Cloud ERP System: Features, Advantages, And Disadvantages

Enterprise Resource Planning Software and Its Major Features

The enterprise resource planning or simply ERP could be eventually stated as one of the integrated controlling of major business procedures in real time. These business processes are solely mediated by technology and software (Leon, 2014). The enterprise resource planning is the significant category of the businesses as the respective management software. There is a specific suite of the integrated applications, which the company could utilize for the purpose of collecting, storing, managing as well as interpreting the sensitive or confidential data from the several business activities (Chiu et al., 2014). This ERP software gives a continuous and integrated upgraded overview of major business procedures with the help of common databases that are maintained by the DBMS or database management system. These systems of enterprise resource planning can easily track the business resources like production capacities, raw materials and cash. Moreover, the status of the several business commitments such as payroll, purchase orders and orders. These types of applications allow this particular system to share the data in each and every department (Shaul & Tauber, 2013). The flow of information between the departments is well facilitated within the business functionalities and hence proper connections are managed with the outside stakeholders with an ERP system.

The following report outlines a brief description on the cloud ERP system and its various features, advantages and disadvantages. The technology of cloud computing is the most important technology to transfer the confidential data from any one location to another. As the information flow from one department to the other is vital, the cloud computing technology is highly required for all organizations (Das & Dayal, 2016). The cloud ERP software often hosts the platform of cloud computing for the purpose of obtaining access of the enterprise’s data centre. The various advantages, disadvantages and features of cloud ERP system will be depicted in this report with relevant details.

The enterprise resource planning software is considered as one of the important and significant software that helps to integrate several business operations and processes (Hoch & Dulebohn, 2013). This particular software comprises of some of the major features and all of these features are provided below:

1. i) Process Streamlining: The first significant feature of this ERP or enterprise resource planning software is that this specific software helps to streamline the business processes. All of the organizations have various business processes and operations and these processes should be executed properly (Garg & Garg, 2013). If the business processes are not executed perfectly, the business would be a major failure. Moreover, this type of process execution even increases the resource consumption. Thus, streamlining of processes is mandatory to mitigate each and every business related issue.
2. ii) Encourages Customer Relationship Management: The next feature of the ERP software is that it encourages the CRM or customer relationship management. The relationship with the customers is extremely important for fulfilling the needs (Chofreh et al., 2014). The interactions of the organizations with their customers are the major requirements of those organizations and these are retained by the CRM. Moreover, enterprise resource planning even allows data analysis of the customers and this is important for customer relationship management.

iii) Reduction of Time Consumption: ERP system helps to decrease the overall consumption of time subsequently and thus the time consumption is kept low. ERP software is popular for each and every company (Matende & Ogao, 2013). The consumption of time even reduces the costs of the organizational processes.

Advantages of Enterprise Resource Planning Software

The major benefits of the enterprise resource planning software are provided below:

1. i) Helps in Providing Higher Efficiencies: ERP software is responsible for providing high efficiency to the users and thus the respective repetitive processes could be easily eradicated as well as removed (Das & Dayal, 2016). The major reason for this is that the software of ERP could easily decrease the manual data entries and hence enables streamlining of the business procedures.
2. ii) Helps in Providing Competitive Advantages: The significant software of ERP helps to provide major competitive advantages or benefits for the organizations that have implemented it (Zeng & Skibniewski, 2013). This is mainly because the organizations could eventually obtain better efficiency and effectiveness and hence the popularity rises to a greater level.

iii) Cost Effectiveness: The next important advantage of the ERP software would be that this is highly cost effective and hence can be easily afforded by everyone. Since, it does not incur huge costs; any medium sized company has the ability for affording this particular software (Shen, Chen & Wang, 2016). Moreover, the various expenses related to the administration and operations are also reduced the enterprise resource planning software.

1. iv) Provides High Collaboration: The enterprise resource planning software is even responsible for providing higher and better collaboration to the respective user organization (Yeh & Xu, 2013). Since, business process collaboration is extremely important for any business, the presence of enterprise resource planning software makes it much simpler than any other software.

Although, the enterprise resource planning software consists of some of the most important and significant features and advantages, there are some of the noteworthy disadvantages that make this software often problematic for the users (Ha & Ahn, 2014). These issues are provided below:

1. i) Issues in Migrating Data: The first significant issue with this ERP software is that the data or any other service migration is extremely difficult here.
2. ii) No Security: The second important demerit of this software is that there is absolutely no security to the data that is to be migrated (Antero, 2015). Thus, the data loses integrity and confidentiality eventually.

iii) Higher Indirect Costs: Although, this software of ERP is cost effective in nature, the total indirect cost of the software is much higher in comparison to any other software.

