ERP in the cloud: the pros and cons
13 Aug

ERP in the cloud: the advantages and disadvantages

In our private everyday life we use cloud-options have long been taken for granted and in more and more areas. Whether the Drobox, Google Drive or Apple I-Cloud ? Simply store content on the web servers and access it from anywhere.

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The offer is large and is also growing for the commercial sector. Of course, there are now also ERP systems in the cloud, such as SAP Business One on Demand. In the ERP world in particular, the cloud offer is still a marginal topic.
With constant development of the offers, it is worth taking a look at the advantages and disadvantages:

Pro:
Of course, a great advantage of Cloud ERP is its spatial flexibility. The system can be used at any time and from anywhere and is continuously supplied with updates by the server. This saves costs for a new version and the Cloud ERP system is always up to date.
In addition, the user of the Cloud ERP benefits from a very clear management of all data of the respective company.
Another pro is the possibility to 'rent' the system. This eliminates the risk involved in an ERP purchase.

Here are the main advantages once again:

  • Outsourcing the IT department (incl. admin and hardware) reduces costs
  • Worldwide availability
  • Low license costs
  • Secure data storage, as data is professionally backed up

Contra:
One disadvantage is that the offerings of cloud ERP providers are not yet as sophisticated as those of ERP software. This means that the user has to rely on the applications that are currently available. However, this area is evolving and there is likely to be an ever-increasing range of customised cloud ERP in the future. Whether then again on the other hand the cost advantage continues to shrink as each customisation leaves a shareable standard.
Moreover, the costs are only really present in the first period after installation. Depending on the installation, a purchase is already worth paying monthly rental fees for one to two years. However, since ERP installations are usually designed for more than 6 -8 years, this is a structural problem that is almost impossible to solve.
Another disadvantage ? or probably the biggest criticism of all cloud opponents ? is the external storage of data. The Security in the data centres cannot be completely guaranteed. In addition, company data can only be accessed via the internet. This is also not a completely secure connection.

Here are the main disadvantages once again:

  • Dependence on a secure internet connection
  • Browser capacities are often very busy. This can lead to frequent crashes
  • Expensive with a long term
  • None 100% Data security
  • Little flexibility to adapt to business processes

Conclusion
The ERP cloud options have a few advantages that are not to be neglected ? because it is very pleasant for the respective companies when the IT department can be reduced to a minimum and everything can be outsourced. However, a company also makes itself dependent on the service provider and Data security and data availability cannot be guaranteed one hundred percent. So you should definitely inform yourself about the security standards of the respective providers.
Last but not least, the providers still have to come up with really attractive pricing models for the usually long duration of ERP installations.

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