems. Traditional ERP systems require significantly more time for implementation plus employee training and change management issues.
3- Processing Speed
For this factor, the ByDesign(cloud ERP) of SAP and ECC 6.0 are compared. Cloud ERP is significantly more faster than traditional ERP. The actual results can be seen from the table below.
All in all, cloud systems outperform traditional ERPs nearly in all criteria(implementation cost, implementation time, processing time and flexibility to work in different areas). Cloud ERPs lack the desired security in traditional ERPs as the data storage system is outsourced to 3rd party providers. However, implementing an ERP system is an objective decision making process, as long as companies objectives do not contradict with security issues, it is highly advised to make the tradeoff between cost, time, processing speed, flexibility and security.
Elragal, A., & Malak, K. E. (2012). In-House versus In-Cloud ERP Systems: A Comparative Study. Journal of Enterprise Resource Planning Studies , 1-13.