The ultimate guide to cloud ERP Systems

Cloud ERP software is the latest technology in business management. But what is it, and why is it taking the business world by storm? Learn all about it here.

Last updated: 26.03.2024 10 mins read

Traditionally, businesses were under the whim of a manager struggling with inefficient spreadsheets or a company placing its future in the hands of an ERP system that hasn’t seen an update since the Reagan administration.  

Thankfully, those days are long gone, and businesses looking for a tool to manage their business can turn to cloud ERP systems.   

But what are they, and how do they work? In this article, we’ll explore the world of ERP cloud services so you can better understand how they fit into business management and how you can choose one for your operations.

What is cloud ERP?

Cloud enterprise resource planning (ERP) is a software system enabling companies and organizations to manage their essential business operations online.  

It helps:  

Cloud ERP enables companies to make more informed decisions to grow their business. It also provides users with secure access to their data from any device connected to the internet. It can also be integrated with other collaboration applications, enabling teams in different locations to stay connected and work together efficiently.  

Since success in today’s world increasingly depends on digital transformation, cloud ERP has many advantages for companies of all sizes and in all manufacturing industries.  

By leveraging technology like artificial intelligence (AI) and machine learning, cloud ERP can enable companies to automate and optimize manufacturing processes, gain real-time insights into their operations, and improve customer service. It also helps reduce the manual work required to manage day-to-day tasks and processes, freeing employees’ time for more strategic activities. Cloud ERP is invaluable in driving innovation and achieving a competitive advantage in today’s digital economy.  

With powerful analytics capabilities built into a unified platform, organizations can access data quickly to make better-informed decisions that drive growth.   

Cloud ERP solutions are cost-effective and easy to deploy because they don’t require any additional hardware or software installations. As a result, companies may use the most advanced technology while saving time and money.  

Cloud ERP provides organizations with a comprehensive solution that helps streamline operations and ensures all data is secure. By giving users access to their data from any device connected to the internet, cloud ERP enables businesses to stay connected and leverage insights in real time. This leads to:  

  • Improved decision-making  
  • Cost savings  
  • Better customer service  
  • Increased efficiency across all departments  

With cloud ERP solutions becoming increasingly powerful, businesses have more opportunities to get ahead of the competition by utilizing the latest technology for success. 

What are the 5 components of cloud ERP Software?

Two workers in an office looking at bill of materials on their ERP and CRM software.

Cloud-based ERP software can be broken down into five main components:  

  1. User interface  
  2. Data management  
  3. Process automation  
  4. Workflow tools  
  5. Analytics  

1. User interface

The user interface is the way that users interact with the system. It should be intuitive and easy to use to not impede productivity. Users should be able to quickly find what they need and perform their tasks in a few clicks or taps.   

2. Data management

Data management allows companies to store their data securely in the cloud while keeping it organized. This helps ensure that information is up-to-date and accessible when needed by different organizational departments.  

3. Process automation

Process automation allows certain processes without manual input from an employee or supervisor. By automating processes, an organization can save time and money while increasing efficiency.   

4. Workflow tools

Workflow tools make it easy to coordinate tasks and activities between different departments or individuals in the company. These tools help streamline operations to complete work correctly and on time.   

5. Analytics

Analytics enables organizations to see how their processes are running, where there are areas of improvement, and what kind of ROI they can expect from their ERP system. By readily making this data available, organizations can gain valuable insights into their business operations. 

Cloudwards highlights the importance of choosing the right cloud storage solution to complement these ERP components.

On-premises ERP vs. Cloud-based ERP systems

The main difference between On-premises ERP and Cloud-based ERP systems is how they are hosted.

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On-premises ERP systems

Require the customer to purchase, install, and manage hardware on their premises. This means the customer must ensure the hardware is up-to-date and running optimally.

Cloud-based ERP systems

Hosted in a secure cloud environment by either an application service provider or an internal IT team. This system requires no upfront investments from the customer. Instead, customers pay a subscription fee for access to the services provided. This system type eliminates many of the maintenance costs associated with on-premises solutions since the service provider manages upgrades.

Cloud-based ERP systems can offer more flexibility and scalability than on-premises solutions as they can be easily customized to suit the needs of an organization. A cloud-based ERP system is typically more secure than an on-premises solution since it is hosted in a secure environment with built-in security features.

While both types of systems have advantages and disadvantages, cloud-based ERP systems often offer more cost savings and flexibility for organizations that adapt quickly to changing business needs. 

