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The Lesser Understood Advantages of a Cloud ERP System | @CloudExpo #ERP #Cloud

There are a number of reasons that push enterprise businesses towards a cloud-based ERP system

There are a number of reasons that push enterprise businesses towards a cloud-based ERP system. Cost is definitely a big factor. Unlike legacy ERP systems that can cost several hundred thousand dollars in capital expenditure, cloud ERP is relatively a lot more affordable. They are also viewed as a lot more stable given that the data is stored on decentralized servers. But besides these, moving your ERP to the cloud can bring in a number of other lesser understood benefits.

Customization
At the outset, legacy ERP systems may appear to be more suitable for customization. This is because software hosted on your own server is under your control and may be tweaked as much as you like. However, customization of software comes at a cost and hosted ERP requires a dedicated IT team that can work on these customization requirements. Depending on your business needs, this could work out to be quite expensive.

With cloud ERP on the other hand, customization is quick and easy. Most of the cloud ERP providers offer the ability to integrate their systems with third party tools and features. As a customer, you do not have to really invent the wheel and could instead integrate your ERP with third party APIs that meet your needs. This is both cheaper and quicker to deploy.

Security
Cloud computing has garnered a lot of attention in recent years over the multiple cyber-attacks that have left millions of confidential data exposed and lost. This has made prospective new customers wary of the cloud when it comes to data security. Contrary as it may sound, your ERP data is a lot more secure on the cloud than it is on your hosted legacy system. The primary reason is that unlike hosted systems, ERP in the cloud is decentralized and encrypted over the web. Also, the scale of operations make it possible for third party cloud hosting providers to deploy the kind of data security measures that may seem prohibitively expensive for a standalone entity. This makes it harder for a prospective hacker to break into your cloud ERP system compared to a hosted server.

Control
Hosted ERP systems are generally viewed favorably when it comes to the control they provide the customer over the backend systems. Cloud ERP systems require customers to contact the support team of the service provider and this may take time. While this is true in theory, the ground reality is that cloud based systems host hundreds of customers and this enables these service providers to deploy advanced systems to monitor and track performance of their server every moment. As such, the number of issues that one may encounter with their ERP gets dramatically reduced when you run a cloud based ERP compared to hosted legacy systems.

This is not to say that hosted ERP systems do not have their advantages. There are some industries (like banking and healthcare) where government regulations prevent data from being hosted on third party servers. In such cases, businesses may either choose to go with a hosted ERP or pick a hybrid system to host their data. Alternately, there are also a number of HIPAA-compliant cloud services that serve ERP to customers. In the end, businesses must pick an ERP system that is right for their users. If the growing adoption of cloud ERP is any indication, businesses have come to realize the benefits that these systems provide.

More Stories By Harry Trott

Harry Trott is an IT consultant from Perth, WA. He is currently working on a long term project in Bangalore, India. Harry has over 7 years of work experience on cloud and networking based projects. He is also working on a SaaS based startup which is currently in stealth mode.

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