What is Cloud ERP Software?

What is ERP, and how does it work?

Today, businesses want to work better and keep up with changing needs and technology. So, what is ERP software? has become a popular question. To answer it, we must start by explaining what ERP stands for: Enterprise Resource Planning.

As the name indicates, Enterprise Resource Planning encompasses how organizations (regardless of size) manage their resources. The term “resources” can include materials, equipment, employees, and capital, among other things.

An ERP system helps organizations manage their resources. It connects different departments, such as finance, accounting, sales, and customer service. All of this is done through one main application.

Company-wide information is shared and synchronized in the system. This makes it available to all employees. Everyone can stay on the same page at the same time.

What is cloud-based ERP?

Cloud-based ERP systems allow companies to access all the above mentioned benefits via the internet. These systems can be categorized as: private cloud and Software as a Service (SaaS).

In private cloud ERP, a business keeps its hardware and software on-site. The IT department manages the setup, security, and maintenance of the system.

Initial costs can also be high, and employees may only be able to access the system remotely through a third-party application and/or device.

A cloud-based ERP system is available as Software as a Service (SaaS). Users can access it anytime and anywhere. They just need an internet connection and a device with a web browser.

This “anytime, anywhere” access is a game-changer for businesses with remote workforces, field technicians, and multiple locations. The Cloud ERP vendor takes care of security, updates, and upgrades. This allows customers’ IT teams to focus on other growth projects.
Some businesses, like Acumatica, can use their ERP software in a mixed way. This means they can combine private cloud and SaaS options.

What are the advantages of Cloud ERP?

One of the biggest advantages of Cloud ERP software (specifically, Acumatica) is its almost limitless customizability. Add-on solutions, role-based dashboards, open APIs, and industry-specific functions work together. They provide companies with great data visibility and strong decision-making tools. This creates a platform for long-term success.

To better understand the benefits of industry-specific Enterprise Resource Planning systems, consider the construction industry. Construction businesses have many moving parts. The office and field teams work together to finish many projects on time and within budget. However, problems occur when they lack updated information.

Construction-specific ERP software integrates systems and applications—including financials, job cost accounting, project management, inventory, CRM, payroll, and more—for a complete, real-time view of the business that instantly connects all workers in the team.

What is the real-cost of ERP software?

The overall cost of an ERP system will, of course, depend on which system you choose. Pricing is subjective and takes many different factors into consideration. To justify the expense of an ERP investment, you should examine, not just the base cost of the ERP system itself, but also the system’s return on investment (ROI).

The most obvious system and implementation costs include: Hardware expenses (for private Cloud ERP solutions), Software licensing costs, Per user fees, Initial implementation, data conversion, and training costs, Customization needs.

But when making cost comparisons, businesses must also remember that ERP pricing structures will differ from system to system. And they should take any hidden costs into consideration. These can include, among other things:

1. The time employees will spend implementing the system, learning how to use it, and developing new procedures with it.
2. Future system customizations based on changing business needs.
3. Software upgrades.
4. Additional training and consulting as time goes on and your business grows and changes.

The bottom line is to make sure you do your pricing homework before choosing an ERP system. To help with this part of the process, Acumatica created this eBook: How to Calculate ERP Software Return on Investment (ROI). Understand areas where you can achieve a return on investment for ERP applications like Acumatica and get real-world examples from small and midsized companies in varied industry segments based on their digital transformation projects.

How to choose the right ERP?

There are many factors to consider when choosing an ERP system, and your examination of these factors will take place across a few steps.

The first step is research, which includes weighing the cost of various ERP solutions, as we talked about above. If you’ve reached this first step, you’ve probably already decided that an ERP solution—with its ability to manage all business processes and spur data-driven decision-making—is a better choice than, for instance, simple accounting software, like QuickBooks.

The second step is evaluation: comparing solutions side-by-side. All employees who will be using the system should be included in this process. Their opinions, feedback, and suggestions, based on their frontline experiences with your business, will go a long way toward helping you make an informed—and supported—decision. (An ERP Comparison Checklist is an efficient way to manually evaluate systems based on productivity, functionality, technology, value, and risk.)

The third step is selection. Keeping the company’s needs, timeline, and budget in mind, you’ll look at whether the solutions at the top of your list actually meet expectations. Here are some questions to ask when buying ERP software:

• Does the solution address industry-specific pain points?
• Does the solution address industry-specific pain points by role?
• Does it have the reporting and analytics functionality my business will need in the future?
• Can the ERP solution integrate seamlessly with complementary, third-party applications?

If the answer is “yes” to these and any other business-specific questions, it may be time to hit the “ERP buy” button…or is it?

Even if an ERP solution looks fantastic on paper, it still may not be the right choice if the ERP software vendor isn’t a good fit.

What criteria should be used to select an ERP software vendor?

Weighing costs, comparing your many options, and asking the right questions are crucial steps to making the right ERP choice, but there’s one other vital task you must accomplish before making your final decision: evaluate the ERP software vendor.

Implementing an ERP solution is a value-driven, benefit-filled project that requires time, money, and effort. The right software vendor should not only be able to help you manage these valuable resources but also understand the ins and outs of the technology itself and have a firm grasp of your unique business needs. Essentially, the vendor must be a knowledgeable, trustworthy partner that can walk you through every step of the process.

As you assess your ERP software vendor options, consider the following:

• Do they put their customers’ needs first?
• Do they offer comprehensive training?
• Do they continue to provide full-throttle support after going live?
• Do they offer accessibility to every member of their team?
• Do they share their product roadmap with their customers?
• Do they keep their promises?

And you should also consider whether the ERP software vendors acknowledge your rights as a customer. If you’re unsure what those rights are, Acumatica’s Customer Bill of Rights—the first and only one of its kind in the ERP marketplace—can help you out.

With Acumatica, you have the right to:

1. A software and services proposal with clear fee structures, and no surprises.
2. Unlimited user access without having to purchase user licenses.
3. Fully adapt and customize the solution to meet your evolving business requirements.
4. Transparent, fair pricing and agreements without long-term commitments.
5. Deploy the solution on a public or private cloud.
6. An open platform with robust APIs to rapidly integrate your other systems.
7. A complete security model that covers your application access, data, reports, and devices.
8. Own and access your data, now and always—in full, usable data formats.
9. Take advantage of all knowledge and resources developed across a broad community of employees, partners, and customers.
10. Professional online training that is free and comprehensive.

If the ERP software vendor you’re considering doesn’t advocate for these or similar rights, you may want to rethink your decision.

“Acumatica is kind of this golden thread that runs through our business and supports us culturally as well. The post-implementation support we’ve had from both our partners in the UK, Tascoli, and Acumatica directly, has been second to none. They make you feel like you are their number one customer, and they can’t do enough to help you. So, we’ve been very impressed.” – Chris Drake, Chief Operating Officer, Smartnumbers