# Cloud ERP: the risk and the reward Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-08-24 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Transforming Businesses with Cloud ERP Systems Meta Description: Discover how Cloud ERP systems are revolutionising the way organisations operate, from enhanced collaboration to cost savings. Join the transformation today! Tags: featured Tag URLs: featured (https://financedigest.com/tag/featured) URL: https://financedigest.com/cloud-erp-the-risk-and-the-rewardhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/fd240817-4-1736843577521-compressed.jpg) **Mike Rogers,** sales and marketing director, FormpipeLasernet Enterprise Resource Planning (ERP) systems are the beating heart of organisations operating across multiple industries, from manufacturing to retail, public services to utilities. ERP enhances the management of core business processes, including planning, purchasing, inventory management, logistics and finance. Joining up the dots of different departments, removing silo working cultures, promoting transparency, and [aiding efficient collaboration with suppliers and customers](https://www.financedigest.com/how-fintech-aids-financial-inclusion-and-helps-customers-through-crises.html "How Fintech aids financial inclusion and helps customers through crises"), it’s safe to say ERP has transformed the way businesses function for the better. Coupled with effective customer communication management, which controls the process of designing, defining the use and [managing the destination of business documents within an ERP system](https://www.financedigest.com/bowel-management-systems-market-demand-and-competitive-analysis-by-leading-manufacturers.html "Bowel Management Systems Market Demand and Competitive Analysis by Leading Manufacturers"), companies can simplify, systemise and economise a multitude of processes, from invoice generation to label creation. Implementation of customer communication [management software](https://www.financedigest.com/calibration-management-software-market-to-witness-exponential-growth-by-2030-end-tmr-study.html "Calibration Management Software Market to Witness Exponential Growth by 2030 End | TMR Study") can give businesses long term cost savings, through reducing the need for hardware, printers and excessive manual administration. Effective output management can also strengthen an organisation’s brand, by [offering users a quick and easy means of creating and upholding consistent communication within customer-facing documents that are pre-aligned with corporate brand](https://www.financedigest.com/why-insurers-have-started-listening-to-what-sonic-branding-has-to-offer.html "Why insurers have started listening to what sonic branding has to offer") guidelines. As consumers we are becoming more comfortable with the cloud as a concept, from the weekly food shop to [streaming music](https://www.financedigest.com/uk-competition-watchdog-has-music-streaming-in-its-sights.html "UK competition watchdog has music streaming in its sights") instead of hoarding CDs, and the acceptance isn’t far behind for the business community either. In fact, according to the Cloud Industry Forum (CIF), 63 per cent\* of UK businesses are planning to move their entire IT estate to the cloud in the near future. And although some way behind other SaaS offerings, ERP systems have also begun the slow migration to the cloud, with giants like [Microsoft launching the first cloud](https://www.financedigest.com/uk-to-examine-cloud-services-dominated-by-amazon-microsoft-and-google.html "UK to examine cloud services dominated by Amazon, Microsoft and Google") version of its flagship ERP system, Dynamics AX – now known as Dynamics 365 – in 2016. The slow yet steady [shift is happening](https://www.financedigest.com/shift-happens-but-what-are-cfos-in-financial-services-going-to-do-about-it.html "Shift happens. But what are CFOs in financial services going to do about it?") in the ERP market, and those who haven’t yet converted are beginning to consider the possible risks and rewards associated with the move. So, with leading ERP vendors investing heavily in cloud technology, what’s preventing more [businesses taking the leap](https://www.financedigest.com/taking-the-leap-at-50-five-things-i-learnt-from-starting-my-own-business-at-50.html "Taking the leap at 50 – Five things I learnt from starting my own business at 50") right now? **Barriers to uptake** Although the adoption of [cloud ERP has been steady and looks to be undertaken by many more UK businesses in the future](https://www.financedigest.com/the-future-of-cloud-computing.html "The Future of Cloud Computing"), for companies in some countries there are more challenges to overcome first. Although [technological advances](https://www.financedigest.com/the-diabetic-socks-market-to-prove-its-servility-to-technological-advancements.html "The Diabetic Socks Market To Prove Its Servility To Technological Advancements") are being made every day, legislation and regulations aren’t necessarily following at the same pace and, as a result, some countries are being restricted on the uptake of services, such as cloud ERP. For example, the law in [Switzerland currently states that all data must stay in the country](https://www.financedigest.com/switzerlands-engineering-sector-urges-country-to-start-energy-saving-now.html "Switzerland’s engineering sector urges country to start energy saving now"). There is an overall lack of trust in documents being stored in the [cloud with some governments questioning its security](https://www.financedigest.com/dont-let-the-promises-of-virtual-desktop-security-cloud-your-judgement.html "Don’t let the promises of virtual desktop security cloud your judgement"), therefore many businesses are reluctant to fully embrace the cloud and instead opt for an on premise ERP solution. [Market leaders like Microsoft are encouraging people to engage with cloud ERP and have focused efforts on launching and actively promoting cloud ERP