Cloud Based ERP System: Characteristics, Merits, Demerits, And Famous Implementations

Research Objectives

What Is Cloud Based Enterprise Resource Planning System?

What Are The Characteristics, Merits And Demerits Of Cloud Based Erp System?

What Are Enterprise Resource Planning And Cloud Computing And What Their Characteristics, Merits And Demerits?

Which Famous Companies Have Implemented The Cloud Based Enterprise Resource Planning System Within Their Business?

The technology of enterprise resource planning or ERP is the significant process or the integrated management and control for a particular type of business operation or process that is being mediated by the help of the technology or software (Leon 2014). This specific technology of enterprise resource planning or ERP can be simply termed as the typical sub section of software of the management of business or can also be referred to as the major collection of various integrated applications or operations, which the organization is eventually utilizing for the sole purpose of storing, managing, collecting, retrieving or interpreting the kind of data or information from all the business activities as well as operations (Chiu et al. 2014). In today’s world, each and every popular organization or company is utilizing the technology of enterprise resource planning or ERP to reduce the complexities of the business and to execute all the business operations and processes easily, promptly and smoothly. The second important type of technology that is extremely popular for the users is cloud computing. It is much different from the technology of enterprise resource planning or ERP (Shaul and Tauber 2013). There are various advantages of the technology and thus the users are benefitted from it. The most significant benefits of the cloud computing technology majorly include easy transfer of data, simple integration, security, and reduction of infrastructure costs, easy accessibility and many more (Dinh et al. 2013). The following research report outlines a brief discussion on the concept of ERP systems on cloud. It is the significant amalgamation of the enterprise resource planning or ERP system and the technology of cloud computing. The research report has properly mentioned every important detail regarding the cloud ERP software.

The various research objectives of this research report are as follows:

• To know about various characteristics, benefits and demerits of enterprise resource planning or ERP system.
• To learn about various characteristics, benefits and demerits of the technology of cloud computing.
• To understand the entire concept of cloud based enterprise resource planning system.
• To know about the practical or real life case studies on cloud based enterprise resource planning system.

The Enterprise resource planning system is considered as one of the most important requirement for any bigger business to properly integrate their business process (Tarhini, Ammar and Tarhini 2015). A specific structured approach is present for the enterprise resource planning or ERP system to properly help the organization in automating as well as standardizing all the processes of business and thus improving the operational efficiencies. The most integrated approach that helps the users in the management of every business operation to subsequently ensure about the fact that resources like time and money must be saved. For the purpose of the significant integration of the business procedures and operations, the subsequent information flow is much smoother than any other technology and thus the system is well accepted by every organization or company in the entire world (Seethamraju 2015). There are various important features of the enterprise resource planning or EPR system. All these significant characteristics of ERP are provided below:

1. i) Process Integration: This is the most important characteristic of the enterprise resource planning system is the proper process integration. This software helps the business in properly integrating al the business operations and processes into one single process and thus is considered as the most popular software to be utilized (Nofal and Yusof 2013). These operations of business are much important for the organization and thus proper execution of these processes is highly required. The resource consumption is also very less in comparison to any other technology and thus time as well as money is saved.
2. ii) Customer Relationship Management: Another significant characteristic of the cloud ERP software  to manage the CRM or customer relationship management. This particular characteristic of ERP software is useful for the business to properly control or to manage their customers or clients within the business or organizational sales (Matende and Ogao 2013). The module of customer relationship management is being utilized by each and every company that comprises of various business processes. The relationship with the customers is properly managed by the software and the organization becomes explicitly popular.

Characteristics, Merits and Demerits of Enterprise Resource Planning

iii) Time Saving: The third characteristic of the ERP software is that it helps to save time by integration or streamlining every business process. Thus, the resource consumption is also lesser than other organizations.

1. iv) Customization Capability: Another important characteristic of the enterprise resource planning software is the customization capability (Seo 2013). The customers can easily customize the business processes or operations quickly. The cost consumption is also very less.

This enterprise resource planning software comprises of various merits or benefits that are useful for the clients. The main merits of this software are provided below:

1. i) Provides Competitive Advantages: The most important benefit of the enterprise resource planning software is that it provides competitive advantages to the business (Zeng and Skibniewski 2013).
2. ii) Higher Efficiency: The second advantage is that it helps in providing high efficiency to the business operations or processes.

iii) Collaboration: Easy collaboration of business processes is another important benefit of the ERP software (Chang et al. 2015).

1. iv) Scalability and Flexibility: ERP software is absolutely scalable and flexible in nature.
2. v) Cost Effective: The cost or expenses of this software is much lower than any other technology.
3. vi) High Productivity: After the successful implementation of the enterprise resource planning software, the production of the company becomes much higher (Ha and Ahn 2014).