The main differences between On-premises ERP and Cloud-based ERP systems include: 

  • Hosting type 
  • Maintenance costs 
  • Flexibility and scalability  
  • Security 

On-premises ERP systems require the customer to purchase, install, and manage hardware on their premises. Cloud-based ERP systems are hosted in a secure cloud environment with no upfront investments from the customer.  

Cloud-based ERP systems offer more scalability and flexibility than on-premises solutions and enhanced security features. 

How does ERP cloud software improve business efficiency?

A working using chemical manufacturing software to help make a final product.

ERP cloud software helps businesses and manufacturers become more efficient in many ways.  

It streamlines operations by providing a single platform for managing all business processes, including: 

  • Finance   
  • Inventory   
  • Sales   
  • Marketing   
  • Customer service   
  • Manufacturing   

This reduces the need for multiple systems that can be complicated to use or integrate.  

ERP cloud software also enables companies to access data from any device with an internet connection — allowing them to make faster decisions without waiting for onsite IT resources or hardware upgrades. It enables businesses and manufacturers to track their production costs better and improve forecasting accuracy. By providing real-time visibility into operations and production performance across the entire enterprise, ERP cloud software helps organizations optimize their processes and ensure they are meeting customer demands in a timely manner.  

Overall, ERP cloud solutions are essential for businesses and manufacturers seeking to improve efficiency and profitability.

What are the 4 advantages of Cloud ERP?

Cloud ERP offers several advantages for manufacturers.  

1. Managing data

With a cloud-based solution, manufacturers can access their data from anywhere. This provides flexibility and agility to manage operations remotely and respond quickly to customer needs.  

2. Cost-effectiveness

Cloud ERP also eliminates the need for costly hardware investments by reducing IT infrastructure costs. Additionally, it simplifies upgrading software as new features are released, helping manufacturers stay updated with technology trends.  

3. The best security

Finally, cloud ERP allows manufacturers to scale their resources according to business demands while maintaining security standards with built-in data encryption and multi-level authentication protocols.  

4. Integration capabilities

Cloud-based solutions are designed for easy integration with existing systems, so manufacturers can continue using their favorite tools while enjoying all the benefits of Cloud ERP. With this in mind, it’s no surprise that many manufacturers are turning to Cloud ERP as an effective solution for enhancing operations. 

The key takeaway is that manufacturers who use cloud ERP can enjoy are increased:  

  • Flexibility    
  • Security     
  • Scalability    
  • Cost savings   

This can help them stay ahead of the competition and take business to new heights.

Cloud ERP system challenges to overcome

Emergency stop button being pressed by a worker, an example of a manufacturing challenge.

As a manufacturer, it can be challenging to determine the best cloud ERP system for your needs. A variety of challenges exist that must be addressed to ensure that an effective system is put in place. 

Challenge #1 — finding software that supports your business

One challenge is selecting the right system for your organization’s size and industry.  

The right cloud ERP will provide scalability and flexibility depending on the changing needs of the business, as well as integration with other systems. It should also meet applicable industry-specific standards such as compliance requirements or production processes. Ensuring the proper resources are allocated to implement the system correctly is another important factor when selecting a cloud ERP. 

Challenge #2 — Implementation

Another challenge involves understanding how a new cloud ERP will fit into existing operations and procedures.  

To ensure a successful implementation, it is important to consider how the system will integrate into existing processes and systems. It is also essential to be aware of any security requirements that must be met, such as data encryption or two-factor authentication. 

The cloud ERP needs to offer reliability and availability of service to ensure that operations are not interrupted by technical issues. The provider should have redundancy and backup measures in place and support services available in case of problems with hardware or software. It is also important to know what maintenance or upgrades are necessary for the system over time. 

Challenge #3 — Understanding the costs

Understanding the cost associated with a cloud ERP system is another challenge for manufacturers. 

Costs can vary greatly depending on the provider, system, and other factors. Understanding what is included in the pricing is essential for avoiding any unexpected costs down the line. 

Overall, there are many challenges to overcome when selecting a cloud ERP system for a manufacturing organization. By carefully assessing each factor beforehand, manufacturers can ensure that they select an effective system that meets their needs and budget. 

There are also certain data-related considerations to consider when implementing a cloud ERP.  

Before installing, you have to consider factors such as: 

  • Data migration   
  • Integration of external sources   
  • Access control measures   
  • Data security protocols   

It is important that users have easy access to information while maintaining data integrity and security. By addressing these data-related issues before the system is in place, manufacturers can ensure that the cloud ERP meets their needs effectively.

