Everything you need to know about cloud ERP + ecommerce

Cloud enterprise resource planning software, or cloud ERP, is a suite of business applications that accesses business data in real time through an internet connection.

Businesses save money with cloud ERP through reduced IT support services, a monthly fee instead of an upfront licensing and equipment costs and no upgrade projects. A cloud-based ERP system provides your organization with one location for all business data and tools for financial management, supply chain management, order processing, customer relationship management (CRM), fulfillment, project management, procurement and more.

Cloud ERP provides you with that advantage, so you can meet the high expectations and constantly changing desires of the modern consumer, while also combating low loyalty rates from Internet-savvy buyers. So when considering cloud ERP versus on premise ERP software, be sure to consider the needs of your customers first ahead of your own business requirements because this will give you the answer you’re looking for.

What is Cloud ERP?

Cloud ERP is a software-as-a-service (SaaS) that allows users to access Enterprise Resource Planning (ERP) software over an internet connection. This solution acts as a system of record for an organization. Data from the financial, distribution, CRM (etc.) systems converge within the ERP in real-time. The ERP acts as a centralized repository for all of the business’ data, integrates business processes, and provides a “single source of truth” for every employee. Additionally (and importantly), users can access the system anytime, from anywhere, using their browser-enabled device of choice.

Moreover, Cloud Based ERP helps automate and help the efficiency of connecting and collaborating with teams across the company. It helps bridge the gaps between these teams, as systems are streamlined for easy access. This creates a matched insight with all teams in a business, allowing them access to perspective to data that can help with their tasks.

By allowing this system to live in the cloud, this can free up local data servers at the company for other information that is more vital and sensitive to the business. When using the cloud, this can allow employees to access these systems remotely and at any time, giving them an advantage when making informed decisions quickly.

Types of cloud based ERP

For Cloud Based ERPs, a company can implement a fully online service. By going through a third party, another company will provide applications for a business to utilize. This will provide a business with unique applications that are best for operations.

Another type of Cloud Based ERP is a hybrid, implementing on-premise and cloud based ERP together to get the best of both worlds. This can be useful for businesses that already have an on-premise plan implemented and are looking to move some resources to the cloud depending on their operation and teams. This is also helpful for teams that have enough resources to implement both and still be cost-effective for their company.

Cloud ERP vs Private Cloud ERP

To fully understand cloud ERP solutions, we must understand the other ERP option available: private cloud ERP. Here’s a look at the two options.

1. Cloud ERP

We’ve already established that cloud ERP options let users access their business applications that run on shared computing resources via the internet. This internet access allows users to integrate easily with third-party applications while also providing the agility and scalability businesses need in a dynamic economy. Cloud ERP vendors shoulder the responsibility for security, updates, and upgrades. Generally, businesses pay a subscription fee based on users or resources used (depending on the cloud ERP vendor).

2. Private Cloud ERP

The main difference between cloud ERP systems and private cloud ERP systems is where the software is physically located. The software is bought, installed, and maintained in a business’ own facility. The organization’s IT department is solely responsible for deploying application software and for the ongoing upkeep and security of the software and hardware. Initial costs for software licenses and hardware can be prohibitive. Remote access, while possible, is not usually an integrated function. Instead, it may require help from a third-party application and device.

Challenges of using private cloud ERP

All ERP options have their unique challenges, but private cloud ERP challenges are something businesses, particularly small-to-medium sized businesses (SMBs), should pay attention to.

For example, private cloud ERP solutions can sometimes cost more to implement and maintain with a larger capital expenditure upfront. Businesses are forced to keep a full-time IT staff on hand. Private cloud solutions frequently require longer times to deploy, require more hardware to accommodate added users, and may lack mobile accessibility. 

Also, private cloud ERP solutions are often legacy systems that lack modern integration capabilities. The result is siloed teams (marketing, sales, finance, and IT not on the same page) and customers suffer as a result. Cloud Based ERP has its host of challenges as well.

• Constant cost
  Although cheaper in the short run, a subscription-based method could prove to be a costly method in the long run. As services are constantly updating, there is a chance of costs increasing as well as maintaining a certain cost throughout a longer period of time.
• Less control
  Since the software is managed by a third party vendor, if there are issues on their end, that will affect the companies that use them as well. With less control on downtimes, poor updates, and support systems, this can lead to a reduction in efficiency that can ultimately hurt a business without it being their fault.
• Training sessions
  Training employees on new skills is always a positive and important aspect of a business, however teaching workers a system that was not created locally by a team that knows their needs can sometimes prove to be difficult. It’s important to know which system you are using and bring in experts on that system in order to create an easier environment for employees to learn.
• Customization options
  Most cloud ERPs can be customized; however, the options tend to be less than when created on a local data server. Since these services are provided by a third party, they will have more control over what options are customizable or not.
• Compliance Issues
  Some businesses, due to compliance, cannot store or host sensitive information in the cloud, therefore having this is an option isn’t viable for all companies.
• Employee agreeance
  Having a large IT staff can prove beneficial not only for internal success but also for more positions within a company. Making sure the entire company/all teams agree to a cloud based ERP is important for team morale and employee retention.

