Cloud ERP software overview – All you need to know about implementing a better business structure

The development in digital technology has risen up quite drastically at a global level.

Industries around the world are leaning towards technology centric processes for execution of even simple daily tasks. The use of modern technology is enhancing the enterprise workflow in terms of efficiency, productivity and swiftness.

But along with this development, it is also raising the competition bar among the enterprises, a scale higher.


As per the business reports,

56% of CEOs have experienced revenue growth after implementing digital strategies.

76% of companies invest in potential technologies for their business.


Organizations that are looking to modernize their business with an optimal user experience have found immense profit in advanced digital technology of cloud ERP software.

Enterprises have started to realize the power of transforming their business and investing in high grade digital softwares for achieving better performance.

Thus, businesses are ready to upgrade every aspect of their enterprise operation including the management part, from the less efficient traditional tools to such high performance digital cloud.

In this article, you will be getting your hands on the dense knowledge about the Cloud based ERP software for building a smooth business ecosystem.


Here are the takeaways from the article:

  • What is Cloud ERP software?
  • History of ERP software
  • Important concepts associated to cloud ERP software
  • Difference between cloud based ERP software and On-premise ERP software
  • Benefits of cloud ERP software
  • Benefits of on-premise ERP software
  • Conclusion


What is cloud ERP software

The term ERP stands for “Enterprise Resource Planning”. 

As the name indicates, it is a combination of processes  such as planning, executing and managing various tasks of your business.

Cloud ERP software is a digital cloud technology that streamlines every task of your individual departments around the enterprise, empowering you to manage and execute the workflow effortlessly from a centralized hub.

For accessing this ERP software on the cloud you only need an efficient internet connection, giving you the power to carry-on with your work from any remote location.   

The main role of cloud ERP or any business software is to reduce the hassle occurring in the workflow management, promoting best-in-class service to the customers.

Let’s travel a little back in time to the ERP software and see it’s astonishing evolution into Cloud ERP software and also understanding the concept in a better way.

History of Cloud ERP software

The invention of ERP software was made for simplifying the issues in the manufacturing industry, specifically in the inventory section. 

The term “ERP” was coined in the year 1990, by Gartner but it’s roots go back to the year 1960 when it was used for inventory management and was named as MRP (Material Requirement Planning).

The year 1970 was the year when industries started using the MRP even more and by 1980,  additional capabilities such as scheduling and managing production processes were also included to the system. This version was known as MRP II

With time the software became much more advanced, paving it’s way beyond inventory management and entering into accounts, sales, purchase, finance and much more.

Now, the technology of ERP has escalated it’s growth to a virtual world where enterprises do not need a physical tool to manage their business workflow but just the internet.

The modern cloud ERP software even let’s you integrate multiple applications to it, providing you a 360-degree management solution.

Important concepts associated to Cloud ERP software 

There are numerous concepts that are related to the Cloud ERP software but you don’t need to worry about them all.

We will be discussing only the most prominent ones that you will frequently come across.

They are as follows:

  1. Cloud-based ERP :- ERP software that is implemented outside your enterprise perimeter on cloud and is updated, serviced by the vendor by which you purchase.
  2. On-premise ERP :- ERP software that is implemented within your enterprise perimeter but all the tasks (software update, maintenance, back-ups, etc) are completely managed by you.
  3. Saas service :- The term “Saas” stands for Software as a Service. Every software that is rented as a service can be included under this category.
  4. ERP Implementation strategy :- This is a methodology consisting of resources, techniques that is required for implementing the ERP software successfully for optimal performance. 
  5. Security and compliance :- It consists of a set of tools, guidelines and everything responsible for securing the enterprise data with strong encryption.
  6. Cloud computing :- It is the on-demand availability of system resources that includes cloud storage, processing power without the direct involvement of the management by the user. In simple words, it is the effectiveness of the software to execute tasks.
  7. ERP integration :- The ability of the software to integrate multiple applications for accelerating the pace of workflow.
  8. Workflow automation :- It is the process of scheduling your repeated tasks to the time when you want it to be executed. This eliminates the manual processes making the workflow automated.

Difference between cloud ERP software and On-premise ERP software

Cloud ERP software and On-premise ERP software both have their pros and cons. Opting for one of the technologies depends upon the goals, objectives and needs of the organization.