Cloud computing is considered as one of the most secured and the safest methodology to transfer data from one location to the other (Arora, Parashar & Transforming, 2013). There is a significant usage of several resources with the cloud computing technology. Some of the most significant aspects of the cloud computing technology are present and all of these are given as below:

1. i) Elasticity as well as Resource Pooling: Cloud computing technology enables elasticity and resource pooling for each and every client. These clients could eventually expand and contrast the requirement of various resources according to the demands and thus excessive use of resources could be removed (Dinh et al., 2013).
2. ii) Service Quality: The second noteworthy feature of the cloud computing technology would be that this technology helps in improving service quality and to acquire the major service quality, this technology is utilized by everyone.

iii) On Demand Services: This specific technology of cloud computing helps to provide on demand services and is completely based on self services or service models (Hashem et al., 2015). A proper interaction is required in the cloud technology to perform the required tasks.

The major advantages of the cloud computing technology are given below:

1. i) Easy Implementation: The cloud computing technology could be easily implemented since the architecture is extremely simplified.
2. ii) Easy Access: The accessibility of this particular technology is quite easier and data could be accessed easily (Fernando, Loke & Rahayu, 2013).

iii) Provides BCP: The business continuity planning or BCP is the next important benefit of this technology.

1. iv) High Flexibility: Cloud computing technology provides high scalability and flexibility for better data and service migration.
2. v) No Complexity: There is absolutely zero complexity in this technology, since the architecture is quite simplified (Rittinghouse & Ransome, 2016).
3. vi) Data Recovery: Cloud computing allows data recovery and thus even if the data is lost, it could be easily recovered.

Although, this system of cloud computing consists of some of the most important features or benefits, few of the important demerits, which make this often at risk for its clients.

1. i) Issues with Bandwidth: There is a major issue with the bandwidth, since the bandwidth needs to be increased or decreased (Garg, Versteeg & Buyya, 2013).
2. ii) Security Issues: Cloud computing has major issues with the security and privacy and hence data is often lost in this service.

iii) No Control: This particular technology has no control on the data or the services and thus is termed as vulnerable for the users.

Cloud enterprise resource planning system is the specific type of ERP software, which could be hosted over the respective proposal of the cloud computing. Their own data centre of any particular company is hosted by this software (Jain & Paul, 2013). There are several different parts in a business, like inventory management, purchasing, finance management, CRM as well as SCM. The several applications of ERP even incorporate some of the major aspects of HCM and HRM. Cloud ERP system can be referred to as the significant kind of SaaS model of the cloud computing that helps to increase the total accessibility through the connection of Internet and even enables its users for sharing and transferring data in every business department and even externally. Real time data transfer is highly encouraged in this software and since this is cloud hosted, the businesses are being notified for any update to software (Antero, 2015). The other characteristics of the cloud based ERP software is that the availability, backup and certain disaster recovery plans are provided for the core purpose of reducing any type of interruption to this software.

Disadvantages of Enterprise Resource Planning Software

The payment modes are also easier in this type of software. The enterprises could easily pay for the utilized resources in every month and a fixed payment of the upfront cost is eliminated (Kurbel, 2016). Since, they is no fixed payment for the resources, the user have to pay for only resources that are being utilized. Moreover, the requirement of the additional hardware or maintenance on site is eradicated and hence the operating costs are decreased. As change is important in every business, the respective enterprises could easily alter the amount that is to be used for the scale resources and cloud services. The most significant dissimilarity between the on premises ERP and the cloud ERP software is the physical location of this software (De Toni, Fornasier & Nonino, 2015). The overall business productivity is majorly incremented with the presence of software and the growth of the business is highly affected by this. The substantial up front expenses for the software and hardware are reduced by the cloud ERP software.

Some of the major and important features of this cloud ERP are as follows:

1. i) Easy Usage: The vital characteristic of this cloud based ERP software is that the total usage of the system is extremely easier in comparison to any other system (Farzaneh, Vanani & Sohrabi, 2013). The lack of complexity makes this system quite popular for the users and this system could even be implemented easily.
2. ii) Proper Customization: The overall customization within the cloud ERP software is much simpler and various tasks could be easily customized with this software.

iii) Customer Service: The third important feature of this software is that it provides customer services constantly and hence the customers are much happier with the organizational services (Sadat Safavi, Amini & Javadinia, 2014).

1. iv) Flexibility or Scalability: Another important and significant characteristic of cloud based ERP system is that the flexibility and scalability is being provided to their users.
2. v) Provides Integration: The fifth imperative feature of this cloud ERP would be that it provides integration. The previously existing applications could be easily worked with this software. Various integration points are considered in this case (Zeng & Skibniewski, 2013). The major business applications were file transfer capabilities like export and import of PDF, JPG or any other file, system to system application like enterprise resource planning to the existing customer relationship management or human resources management and finally module to system application, such as payroll of enterprise resource planning to the existing human resource management (See Appendix).
3. vi) Easy Up Gradation: The final important feature of this cloud ERP software is that it allows easier up gradation to the clients. This helps to reduce the major complexities of the software to a greater level.