How to choose the right cloud ERP?

Is essential if you’re looking into improving your entire manufacturing business.

Choosing the right cloud ERP system is an important decision that requires thought and consideration. Many ERPs are available on the market, so knowing which one best suits your needs can be difficult. The following tips can help you determine the right cloud ERP for your business:  

  1. Define your requirements — When selecting a cloud ERP, you must create a list of requirements your chosen system should meet. Before deciding, consider factors such as scalability, features, user experience, and integration.  
  2. Consider your budget — Every business has its own budget constraints, so consider yours when selecting an ERP cloud solution. Look into price points for various systems and ensure you get the most bang for your buck. 
  3. Research available options — It’s important to research cloud ERP solutions available in the market. Read reviews, speak to experts, and compare features of different systems. 
  4. Think about customization — Check whether customization options are available with the ERP system you’re considering choosing. Some solutions allow users to modify settings or create custom modules to meet their unique requirements. 

By following these tips, you should be able to select the best cloud ERP system for your business. Remember that it’s important to consider your options before making a final decision. 

If you’re searching for a cloud ERP system for your business, then why not take Katana Cloud Manufacturing for a test drive? Get a demo and see why thousands of manufacturers already use Katana to automate and manage their entire business.   

The 7 best ERP software for manufacturing in 2023

Want to get a head start on compiling your shortlist of the best manufacturing ERP software on the market? Be sure to check out our guide and analysis of the cloud ERP systems available on the market. Click here to read more.

Cloud ERP system FAQs
Are cloud ERP systems secure?

Yes, cloud ERP systems are secure.

Security measures for cloud ERP systems include secure data centers that use 24/7 surveillance and monitoring, multi-tiered authentication based on user roles and permissions to limit person access to sensitive data, physical security with locks and alarms, vulnerability scanning to identify any potential threats or loopholes in the system, encryption of data both at rest and in transit to protect confidential information from unauthorized access, regular backups of data in redundant locations for recovery purposes, and a dedicated team of IT professionals who are always ready to respond if any security issues arise.

All these measures ensure that your organization’s valuable business data is kept safe when using cloud ERP systems. Furthermore, organizations can add unique security protocols such as 2-factor authentication and access control to secure their data further. By using cloud ERP systems, companies can keep their data safe while still taking advantage of the scalability and flexibility of an ERP system.

Why choose an ERP in the cloud?

An ERP in the cloud offers many advantages for modern manufacturing businesses.

Cloud-based ERPs provide businesses with high levels of scalability, allowing them to expand without investing in expensive hardware. Cloud ERPs also provide more control and transparency over operations, giving managers greater insight into where resources are used and how they perform. By automating inefficient processes and streamlining workflow, a cloud-based ERP can help reduce operational costs while increasing efficiency.

Additionally, cloud-based solutions offer increased data security and access from any device connected to the internet, so companies can work remotely or on the go. These benefits make a cloud-based ERP an ideal choice for modern manufacturing businesses that want to stay competitive in today’s market.

By investing in a cloud-based ERP, manufacturing businesses can maximize their resources and ensure that operations are running smoothly and efficiently. With greater control over data, increased scalability, and improved security, companies can enjoy the benefits of an optimized business model without investing heavily in hardware or software. A cloud-based ERP is essential to keeping up with the competition and staying ahead of the curve when it comes to modern manufacturing solutions.

The decision to invest in an ERP in the cloud is wise for any modern manufacturing business. Companies can enjoy increased efficiency, better data security, and improved scalability by taking advantage of all cloud-based ERP offers. Investing in a cloud-based ERP will become increasingly important as companies continue to look for ways to optimize their operations and stay competitive. With the right solution, businesses can benefit from the many advantages of an ERP in the cloud—all while enjoying greater control over their data and operations.

In conclusion, ERP cloud services provide numerous benefits for modern manufacturing businesses looking to remain competitive and maximize resources. A cloud-based ERP offers businesses an ideal solution for managing their operations more effectively, from enhanced scalability to improved security measures. Investing in the right cloud-based ERP can be instrumental in helping any modern manufacturing business stay on top of trends and remain successful in the future.

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James Humphreys

Senior Content Manager

James Humphreys has produced content on manufacturing and inventory management practices for 5+ years. He began his journey into writing via the creative industry, writing and producing plays, some of which toured the UK and Europe.

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