In spite of having such important advantages, this particular software do comprises of various demerits. The various demerits of ERP software are provided below:

1. i) Data Migration Difficult: The migration of data is complex and could not be done easily.
2. ii) High Indirect Costs: Although ERP helps in saving the various costs, there are several indirect costs like infrastructure, which is extremely high in this technology and hence it is difficult for the business to afford it (Shen, Chen and Wang 2016).

iii) Lack of Security: The lack of security is another significant demerit of ERP. This software is completely dependent on the vendors and thus the security and authenticity of data is lost.

Cloud computing solely depends on the resource sharing for properly achieving the scale of economy (Arora, Parashar and Transforming 2013). This particular technology of cloud computing helps the users in proper and easy transfer of information and data via the Internet connection; not even being involved in any specific type of complexity. Since this technology of cloud computing does not comprise of any type of technology, it is extremely popular and famous for any organization, company or user in the entire world. There are four deployment models and three architecture models of the technology of cloud computing. The three distinct architecture models of cloud computing are IaaS or infrastructure as a service, PaaS or platform as a service, SaaS or software as a service and the four specific deployment models of cloud computing are public cloud, community cloud, private cloud and finally hybrid cloud (Fernando, Loke and Rahayu 2013). There are various important characteristics of the cloud computing technology. All these significant characteristics are provided below:

1. i) Elasticity and Resource Pooling: The first characteristic of cloud computing is that it allows elasticity and resource pooling. Thus multi tenancy feature is present.
2. ii) On Demand Services: The next feature of cloud computing is that self services are present as per the demands of the users (Hashem et al. 2015).

iii) Quality of Services: The service quality is much more improved with the technology of cloud computing.

This enterprise resource planning software comprises of various merits or benefits that are useful for the clients. The main merits of this software are provided below:

1. i) Easy Implementation: The most important advantage is that cloud computing can be implemented real fast and thus is much popular (Li et al. 2013).
2. ii) Easier Data Accessibility: The access of data is much easier and hence this is another important advantage of the technology. Moreover, the data can be accessed from anywhere.

iii) High Flexibility: The flexibility and scalability of the technology is much higher and thus could be used by all users.

1. iv) Recovery of Data: If any type of data is lost, it could be easily recovered without many issues (Garg, Versteeg and Buyya 2013).

In spite of having such important advantages, this particular software do comprises of various demerits. The various demerits of cloud computing technology are provided below:

1. i) Lack of Redundancy: The first demerit of the technology of cloud computing is the lack of redundancy (Xiao, Song and Chen 2013). This becomes major issue for the organization.
2. ii) No Data Control: There is no control of the data and the users face various problems due to this.

iii) Bandwidth Issues: The bandwidth of the technology is much lower than the rest technologies (Rittinghouse and Ransome 2016).

Characteristics, Merits and Demerits of Cloud Computing

The cloud based enterprise resource planning system is utilized for the purpose of allowing each and every user to properly access every software application, which is subsequently running on any shared computing resource through the help of the Internet connectivity (Antero 2015). All of these shared computing resources are easily managed or controlled in every data centre that is dedicated for hosting these applications on the several platforms. This particular cloud based enterprise resource planning system is defined as the typical software or system that is driven by SaaS model or software as a service model of cloud computing. This presence of SaaS model helps the users to enable every user in accessing the enterprise resource planning software on the Internet (Dey, Clegg and Cheffi 2013). The total expenses of the software of ERP is much lesser since all the resources of this computing are not easily maintained, controlled or managed on premises.

There are various important features of the cloud based enterprise resource planning system. All these significant characteristics are provided below:

1. i) Scalability and Flexibility: The first and the foremost characteristic of the cloud based enterprise resource planning system are scalability and flexibility. The entire software is extremely scalable as well as flexible (Hashizume et al. 2013). For the presence of this particular characteristic, each and every cloud based application is grown or contracted as per the user demands. All the cloud providers consist of the several robust systems, which could be utilized for handling as per the technology of cloud computing. Moreover, this feature is also helpful for the companies in enabling not to pay any extra cost as penalty and hence saving up every resource of the organization.
2. ii) Easier Usability: The second significant characteristic of the cloud based enterprise resource planning system is that it is extremely easy to use and hence does not consist of all kinds of complications (Jain and Paul 2013). The easy usability of the software has made it extremely popular for all users and the applications can also be selected easily.

iii) Easy Customization: The third significant characteristic of the cloud based enterprise resource planning system is that it provides easy customization. There are several tasks that any user performs as per the user demands and the customization is much easier.

1. iv) Constant Customer Support: The final important feature of the cloud based enterprise resource planning system is that it helps to provide constant customer support by the organization (Arora, Parashar and Transforming 2013). The complexity is less and hence could be used by every user.

