In recent few years, cloud computing has been dramatically developed and become the area of focus to general public ranging from normal users to businesses. And the phrase “To cloud or not to cloud” is considered as a familiar question in any IT strategy these days. Similarly, not only is “cloud” no longer a strange term for enterprise applications, but also has been the prominent trend.
Source: Google Image
What is cloud computing?
As a claim by Berry, cloud computing could be understood as the delivery of computing services over a network that is a proprietary network or even the Internet. Those services are mainly infrastructure, platforms and applications. In simple words, Griffith (2016) states that the cloud here is a metaphor of the Internet; and cloud computing refers to store and access data or programs through the Internet instead of your device’s hard drive.
Source: Google Image
A typical example of cloud computing for normal users is Google Drive where your data is stored and cloud applications such as Google Docs and Google Sheets can be also found online. Moreover, the drive can be accessed by various types of device from PC, tablet or smartphone. Another recent example is Office Online offering web-based version of Word, Excel, Power Point and One Note, which means users can access these applications via web browser without installing anything.
Business benefits of cloud computing
According to Jameson (2013), cloud computing offers foreseeably great business benefits helping to increase the efficiency of the shared resources.
- You can work from anywhere you want. It is very flexible, isn’t it? It seems that cloud computing also creates a trend of virtual office allowing employees to connect and access their data from everywhere.
- You always get updated, which is really vital to get improvements and solutions for business demand. So you can get the latest updates within a blink eye through cloud computing.
- Business data, even confidential data is often stored in kinds of device like PC, tablet and smartphone, which pushes data into the risk of loss such as in the case of these devices are damaged or stolen. Cloud computing helps to control and protect data even if bad things happen to devices.
- Disaster recovery plan is always complex, especially for small businesses. Cloud computing makes it become a piece of cake as it saves much time and effort.
- It is environmentally friendly due to it cuts a certain amount of energy and emissions. Consequently, businesses save much resources for environmental issues.
ERP is moving to the cloud
As the result from a survey conducted by Gartner in America in 2014, there are 2% of business firms already having core ERP in the cloud and 47% of surveyed organizations have plan to move their core ERP systems to the cloud within next 5 years. ERP cloud has become fashionable or it is a critical move in IT strategy of enterprises. Let’s glance on why ERP should be moved to the cloud.
- Cloud-based ERP solutions spend lower TCO (Total Cost of Ownership) than on-premise systems. Obviously, businesses do not need to heavily invest on hardware and facilities to run the systems because infrastructure services are provided by ERP vendors. Later on, a huge amount of IT budget can be cut and spent on innovation rather than managing and maintenance the systems. Besides, TCO of cloud ERP solutions is easier manageable due to it clear and predictable subscription based monthly or annual fee. This advantage then effectively impacts on enterprises’ cash flows as well as planning and budgeting activities.
- As mentioned above, it is really important for enterprises to keep updated; and cloud ERP can offer much faster deployment. According to Yvanovich (2016), cloud-based ERP solutions can potentially reduce the deployment time by 75% compared to on-premise ERP systems. Furthermore, IT infrastructure is handled by the vendor, which sets enterprises more freedom to scale when their business grows. They just need to conduct simple steps to allow more employees to access into the system or to expand to multiple locations.
- Nowadays, big enterprises recognize themselves competing with many smaller players and start-ups who are not held back by pre-Internet softwares, which is actually a big advantage. In order to play the game, these big players need to quickly adopt new business models (such as launching totally new products/ services or changing new price structure) that demand a more flexible system. And McGeever (2016) says that cloud ERP is a solution meeting that requirement.
- In parallel, M&A (Mergers and Acquisitions) has also gained currency in the business world, which makes cloud ERP become a more attractive alternative for enterprises growing through acquisition to overcome difficulties on on-boarding a new company. Apparently, cloud ERP brings more advantages and helps acquiring enterprises to easier move compared to on-premise ERP systems.