Why Cloud Computing is the Future for ERP Implementations?

How Cloud Computing and Applications are Shaping the Future of ERP

Change is the one thing every person can count on in life, and a perfect example is technology. Over a span of decades, computers morphed from giant machines with thousands of component parts to handheld devices that fit in our pockets. And data once stored on a user’s device is now stored on a data server that is accessible via the internet.

Called “cloud computing,” this easy and unlimited data accessibility on user-friendly and intuitive devices has caused a shift in customer preferences. No longer content with slow, disconnected applications, customers are demanding fast, informative, and cloud-based applications that serve their needs in an evolving digital economy.

Why Cloud Computing is the Future

Cloud Development and Innovation

Knowing when cloud computing started and who coined the phrase depends on who you ask and where you look. But most agree that cloud development is driving innovation in every industry around the world—and for good reason.

Cloud computing provides businesses—large or small, profit or non-profit—with a number of overarching benefits, including:

  • Increased efficiency and productivity.
  • Reduced operational costs.
  • Enhanced security.
  • Unprecedented mobility.
  • Real-time data accessibility.
  • Connected business.

These substantial benefits have not gone unnoticed by organizations seeking ways to improve performance and profitability in a competitive marketplace. They’re recognizing that their legacy business management solutions aren’t up to the task and are quickly finding out that modern business management solutions, such as cloud ERP (short for “Enterprise Resource Management”) solutions, are.

ERP Driven by the Power of the Cloud

Before examining how the cloud is the main contributor to an ERP solution’s—and therefore, its customers’—success, let’s define what an ERP solution is and does.

In simple terms, an ERP solution is software that integrates a company’s business functions (e.g., accounting, inventory, project management, and more) while connecting a company’s departments through their data. The data from each department enters the centralized system and is synchronized, allowing authorized users to access updated, accurate information. Integrated business intelligence tools within the ERP solution help companies analyze their data in order to gain real-time insights into the health of the organization and into which direction the organization should go.

But what happens when an ERP solution is cloud based? Users have unparalleled access to the business-wide data from any location—whenever they want and whenever they need. Such 24/7 and remote access is unattainable with an on-premises solution and has persuaded 62.7% of organizations to choose cloud ERP solutions over on-premises cloud ERP options.

With the ERP market expected to exceed more than US$ 49.50 Billion by 2027, it’s safe to say that the future of ERP solutions is looking bright.

The Benefits of Cloud ERP

According to a CIO article on ERP trends, the move the cloud is definitely happening, and the benefits are clear. Author Yashvendra Singh writes: “By taking their ERP solutions to the cloud, CIOs can benefit from lower costs, new functionality, mobility, simpler deployment, elasticity, less need for internal IT resources, and the ability to add users and functions to accommodate business growth.

Let’s look more closely at a few of the many benefits businesses can expect when implementing a cloud ERP solution.

Lower Operational and Implementation Costs

High operational and implementation costs have often been touted as major reason for not investing in an ERP solution. This is a valid concern when choosing an on-premises system, which requires companies to invest in the solutions’ software, the software’s license, and the required hardware. And the companies’ IT departments are tasked with finding a location to store the hardware, installing the hardware, and maintaining the hardware (e.g., support, updates, and security), which takes a lot of time, money, and energy.

Cloud ERP solutions, on the other hand, charge a subscription fee that covers the cost of using the software, the amount of resources used, and the number of users. Because users access the software over the internet using any web-enabled device, implementation is easier and faster than an on-premises solution. And the cloud ERP vendor provides automatic updates while also shouldering the responsibility for maintenance and security.

Complete Mobility for Users

According to Forbes, remote work is here to stay, which means organizations must provide their workforce with the ability to work from home. With a cloud ERP solution, mobility is a built-in capability. Other than needing a reliable internet connection and a cloud-forward device, the ERP solution allows employees to effortlessly connect to the ERP solution from any location and time zone. Viewing information, communicating with team members, sharing files (and much more) is possible with a click of a button.