This cloud ERP software comprises of various merits or benefits that are useful for the clients. The main merits of this software are provided below:

1. i) Reducing Supports of IT: The first and the foremost benefit of the cloud based enterprise resource planning system is that it helps in reducing the supports of information technology or IT (Zeng and Skibniewski 2013).
2. ii) Avoiding Costs of Upfront: The next important benefit of the cloud ERP system is that it helps to avoid all the upfront costs or expenses.

iii) Eradication of Extra Expenses: The extra costs or expenses are easily eradicated with this software; since, the infrastructure costs are solely avoided in the process (Matende and Ogao 2013).  Thus the organizational resources are saved.

1. iv) Avoidance of Attacks: Another important advantage of the cloud based enterprise resource planning system is that it helps to avoid any type of security attacks and hence is termed as the most secured system.
2. v) Presence of DR Plan: A specific disaster recovery plan is present within the software and thus it is extremely important for the users to preserve their data or information (Seo 2013).
3. vi) Easy Data Access: The sixth benefit of the cloud based enterprise resource planning system is that the data could be easily accessed without any type of complexity or complications.

vii) Lack of Installation of Hardware: The hardware installation is not required here and thus it is again one of the most significant benefits of cloud ERP system (Nofal and Yusof 2013).

In spite of having such important advantages, this particular software do comprises of various demerits. The various demerits of cloud ERP software are provided below:

1. i) Integration Problems: The most significant problem or issue for the clients of the cloud based ERP software is solely related to the integration (Tarhini, Ammar and Tarhini 2015). Each and every business process cannot be easily integrated with the software and thus the client faces major losses.
2. ii) Incorporation of the Management Procedures: The second significant issue or challenge for the cloud ERP software is that the procedures of the management of this software cannot be implemented or incorporated easily.

iii) Decision Making Process: The next important demerit of the cloud ERP system mainly includes improper decision making process. Hence, the client suffers from various issues (Seethamraju 2015).

1. iv) Difficult Data Migration: Another important and significant issue with the cloud based ERP software is that the migration of data to any other department or business is not at all easier. Although, features of cloud computing is present here, the client suffers through major difficulties.

The software of ERP system on cloud is being incorporated within several popular organizations or companies to enhance their business model and obtain competitive advantages (Leon 2014). Moreover, the proper execution of business process and operation is also done perfectly with the help of this particular software.

1. i) Coffice: Coffice is one of the most popular organizations that is responsible for manufacturing various types of coffee machines. This specific organization was suffering from several problems that were related to the accounting processes and the inventory processes (Chiu et al. 2014). Hence, they decided to implement the cloud based ERP software within their business. Each and every problem related to the accounting processes and the inventory processes were resolved and the business enjoyed profit with this.
2. ii) Baldinger Bakery: The next significant practical case study is for one of the most popular bakeries in the world, namely, Baldinger Bakery. They started their business 128 years ago and for this long tenure have been extremely successful. For this type of excess growth as well as expansion of business, the organization took the decision for opening various other branches in the world (Zeng and Skibniewski 2013). However, the percentages of sales and delivery accuracy were going down and they were going through significant losses. They implemented the software of cloud ERP and in three months time, approximately 30% of the total sales were increased and all the issues were removed.

Enterprise Resource Planning Systems on Cloud

iii) Living Proof: The next important case study is about a hair care product company, namely, Living Proof. When the cloud ERP software was implemented within their business, an overall 330% of their total revenue was increased within the business and their business operations were executed successfully (Hashem et al. 2015). The brand ability was also improved and the product portfolio was solely enhanced. Thus, the organization was extremely benefitted by the cloud based ERP system.

These above mentioned three significant case studies of three important organizations clearly show that cloud based ERP software is extremely effective for any business and it helps in reduction of all the complications in obtaining competitive advantages for them.

Conclusion

Therefore, from the above research report, conclusion can be drawn that enterprise resource planning or ERP system is a wider set of various activities, which could be extremely helpful for any specific company or organization in controlling as well as managing of the businesses. The most significant aim or goal of this particular technology of ERP is that it helps in the perfect integration of any back office operation or process to properly facilitate the information flow within the company in making every decision related to the business perfect drawn by data. The various suites of the enterprise resource planning system are being made for the purpose proper collection as well as organization of data from all the levels of management. This is to be completed by the connection of all the business processes and operations of all the departments. There are various departments present in a company and if every department is linked with the business operation of the other department, the overall management of the business would be much easier and smoother. Cloud computing is the kind of technology that is being utilized by various organizations or companies to transfer confidential data and information and also to deliver any hosted service on the Internet connectivity. Cloud computing is termed as one of the most significant technologies of the technological world that is being utilized by various organizations in their businesses. The amalgamation of enterprise resource planning system or ERP system and the technology of cloud computing is known as cloud ERP system or ERP systems on cloud. The above research report has properly outlined various details of the ERP systems on cloud.

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