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Advantages of an ERP

What are the Advantages of an ERP in the Cloud?

by Alex Hales

The term ERP in the cloud (cloud ERP in English) is gaining strength in recent years. A cloud ERP can be defined as an enterprise resource planning system operated over the internet. Currently, many ERP system manufacturers have chosen to publish versions of their ERP software in the cloud to make them more accessible.

Advantages of an ERP in the cloud

Cloud ERP systems like D365 Business Central contain the main features of traditional ERPs. However, at the same time they provide new advantages and disadvantages that must be taken into account when considering both options.

Cost

When talking about ERP in the cloud, it refers to software located on the web servers of the contracted provider. This means that the company will pay only for the right to access a server and use a program. These payments will normally be monthly and will increase depending on the number of users using the system. In that single monthly payment will be included the service, updates and maintenance.

The total cost of implementing an ERP in the cloud is significantly lower than that of an ERP on-premise . The figures of the operation are difficult to define, although in general certain examples of budgets can be obtained for small, medium and large companies. Similarly, the price of the system will differ depending on the sector in which the companies work. To consult the costs of an ERP in the cloud according to the occupation sector and the size of the organizations, consult the Budget Planner in the ERP 2022 Guide .

Improvements and update

In a study conducted by the Aberdeen Group, of 832 European companies surveyed, 34% had an on-premise ERP between 7 and 15 years old. According to the same study, the cost of updating was the main reason for obsolescence in these companies.

For this reason, the advantage of ERP systems in the cloud is that they are updated automatically and without additional cost from the providers. This represents a great advance, since users will always have the latest version of the service available at no additional cost.

Flexibility

ERPs in the cloud allow access to them no matter where, when, or how the connection is established. The only requirement is to have an internet connection. The user will have information in real time from any type of device. On the other hand, it is worth noting the speed at which the system allows you to add or remove users, as well as contracted features.

Disadvantages of an ERP in the cloud

  • Uncertainty due to the loss of control of your data .
  • Legal aspects : if the main occupation of the company is to work with personal data, the LOPD  (Organic Data Protection Law) must be taken into account and make sure that our supplier complies with all the requirements.
  • Internet connection failures cannot be controlled, but they are a serious problem when you need to work with the ERP. A good internet connection will ensure the use of the software.
  • Shutdown due to provider maintenance will mean the limitation of data use. Suppliers must communicate said maintenance but it will not be possible to decide when that stop is carried out.
  • In case the service provider does not continue to provide it , the ERP in the cloud will also stop working. The explosion of the cloud computing market has attracted a multitude of companies, however, some of them have not been able to withstand the competition and have ended up closing.

conclusion

Although it seems that the implementation of an ERP Software in the cloud can be easy and fast, the improper installation of this type of services can generate costly and frustrating delays in companies. There are some failures that can make the change from an on-premise ERP to one in the cloud a real problem. To avoid such failures, consult the ERP 2022 Guide at Dynamics Square , where you will find the crucial data to successfully implement your ERP in the cloud.

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