solutions](https://www.financedigest.com/the-patient-monitoring-handheld-solutions-market-to-be-constructively-capsized-by-the-digitization.html "The Patient Monitoring Handheld Solutions Market to be constructively capsized by the digitization") over on premise alternatives. This investment demonstrates a confidence in cloud and where Microsoft leads, others will of course follow. However this also presents a problem for some businesses, particularly in the [manufacturing sector](https://www.financedigest.com/expansion-in-manufacturing-sector-has-increased-demand-for-industrial-cooling-system-market.html "Expansion In Manufacturing Sector Has Increased Demand For Industrial Cooling System Market") where there is a reluctance to make a move to the cloud due to concerns about the possible implications that it would have on trade. A number of manufacturers [work on remote](https://www.financedigest.com/it-departments-getting-a-bad-rap-over-remote-working.html "IT DEPARTMENTS GETTING A BAD RAP OVER REMOTE WORKING") sites where a reliable internet connection is sometimes hard to secure. Losing [access to such a vital system](https://www.financedigest.com/telehealth-monitoring-to-rule-the-the-transseptal-access-systems-market.html "Telehealth monitoring to rule the The Transseptal Access Systems Market") could have a detrimental impact on a manufacturing business and cause any number of issues from a delay in production to a breakdown in communication between production and logistics leading to missed shipments to customers. For some businesses, in some sectors or in certain locations, the risk of cloud ERP still out ways the reward and, until legislation is updated and access to high speed [internet](https://www.financedigest.com/luxury-to-essential-latam-boosts-internet-access-in-pandemic.html "Luxury to essential: Latam boosts internet access in pandemic") access catches up with developments in cloud technology, maintaining an on premise solution may be the best way forward. **But when it works, it really works** Although there are challenges for some, for most businesses, the reality is that there are many rewards associated with converting to cloud ERP over sticking with an on premise solution. For starters, cloud ERP solutions are much quicker to implement than on premise, which can take anywhere between 2-5 years to fully install and can take longer to update. Whereas an average cloud ERP implementation can be completed under a year. Businesses can also enjoy large financial [savings as capital hardware costs are removed with the cloud](https://www.financedigest.com/could-the-cloud-save-the-world.html "Could the cloud save the world?") ERP solution. In contrast, on premise ERP systems require significant capital investments, which only increase when buying new [hardware or high end](https://www.financedigest.com/does-softpos-signal-the-end-of-payment-hardware-as-we-know-it.html "Does SoftPOS signal the end of payment hardware as we know it?") servers. On average it’s considerably cheaper to implement a cloud solution over on premise. The cloud solution carries further financial [benefits](https://www.financedigest.com/the-four-benefits-of-digital-transformation-in-the-finance-industry.html "The Four Benefits of Digital Transformation in the Finance Industry"), as due to its subscription license agreement, upfront costs are removed in favour of monthly fees, giving businesses more financial flexibility Research has shown that concerns about cloud ERP security have fallen to 25 per cent\*\*, from the 29 per cent\*\* [recorded last year](https://www.financedigest.com/uk-inflation-hits-40-year-record-highest-in-g7.html "UK inflation hits 40-year record, highest in G7"), showing that there may be an opportunity for vendors to engage with businesses and challenge common misconceptions surrounding cloud ERP; tackle the question of security, reassure customers and promote the efficiency and cost saving available. Another [selling point](https://www.financedigest.com/digitally-projected-revenue-to-be-the-unique-selling-point-of-surgical-chisels-market.html "Digitally projected revenue to be the unique selling point of Surgical Chisels Market") for most organisations looking to streamline their ERP function is the issue of maintenance. A solution hosted in the cloud ensures that maintenance is carried out directly by the vendor, meaning there is less chance of the [system crashing](https://www.financedigest.com/tesla-reports-two-new-fatal-crashes-involving-driver-assistance-systems.html "Tesla reports two new fatal crashes involving driver assistance systems") or general aspects of the service failing. This also has the potential to reduce staffing costs, as there is less need for in-house IT support. Ultimately, there are many variants for businesses to [consider when embarking](https://www.financedigest.com/4-questions-to-consider-before-embarking-on-a-contract-packaging-expansion.html "4 questions to consider before embarking on a contract packaging expansion") upon an installation of ERP and customer communication software. To ensure customers’ needs are met, and all [points considered](https://www.financedigest.com/three-points-to-consider-when-getting-engaged.html "Three Points To Consider When Getting Engaged"), an individual assessment should be a vital first step. With the [cloud ERP market](https://www.financedigest.com/cloud-computing-to-change-the-course-of-the-pharmacokinetics-market.html "Cloud Computing to change the course of the Pharmacokinetics Market") still somewhat in its infancy, it may take a while for businesses to fully embrace it and for on premise solutions to become obsolete but there’s no doubt that that cloud represents the future of ERP. A [future full of rewards for those brave enough to take the leap and open the doors](https://www.financedigest.com/automatic-door-control-market-2022-outlook-current-and-future-industry-landscape-analysis-2026.html "Automatic Door Control Market 2022 Outlook, Current and Future Industry Landscape Analysis 2026") for others to follow. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---