When does a cloud ERP make business sense for an online store?

Now that we understand the differences between the different ERP solutions available (and the challenges), it’s time to bring ecommerce back into the picture. 

Ecommerce businesses require an ecommerce platform to get their products/services in front of their customers and into their customers’ hands. An ecommerce platform is a software application that allows online businesses to manage their website, marketing, sales, and operations. 

According to IDC’s Whitepaper, whichever ecommerce platform businesses choose, it must combine seamlessly and natively with an ERP solution preferably, a cloud ERP solution. “The most successful digital businesses are those that have an overarching digital transformation strategy and select ERP and digital commerce systems that are tightly integrated or coupled,” IDC analysts write. “Importantly, a future-proof digital business platform leverages modern SaaS systems built for the cloud.”

A cloud ERP solution always makes good business sense for an online store, and the benefits of cloud ERP systems bears this out.

Steps of cloud ERP implementation

By now, connecting a cloud ERP solution with an ecommerce platform for ecommerce business success may be sounding like a wise decision. If so, there are a few steps to take when choosing and implementing a cloud ERP solution. It’s important to note that cloud ERP providers may differ slightly in the number and naming of steps, but the end result is the same: ecommerce success.

1. Research 

In step one, ecommerce businesses should take the time to research their options thoroughly. Comparing and contrasting the many cloud ERP systems on the market today may take some time but rushing through this part of the process could lead to making a poor choice. 

One easy way to research and then evaluate options is by using an evaluation checklist. It helps businesses compare the features and benefits of different vendors based on five categories: Productivity, Functionality, Technology, Value, and Risk. 

Using this checklist (or any like it), checking out what technology analysts have to say about various cloud ERP options, and reading customer reviews will go a long way toward helping businesses find the right system for them.

2. Installation

Step two is installing the software. This first requires the assembling of an internal team to help with the installation. These teams often include an Executive Sponsor, a Project Lead (or Project Manager), a Technical Lead and Subject Matter Experts (SMEs).

Within this step is the need to define your requirements. For Acumatica customers, requirements are classified as essential, desirable, not an immediate need, and nice to have. The result is a list of features and functions that are affordable and fit the timeline for the project.

3. Migration

The migration of data from the old system to the new is a complex process, but a checklist can help make it orderly and defined. Acumatica’s data migration checklist is a good example:

• Ensure all existing customer contact information is accurate and up to date
• Remove incorrect or redundant data (discontinued vendors, contacts no longer with the company)
• Remove incorrect or out-of-date company data (old part numbers, discontinued products).
• Set up your Acumatica database
• Map your legacy ERP data to the new Acumatica database fields
• Transfer the data to the new system
• Test the new system to verify all legacy data has been moved and is accessible
• Verify new data can be added to the system (new product information, inventory item location, new customer information)

4. Testing

Before any new product or service is placed into the hands of a customer, it should be tested and approved. Cloud ERP vendors will have their own methods and procedures for developing a test plan, but most test plans will test each requirement within the system. The testing may follow these general guidelines:

• Objective: purpose of the test
• Requirement: the specific requirement being tested
• Setup: required system configurations to carry out the test
• Procedure: step-by-step process to carry out the test)
• Test Data: if necessary an SME can produce this and test data should represent real-world situations
• Expected Result: the results that should be produced if the system is performing according to requirements 
• Pass/Fail: determines if the test was successful
• Comments: added observations, system behavior, and partial successes
• Training

Training is an incredibly important step. If users and system administrators are not trained correctly from the beginning, they may not get on board fully and the new cloud ERP system will not be utilized to its full potential. 

The cloud ERP vendor should provide training assistance as well as the training courses and documentation needed for a complete training experience.

5. Deployment

Deployment is also called “go-live.” This is the big day (or days), and the cloud ERP vendor will be on hand to hit the go-live button. 

The first decision during this step is deciding when to go live. This is typically on a day or days that will impact the business the least. From there, businesses will need to decide if they want to activate the new system and deactivate the old system simultaneously, if they want to move forward in a phased approach, or if they want to have the systems running at the same time. 

Whichever activation method is chosen, the end result is a business running on a flexible, mobile cloud ERP solution but there is one more thing.

6. Support

After the excitement of a successful go-live, there are always questions and further assistance, such as the possible need to integrate with third-party and custom applications. The cloud ERP provider should be on hand as the business continues to refine their business processes and for any ongoing support needs.

