The business world is changing rapidly, so companies need the flexibility to react quickly to these dynamics. Cloud-based ERP solutions enable this flexibility, allowing core processes to be managed efficiently and applications to be available regardless of time and place. But be careful: it is not enough to act quickly. Rushed implementations can lead to mistakes that are costly. Take your time to choose the best solution for your company and then be consistent with your decision to reap the full benefits.
Discover below, step by step, how you can transform your business processes with a cloud ERP system.
What is Cloud ERP?
Cloud ERP is revolutionizing the way companies manage their core processes such as financial management, sales, production and administration. Unlike traditional on-premises ERP systems that run locally on on-premises hardware, Cloud ERP is delivered via a cloud platform. This means flexibility and accessibility - you can use your applications and data from anywhere and at any time via a secure connection on the internet.
Why Cloud ERP?
Software as a Service (SaaS) is a frequently used model. This offers considerable advantages:
- No high initial investment: Instead of a cost-intensive infrastructure, you pay a monthly or annual subscription.
- Less maintenance effort: Updates and maintenance are carried out automatically by the provider.
- State-of-the-art technologies: Cloud ERP integrates advanced features such as AI and machine learning to optimize processes. New features are available immediately, without the need for manual updates.
- Maximum data security: Your sensitive company data is stored and protected in secure and certified data centers.
How does cloud ERP work?
Cloud ERP works via cloud computing platforms that are operated by specialized providers. Unlike traditional on-premises solutions, where data and applications are stored on the company's own hardware, with cloud ERP the information is managed in external data centers. This has one major advantage: companies can access the system at any time and from anywhere - whether in the office, at home or on the move.
Security concerns are a thing of the past with modern standards such as encryption and offsite backups. Cloud ERP offers a high level of data protection and minimizes risks such as data theft. There is also no need to purchase and maintain your own servers, as everything runs via the SaaS model. Instead of large initial investments, companies pay a flexible, predictable fee and benefit from automatic updates that integrate powerful functions such as real-time data processing and artificial intelligence.
Another advantage: Cloud ERP connects different departments such as sales, production and logistics, which facilitates collaboration and supports well-founded decisions. The solution grows with you - whether you are a small start-up or a large company, Cloud ERP adapts to every industry and company size and offers the flexibility that modern companies need.
Cloud ERP and on-premises ERP in comparison
The decision between cloud ERP and on-premises ERP is a decisive step for many companies. Both systems have specific advantages, but the trend shows that cloud-based ERP solutions are becoming ever stronger.
The global cloud ERP market is experiencing impressive growth: from USD 49.80 billion in 2023, it is expected to grow to USD 181.04 billion by 2032 - an annual growth rate of 15.5%.
So don't miss the chance to switch in time
Here is an overview of the most important differences between cloud ERP and on-premises ERP:
Cloud ERP: flexible and cost-efficient
- Provision: Cloud ERP is provided via an external cloud platform. The provider handles hosting, maintenance and upgrades.
- Flexibility: Resources can be scaled as required - companies only pay for what they actually use.
- Cost structure: Instead of high initial investments, companies pay flexible subscriptions, either monthly or annually.
- Accessibility: Employees can access the system at any time and from anywhere via the Internet.
- Updates: Automatic updates provide the latest functions without interrupting operation.
- Security: Cloud providers offer state-of-the-art security measures such as encryption, regular backups and protection against cyber attacks.
On-premises ERP: control and responsibility on site
- Deployment: On-premises ERP is installed on the company's own hardware and operated directly on site.
- Flexibility: Scaling is dependent on the existing hardware. Additional resources require new investments.
- Cost structure: High upfront costs for hardware, licenses and implementation are a burden on the budget.
- Accessibility: Access is often only possible internally, which can restrict mobile work or location-independent use.
- Updates: Manual maintenance and updates require time, costs and often interruptions to operations.
- Security: Companies themselves are responsible for data backup and protection against attacks, which requires additional resources.
What are the advantages of cloud-based ERP?
Choosing a cloud ERP system has numerous advantages that make it a preferred solution for many companies.
1. low costs
Compared to on-premises ERP, cloud ERP does not incur high upfront costs for hardware, software licenses or extensive implementation. Instead, the subscription model (monthly or annual) enables a predictable and transparent cost structure. Companies also save on maintenance, as this is taken care of by the provider.
2. scalability
Cloud ERP adapts flexibly to the needs of a company. Whether start-up, medium-sized company or large corporation - the solution can be scaled according to the business model so that companies only use the resources they need. These scaling options make Cloud ERP particularly attractive for growth-oriented companies.
3. fast implementation
In contrast to traditional ERP systems, which often take months to set up, cloud-based ERP software is ready for use much more quickly. Thanks to the cloud computing platform, companies can often get started and optimize their business processes within just a few weeks.
4. reliability and safety
Modern cloud ERP providers rely on advanced security measures such as offsite backups, data theft protection and recovery options in the event of data loss. With a high level of ERP security and the ability to access multiple data centers, the cloud is one of the most secure solutions.
5. personalization and mobile capability
With Cloud ERP, companies can adapt the software to their individual core processes and business-critical applications. In addition, the mobile capability allows employees to access the system regardless of time and place - ideal for modern, decentralized teams.
6. support and upgrades
The responsibility for provision, maintenance and regular upgrades lies with the provider, which takes the burden off companies. In addition, most providers offer round-the-clock support to ensure smooth operation.