Powerful Data Backup and Security

As previously noted, data security for traditional on-premises ERP solutions rests with a company’s IT experts. Security in an on-premises ERP solution includes instituting backup and recovery measures, such as storing data on hard drives, disks, and/or onsite servers. Sadly, should a catastrophic event damage the hardware and/or system, the data may be irretrievable.

In contrast, cloud ERP solutions are hosted on secure platforms, such as Amazon Web Services (AWS), that encrypt all data that enters their global networks. And cloud ERP vendors—who know their reputations are on the line and who don’t want to pay for a data breach—monitor, test, and backup their customers’ data as well as protect their customers from increasingly sophisticated cyberattacks.

Moving Onto the Cloud

After seeing the benefits of moving to a cloud-based ERP solution, it’s understandable why so many companies are choosing to move onto the cloud. But it’s important that these companies recognize the different cloud systems available to them.

  • Multi-tenant Systems: Customers share a single instance of the ERP software, which includes its supporting infrastructure, application, and database. Though a shared environment, customers’ data is separated from other tenants.
  • Single-tenant Systems: Customers have their own instance of the software with no sharing of infrastructure, application, or database.

Each option has its own benefits and drawbacks, and each company will want to decide which one works best for them.

Finding Success with Cloud ERP Implementations

Of course, it’s easy to say how wonderful a product or service is, but customers demand proof. Analyst (and blogger) Jon Reed of Digonomica also requires evidence, which is why he sat down with the Cornell Cooperative Extension (CCE) team to explore why they describe Acumatica Cloud ERP as “magic.”

In his article, Reed notes that the word “magic” is “outside my enterprise software comfort zone,” and writes,  “Acumatica’s leadership is pretty vigorous about what their cloud ERP can do, employing keynote catch phrases like ‘agile ERP.’ If you use bold catch phrases, I’m going to see if those resonate with customers.”

Sarah Fox Dayton, CCE Associate Director, explained to Reed that CCE—a non-profit organization dedicated to improving the lives of New York citizens and Acumatica’s 2022 Impact Customer of the Year— is a “painfully, magically-complex organization” with “extraordinary reporting requirements at the federal, state, and local level.” CCE chose Acumatica because it was flexible and able to adapt to their varying and unique needs.

Reed dives further into the details, revealing that CCE was able to successfully bring 56 associations live on Acumatica (with 66 tenants to cover other entities within the organization that function on their own) in just under a year’s time. But as to why CCE considers Acumatica “magic,” Dayton says, “It’s really fun to work with—it’s like the information just appears in front of you. It’s like it magically appears, because it’s not information we could comfortably get in the past. So that’s why it’s magic to us.”

Dayton also explained that Acumatica’s data access makes a difference in how CCE operates:

It changes the way the university makes decisions or views information. It gives the association’s executive directors on their board of directors a degree of information about their own organization that they didn’t have access to before. So they have much more informed decision-making ability now than they had in the past.

For Reed, CCE’s Acumatica experience is a great example of real results.

Amanda Datte
"We knew Acumatica was a solution that we could grow with. We knew that it wasn't going to limit us to what we could do. There is a lot of possibility for Clive and how we want to continue to expand."
Amanda Datte, CFO
Clive Coffee

How Acumatica Can Help

Acumatica Cloud ERP is an award-winning cloud business management solution for small and midmarket organizations seeking success in today’s digital economy. Built on a future-proof platform with open architecture for rapid integrations, scalability, and ease of use, Acumatica has been providing customers with a full suite of integrated business management applications, an affordable licensing model, complete mobility, and enterprise-level security since 2008.

As the world’s fastest growing cloud ERP company for six years (and counting) with over 8000 customers and 500+ employees, we understand that the future of ERP rests in companies embracing cloud computing and its bevy of benefits. With our cloud ERP software, Acumatica customers can achieve success today and tomorrow.

Contact our team of experts with any questions or to schedule a demonstration.

See what’s possible when you have a future-proof ERP platform that truly puts customers first.