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Basics of Enterprise Resource Planning and How Cloud ERP Works

Mohammed NaserMohammed Naser

Enterprise resource planning is a business management system that integrates the various business processes, often using technological tools. Read more.

Basics of Enterprise Resource Planning and How Cloud ERP WorksEnterprise resource planning (ERP) software came as a boon for enterprises that didn't have efficient systems to take care of their finance and operations. Sure, the earlier systems helped with the day to day business without many issues, but day to day won't cut it for businesses looking to grow well, would it? Company needs are dynamic, and a system that supports the operations should be so too. This is where ERPs come in. Let us now look at the basics and benefits of ERPs and how they work in a cloud scenario.

What is Enterprise Resource Planning?

In simple terms, enterprise resource planning is a business management system that integrates the various business processes of an enterprise, often using technological tools. An enterprise using ERP can collect, manage, process, store, and analyze data from its various business operations.

Even though the operational data is from different sources and systems, ERPs maintain everything in a single database where authorized users can access. Enterprise resource planning systems are now used by a lot of organizations worldwide and worth billions of dollars. In fact, the projected revenue of the ERP systems market by 2025 is 48.2 billion dollars at a compound annual growth rate (CAGR) of 7.9%.

Companies across a multitude of industries are accepting ERP systems. Recent surveys say that around 95% of companies who adopted ERPs say they have seen significant improvements in their operations. Concerning the method of implementation, the preferred choices are on-premise and cloud. An on-premise ERP system will be installed and managed by the IT department, or a provider hired just for the purpose. While some companies prefer such a structure, most gravitate towards a cloud-based ERP system.

Cloud-based Enterprise Resource Planning

A cloud ERP system runs on a cloud environment allowing network access for the relevant parties involved. The data will be stored and processed over cloud servers, deployed, and managed by designated cloud providers. Cloud ERPs are a key business driver for organizations as they provide a lot of advantages to enterprises. Here is a look at some of these benefits.

Advantages of Cloud ERPs

  • Faster implementation- A longer ERP implementation system can mean longer business downtime and customer satisfaction loss. Since most cloud ERPs come from an expert vendor, there are no headaches or lost time training IT staff and setting everything up from scratch.
  • Accessibility, agility & scalability- Cloud ERPs provide real-time access to information across multiple devices and can be scaled according to business requirements without any agility issues.
  • Upfront cost structure - The provider can give you an exact estimate of what you have to pay according to the scale of operations. There are no unexpected setup and maintenance costs. There is also the advantage of not paying licensing fees and the like.
  • Customization & ease of upgrades- Since businesses are dynamic, they need an ERP system that can adapt to the changes. Cloud ERPs are easier in that sense. Also, any upgrades will be taken care of by the provider.
  • Better security, compliance & recovery- Hiring external service providers are sometimes a concern for companies, yes, but a reputed and trusted provider can bring you better security options than the company could have, ensure that all regulations are adhered to, and will bring in enterprise-grade recovery and backup options.

Some Business Operations Integrated by Cloud ERPs

Here are some of the functional areas covered by enterprise resource planning systems, both cloud-based and traditional.

  • Finance & accounting - provides dashboards for everything from general ledgers to consolidation and asset management to budgets.
  • Project management - takes care of operations such as planning, resources, time & expense, performance, etc.
  • Human resources -streamlines employee management by helping with tasks such as payroll, hiring, employee performance, etc.
  • Manufacturing - by accessing real-time data, companies can improve business communication, optimize projects, and automate daily tasks.
  • Customer relationship management (CRM) - ERPs help with certain tasks such as call center support, sales & marketing, customer contacts, etc., among others.
  • Supply chain management - helps with automation of inventory management, procurement of resources, and more.
  • Data services - provides certain self-service interfaces for vendors, customers, etc.

VEXXHOST Cloud Solution for ERPs

Companies with cloud-based Enterprise Resource Planning systems use public, private, or hybrids clouds to deploy them. At VEXXHOST, we specialize in all three of those solutions. Our cloud services are based on OpenStack, making the environments free from licensing fees or vendor lockins. For many of our clients, private clouds are the preferred choice because of their highly scalable and secure nature.

Speaking of private clouds, you can now run on a fully agile and customized cloud from VEXXHOST, with no licensing fees and smooth 2-week migration. In fact, we're ready to put our money where our mouth is. We're so confident in being able to save you at least 20% or more on your current cloud infrastructure expenditure that if proven wrong- we'll give you $1,000 credit to our public cloud.

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