7. extensive insights and better decisions
Thanks to real-time data and integrated analysis tools, Cloud ERP enables better insights that help companies make informed decisions. This allows trends to be identified more quickly and business strategies to be adapted accordingly.
8. promotion of digitalization and competitiveness
Cloud ERP can be used to automate business-critical applications, create efficient processes and increase productivity. By integrating modern technologies such as AI and machine learning, the solution opens up new opportunities for innovation and increases the competitiveness of companies.
In the next section, we take a look at which companies in particular benefit from these advantages and why cloud ERP can be a game changer for you.
Which companies benefit from cloud ERP?
Cloud ERP is a versatile solution that supports companies of all sizes and industries. Thanks to its flexibility and scalability, it can adapt to a wide range of requirements - from start-ups and medium-sized companies to large corporations.
Start-ups and small companies: Affordable technology without hurdles
Cloud ERP impresses young companies and small businesses with its low entry costs and rapid operational readiness. Instead of making large investments in IT structures, they can use important functions directly via a subscription model. Easy access to data and intuitive operation allow them to focus on growth instead of dwelling on technical problems.
Medium-sized companies: More efficiency through integration
Cloud ERP enables medium-sized companies to combine their business areas such as finance, sales and production on one platform. Thanks to real-time data, decisions can be made faster and on a more informed basis. Even in growth phases, the system remains flexible and seamlessly supports the integration of existing tools such as CRM or logistics software.
Large companies: Innovation and global networking
For corporations, cloud ERP enables the standardization and automation of processes, supported by AI and machine learning. Teams around the world can work in a network and resources can be flexibly adapted - a decisive advantage for innovation and cost control.
Is SaaS ERP secure?
The security of cloud-based ERP systems, especially in the form of Software as a Service (SaaS), is one of the most discussed topics in the digitalization of companies.
A key advantage of SaaS ERP is the provider's responsibility for data storage, recovery and maintenance. State-of-the-art data centers have advanced protection measures that go far beyond the capabilities of many companies. These include encryption technologies, regular offsite backups and sophisticated crisis management to minimize risks such as data theft or loss.
Companies also benefit from constant monitoring of their systems. SaaS providers continuously invest in security solutions to detect and neutralize threats at an early stage. This proactivity offers additional protection that would be difficult for smaller companies, but also for multinational corporations, to implement if they had to manage their IT systems themselves.
The fact that companies of all sizes are increasingly relying on cloud ERP shows the growing acceptance of modern security concepts. While concerns about the security of data in the cloud used to dominate, many companies now value the reliability and ability of providers to protect critical information better than would be possible with an internal infrastructure.
FAQ
Which industry is a cloud ERP system suitable for?
Cloud ERP is particularly suitable for the following industries:
- E-commerce: Efficient management of orders, stocks and supply chains.
- Retail and wholesale: centralized control of goods flows and real-time insights into sales figures.
- Food industry: Optimized production planning, quality control and traceability.
- Construction industry: project management, resource planning and cost control.
- Production: Automation of manufacturing processes and monitoring of production lines.
- Logistics: Improvement of supply chain management and route optimization.
- Services: Efficient scheduling, resource utilization and customer management.
- Mechanical engineering: Management of complex projects, materials and production cycles.
But of course, cloud ERP systems are not limited to certain industries.
Is a cloud ERP system right for my company?
A cloud ERP system is ideal for companies that want to make their core processes more efficient, prefer low upfront costs and value mobility and scalability. It is particularly suitable if existing applications are to be seamlessly integrated and a modern, secure and flexible solution is required. Let us give you free and independent advice on cloud ERP.
What advantages does a cloud ERP system offer compared to conventional ERP solutions?
- Lower upfront costs: no need to purchase expensive hardware.
- Flexible scalability: The system can be easily adapted to the needs of the company.
- Automatic upgrades: New functions and improvements are provided automatically.
- Faster implementation: A short introduction of cloud ERP systems compared to on-premises systems.
- Independence of time and place: Access to the system from anywhere and at any time via the Internet.
Conclusion - First steps on the road to cloud ERP
Switching to cloud ERP is a significant step towards digital transformation and offers your company the opportunity to make your business processes more efficient, secure and future-oriented. But what happens after you have decided on cloud-based ERP software?
A needs analysis is the first milestone. This involves defining the specific requirements: Which core processes should be covered? Which functions and scaling options are essential? This clarity helps to select the right provider and the right solution.
In the next step, it is important to compare different cloud ERP providers. Criteria such as security standards, user-friendliness, industry-specific functions and references play a central role here. Evaluate different solutions that can be seamlessly integrated into your business-critical applications.
A preliminary project is a sensible approach for testing the solution on a smaller scale. It helps to identify technical challenges at an early stage and promote acceptance within the team. At the same time, it is essential to prepare employees for the new software through training. A well-trained team can utilize the benefits of cloud ERP more quickly and increase productivity.
Discover the benefits of a successful ERP pre-project - download the free whitepaper here!
After a successful test run, full integration follows. All systems are connected and processes are optimized to maximize efficiency and cash flow transparency. This allows you to benefit from the flexibility and insights that a modern ERP solution offers.
With a structured approach and the right partners, the switch to cloud ERP becomes a game changer - and opens up new opportunities for you to successfully assert yourself in a dynamic market environment.
