Answers to the most frequently asked questions around cloud ERP.
As more companies move to the cloud and cloud-based ERP solutions, you might be wondering whether cloud ERP is right for your business. But first, you've got questions. We've rounded up some of the most commonly asked questions about cloud ERP in this blog post.
1. What is Cloud ERP?
Cloud ERP is an enterprise resource planning solution that is hosted in the cloud. Typically, the vendor hosts and runs the cloud ERP solution in their cloud platform, and companies can access the solution on any device through the internet. Cloud ERP is often offered on a SaaS (Software-as-a-Service) model where you pay a certain fee monthly or annually to use the software.
📌 To learn more about cloud or SaaS ERP, check out our post, "What is SaaS ERP?"
2. What is the difference between cloud ERP and on-premises ERP?
The main difference between cloud ERP and on-premises ERP is where the solution is hosted and who is responsible for managing in. In a nutshell, while cloud ERP solutions are managed and hosted in the cloud by the vendor, on-premises solutions need to be hosted in-house, and all the maintenance, upgrades, and security fall to the company.
📌 Delve into the differences in this blog post "Weighing the Pros and Cons of Cloud ERP".
3. Are cloud ERP and cloud hosted ERP the same?
No. Cloud ERP is a 'true cloud' solution. That is to say; it is a multi-tenant solution that was built specifically for the cloud. With cloud ERP, all the maintenance, security, upgrades, and backups are managed by the vendor and it is hosted on their public cloud. Hosted ERP is a single-tenant solution and is not a true cloud solution. This is when you take your current on-premises ERP software and host it remotely on a private cloud. In this scenario, you get some benefits of the cloud, but not all. Plus, hosted ERP is more expensive than cloud ERP as you are responsible for the security, virtual infrastructure, and maintenance.
4. Is a cloud ERP solution expensive?
Cloud ERP is much more cost-effective than on-premises ERP solutions, making it an ideal choice for small and mid-sized organizations. In fact, one of the main benefits of cloud ERP is its lower up-front and operating costs. The subscription model means you don't need to pay a hefty fee upfront to purchase the software. Your operating costs are also lower than on-premises because cloud ERP does not require in-house servers, hardware, IT staff, and ongoing maintenance that an on-premises solution does.
📌 What are the costs of ERP for a small business? Check out our post "Can your small business afford an ERP solution?" for more insight.
5. How does cloud ERP licensing work?
Most cloud ERP solutions work on a subscription model, where you pay a monthly or yearly fee which is generally based on the number of users that will use the system. When it comes to licensing the end users, it is either done on a concurrent licensing model or a named user model.
📌Learn more about these two licensing types in our article, "Concurrent Users vs. Named Users Licenses: What's the Difference?"
6. Is a cloud ERP solution difficult to implement?
Cloud ERP can be implemented easily and, in less time, than on-premises solutions. With the right ERP partner, Cloud ERP implementations are typically fast and painless. And according to a Forrester Total Economic Impact Report, cloud ERP implementation costs are an estimated 30% to 50% less than that of on-premises ERP. With cloud ERP, small and mid-sized businesses can also consider lean or fixed-fee implementations to further constrain their implementation costs.
📌 Find out if a lean or fixed fee implementation is right for your business in our post "Which ERP Implementation Type Should You Choose?"
7. Do cloud ERP solutions need regular updates?
This is probably the best part about cloud ERP. Patches and software updates occur automatically in the background and are handled by the vendor, so you're always using the most up-to-date version. You also don't have to spend time and money updating your system on your own, like you do with on-premises ERP. With cloud ERP, the costs of upgrades is typically included in your subscription fee, so there's no additional expense.
8. What are some other benefits of cloud ERP?
Besides the lower costs and rapid implementation, cloud ERP has numerous other business benefits. For one, cloud ERP helps businesses scale their operations easily, making it an ideal solution for a growing company. It offers accessibility and mobility, allowing your team to access the data and tools they need from anywhere, at any time, on any device. This makes for a more agile team and improves collaboration and productivity.
📌 For more details, check out our blog post on the top 6 benefits of cloud ERP.
9. Is my data safe in a cloud ERP solution?
If you select a cloud ERP solution from a reputable vendor, it's likely that the security and compliance features and requirements in place are even more secure than your existing on-premises solution. For instance, a vendor like Microsoft invests over $1 billion each year on security and offer enterprise-level security tools to all its customers.
📌 To learn more about Microsoft and the security features within Dynamics 365, check out our article, "Security in Dynamics 365: How Safe Is Your Data?"
10. Do we still own our data with cloud ERP?
Typically, with cloud ERP solutions, you still retain the ownership of your data. For example, in the case of Microsoft, if you use any of their cloud-based Dynamics 365 solutions to run your company, you still own your data. Microsoft merely acts as a custodian and protects your data, and it is never shared with third parties for advertising or marketing. However, if you are unsure, this is a vital question to ask when you are evaluating cloud ERP solutions during the selection process.
11. How can cloud ERP help with business continuity?
Most cloud ERP vendors offer robust disaster recovery and backup plans to help ensure the continuity of your business. With the cloud, your data is securely stored in an off-premises location and available instantly in the event of a man-made or natural disaster. Cloud ERP vendors also provide their uptime guarantees and what happens in case there is a system failure on their end. For the most part, this is rare as most providers guarantee uptimes of 99.9%.
📌 Considering cloud ERP? Check out the 5 key factors to keep in mind when migrating to the cloud.
12. Can we further customize a cloud ERP solution?
Customization is not as simple in cloud ERP as with an on-premises solution since you can't customize the actual code. However, there are still ways to customize your solution, if required. For instance, Microsoft's cloud-based ERP solution, Dynamics 365 Business Central lets you add extensions (which are separate from the core code). This means even if you've created your own extension or added an app from the Microsoft AppSource, there is no risk that an upgrade will break these extensions.
Wrapping Up
Cloud ERP offers organizations the opportunity to digitally transform their business processes and optimize their operations. By moving to the cloud, you can replace the aging line of business applications with systems that will support new applications that can keep up with your business and the pace of today's world.
Got More Cloud ERP Questions? We Can Help.
If you'd like to learn more about cloud ERP and how it will benefit your organization, reach out to the team at Kwixand Solutions. We are a Silver Microsoft Dynamics 365 Partner, specializing in the cloud-based Dynamics 365 Business Central. Based in Vancouver, Canada, we help businesses across North American digitally transform and get the most out of their cloud solutions. Is cloud-based ERP the right choice for your organization? Let us help you decide.