Top benefits of cloud ERP

Outside of the cost savings and tools, cloud ERP software offers significant benefits. With features like mobile platforms and Internet of Things (IoT), cloud-based software is leading the way with innovation. Cloud ERP software vendors are mastering business processes of the future by integrating tools that are intuitive and focus on reducing manual tasks. Some key benefits include:

• Automation: ERP software not only provides one source of business information for your business, it also aids in streamlining processes. An aspect of that is automating manual tasks to save you time and allow you to perform jobs that require more human involvement. Tools like artificial intelligence (AI) and machine learning can not only analyze information and forecast trends but can also learn rules and exceptions for specific processes.
• Collaboration: Cloud ERP is built for collaboration. Users can access business information remotely and work with colleagues through cloud ERP software using internal communication features. Additionally, sharing data between departments can be as simple as granting permissions for access.
• Better insight: Business information tools are embedded in cloud applications, providing context to the real-time access to data. Additionally, modern user experience (UX) presents information in an organized, consumable manner through tools such as dashboards, infotiles and infolets.
• Continuous updates and new functionality: Cloud software doesn’t require upgrade projects in order to take advantage of new tools or improved security. Software updates and new functionality are deployed automatically following their release, meaning all customers are running the same version of the software at any given time.
• High availability: Cloud ERP systems have low downtime. In fact, Oracle guarantees 99.5 percent availability and averages 99.96 percent uptime. This reduces the workload of your internal IT team and promises near-continuous access to your business data.
• Cost-efficient: Going with a system in the cloud is typically cheaper than creating a local data server because there is not an upfront cost for this service. Payments are made with a subscription method (typically monthly) so it is easier to manage.
• Reduction in IT support cost/Infrastructure: In addition to fewer upfront costs to integrate the system, a reduction of IT staff will help save costs as well. The service is managed by a third party vendor, reducing the need for IT staff in that department.
• Security: This benefit can be seen from both sides, however, the biggest benefit of having these systems accessible via the cloud is because they will not be accessed on local data servers. Having both can help store certain information in different places, creating a different sense of security with the possibility of a cyber-attack. Keeping information in the cloud can be safe instead of on local servers.
• Recovery: Alongside security, being able to recover data in the cloud at the possibilities of a local attack can be beneficial as well. Viewing cloud based ERP as a backup system can be valuable to a company with lots of sensitive information.
• Updates: Streamlining SaaS through a third party vendor, a company will not need to handle any updates to applications or software on their end. This can help check one thing off in a long list of tasks and focus on training for these new updates in order to stay up to date with their service.

Are you ready to evaluate a new Cloud ERP system?

The cloud enterprise resource planning software market is becoming crowded, with several available options from multiple vendors. However, not every platform meets the needs of all companies, and selecting the right cloud based ERP solution is an important decision. 

Let RSM help you with the cloud ERP selection process; we can show you how to evaluate critical aspects of available platforms to support your unique needs. Learn how to evaluate the available cloud-based ERP solutions in our “Cloud ERP selection guide for the middle market.” The guide details how to:

• Avoid common challenges
• Create your ideal ERP selection checklist in order to select the best cloud based ERP for your business
• Understand current ERP trends
• Compare today’s cloud ERP platforms (such as Microsoft Dynamics 365, Oracle NetSuite and Sage Intacct)
• Choose an effective implementation partner

Cloud based ERP solutions for small business

For many small businesses, going with a cloud based ERP can prove massively beneficial. By streamlining ERP software to a smaller team, this can help give everyone perspective and insight to not just other teams, but the company as a whole.

This will bring together all teams and boost organization, as operations will be available for everyone easily. With teams knowing each other’s workflows and systems, this can help teams collaborate better and improve each other’s efficiency.

Although a cheaper option than a local data server on-premise, the monthly subscription cost of an ERP system can still be too great for a smaller business. There are some free ERP software systems, so smaller businesses should take advantage of those and grow their business before expanding further.

In addition to finding cheaper or free services, it’s important for businesses to do their due diligence by researching these software services. There is not a perfect fit ERP system for all companies, so it’s important to research what is necessary and take into account possible subscription costs. Most ERPs have a free trial, so it’s important to note these and take advantage of them if they are available.

Wrap up

Cloud ERP systems are now a very common business solution. In fact, many of the traditional on premise ERP providers now also offer some kind of cloud-based deployment option, or are completely axing their on premise solutions altogether.

There are many benefits and challenges when looking into a cloud based ERP. The most important part is finding the right software that best fits the needs of the company. Whether it is local data servers on-premise or using an outside party’s software services, finding the best method for a business will help teams improve performance and bring more revenue to a business.

SaaS businesses are businesses also, so it’s important to pick the right partner in order to create a relationship that will benefit both sides. Both businesses are looking to improve their own services and software, and this can be done together. Once the right partnership is found, efficiency and productivity will increase exponentially.