Let’s put some light on both the ERP software for better clarity. 

So, you can make the right choice.

We will be comparing both cloud ERP software and On-premise ERP software based on 6 parameters and they are as follows:

  • Complete ownership cost
  • Software updates and maintenance
  • Procedure for deployment and implementation
  • Power of Integration
  • Security and compliance
  • Performance delivery

Complete ownership cost

  • Cloud ERP software
  1. Subscription based-pricing
  2. No extra cost for hosting, server, software updates and maintenance.
  3. No additional fees for implementation and training.
  4. Lesser cost as compared to On-premise ERP
  • On-premise ERP software
  1. Charged as one-time fees
  2. You are responsible for the costs incurred in hosting, server, software updates, maintenance and also processes.
  3. Additional fees for implementation and training.
  4. Hidden costs that occur in the process.

Software updates and maintenance

  • Cloud ERP software
  1. Maintenance and software updates are maintained by the vendor.
  2. No IT staff or any technical knowledge required for running the operations.
  • On-premise ERP software
  1. You are responsible for maintaining and updating the software.
  2. Full-time IT- administrator required.

Procedure for deployment and implementation

  • Cloud ERP software
  1. Easily accessible via mobile applications and internet browsers.
  2. Faster deployment as the system is on cloud.
  • On-premise ERP software
  1. Deployed on your local computers and servers.
  2. Slower deployment as compared to cloud ERP software.

Power of integration

  • Cloud ERP software
  1. Simple and quick integration of third party applications.
  2. No technical knowledge or IT assistance required.
  • On-premise ERP software
  1. Customizations available but require major changes to be done.
  2. IT administrator required.

Security and compliance

  • Cloud ERP software
  1. Data is strongly encrypted and complies to PCI DSS standards.
  2. Security is upgraded and enhanced with every software update.
  3. Data can be easily restored with back-ups in case of any accident.
  • On-premise ERP software
  1. Exposed to security risks as data is stored locally.
  2.  Data needs to be monitored manually.
  3. Additional costs in hiring staff.


  • Cloud ERP software
  1. High-grade network and server performance for dynamic delivery.
  2. Easily adapts to network and server changes.
  • On-premise ERP software
  1. The network and server performance is not dynamic as cloud ERP software.
  2. Changes in network and server demand surges can cause delay.

Benefits of Cloud ERP software

  • Free from the hassle of maintaining computing infrastructures like hardwares and data servers. Basically it gives you relief from hiring a specific IT department for it.
  • Implementation time is less as compared to On-premise ERP systems.
  • Swiftness is more prominent in cloud applications.
  • Complete security for your data with an option for data back-up along with a data recovery plan.
  • Access to the data from any remote location on multiple platforms.
  • Real-time data updates.

Cloud ERP makes it possible to carry on your work from any remote location without any requirement of implementation of hardware or software.

Also with the provider handling all maintenance and updates of the system, more time is available for other important stuff of the organization.


Benefits of On-Premise ERP software

  • Eliminates the on-going costs to a great extent.
  • No need to rely on the service provider for your system as it is operated from your space.
  • On-premise serves as the base for future hybrid cloud expansion.
  • Complete control over the organization’s data.
  • A vast customization options.

Conclusion: So, which ERP software your enterprise must opt for? 

Now, this depends on various things such as your business size, goals, objectives and so on. 

But above them all, it has to be cost efficient.

As seen from the parameters and benefits, On-premise ERP software clearly has some major costs that incurs as you proceed with the process.

Opting for such software might not be a problem for large enterprises as they have the resources and a dedicated team for it, capable of covering all the requirements internally.

But when we talk about the businesses falling under the SMEs category, this is clearly not the choice.

The cost incurred in On-premise ERP software is not feasible for SMEs as this requires major investments of both capital and time, making your workflow less productive and unparalleled to your set goals.

If your enterprise comes under the SMEs, then Cloud ERP software is the right choice for your business as it provides you the highest optimal performance at a dynamic rate.

So, whether to choose a cloud ERP software or a On-premise software totally depends on the requirement and size of the enterprise.

Thus, while searching for an ERP system, it’s necessary to keep above facts in mind. This will help you to select the right software that will serve you well in the long run.

We hope the above information will help your business in a significant way. 

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