There are some of the most significant benefits of this cloud ERP system and these advantages are provided below:

1. i) Reduces the IT Supports: Cloud based ERP software helps in decreasing the supports of information technology.
2. ii) Highly Cost Effective: The cloud ERP software is absolutely cost effective and thus it is afforded by each and every user in their business.

iii) Provides DR Plan: The next important benefit of this particular software is that it provides disaster recovery plan and hence the data that is being previously lost, could be eventually recovered (Garg & Garg, 2013).

1. iv) Stops Attacks: Another vital merit of this software is that it helps to stop the several attacks that could be extremely vulnerable for the intended users’ systems. These types of attacks are often caused for the lack of security or firewalls (Chofreh et al., 2014). However, cloud ERP software comprises of an in built firewall within its architecture, which helps to detect as well as stop the attacks substantially.
2. v) No Hardware Installation or Implementation: There is an absolutely zero requirement of the hardware installation and implementation and hence the overall architecture is quite simplified in comparison to any other system.

Although, this system of cloud based enterprise resource planning consists of some of the most important and significant features and advantages, there are some of the noteworthy disadvantages that make this software often problematic for the users (Shaul & Tauber, 2013). All of these demerits of cloud ERP system are provided below:

1. i) Issues with Integration: The most important disadvantage of this cloud ERP software is that there is an issue with the integration. Since, the integrating the business procedures become a major problem with the presence of cloud ERP software, often users try to avoid this software for their businesses.
2. ii) Lack of Implementation of Management Procedures: The various managerial procedures could not be easily and subsequently implemented within this software and thus the users face major issues in the business (Leon, 2014). This is one of the most basic demerits of the cloud based enterprise resource planning software.

iii) Difficulty in Data Migration: The respective users often overcome through major difficulties for their migration of data and services. This is mainly because of the complexity of data migration in cloud based enterprise resource planning software.

1. iv) Difficulty in Taking Decisions: The entire procedure to take relevant decisions within the business is extremely difficult with the presence of the cloud based enterprise resource planning software (Chiu et al., 2014).

These above mentioned disadvantages of the cloud based enterprise resource planning software majorly depict that this software is not always feasible enough for the users.

Cloud based enterprise resource planning software is being utilized by various popular and significant organizations for the growth of their businesses easily and promptly. This particular software comprises of some of the major and noteworthy features and advantages that help the businesses to grow rapidly and obtain competitive advantages. Moreover, they are able to reach to their target customers, without having any complexity. One of such popular case study example of an organization using the cloud based enterprise resource planning software is the organization of Living Proof. This is one of the most famous hair care products organization. This organization had been going through major financial issues within their business. The sales of this company were decreasing drastically and they were not being able to overcome the losses. Hence, they took the decision to implement the cloud based enterprise resource planning software in their business. Since, this software helps to integrate the departments and business processes, the total revenue of this organization was again increased eventually and they were able to increment the portfolio of the products. More than 330% of the total revenue of this Living Proof Company was increased and hence more popularity and success were obtained by them. The brand name of this organization even became famous in comparison to any other organization. The sales related issues were thus resolved by this organization without any type of complexity. 30% of the total sales of this organization were increased only in three months. Hence, it could be said that cloud ERP software is extremely useful and important for any specific organization.

Cloud ERP System and Its Features

Conclusion

Therefore, it could be concluded that cloud ERP system enables its users’ right to use to the software applications, which run on the shared resources through Internet. This cloud ERP helps in reducing the upfront costs for the organizations, since the computing resources could be leased monthly and are maintained by the on premises ERP. This specific software even provides its users the major access to the business related applications irrespective of time and location. There are various features of this software, which help to demonstrate the major characteristics of this specific software, and thus the several advantages or disadvantages could be easily depicted. The first advantage of this cloud ERP system is that it helps to provide utmost flexibility within the organization, and hence the business processes are executed easily and promptly with this particular software. Data security is the next important benefit of this software. There is extremely less chance of data loss with this software and the ability for adjusting the cloud services is also provided here. However, some of the major disadvantages are also present in this software, such as the overall implementation cost of the cloud ERP software is extremely high and hence it is unaffordable to several organizations. The above report has properly outlined the importance of cloud ERP system with its various advantages and disadvantages. The several features of this system are also identified in this research report. Moreover, a real time case study is also taken into consideration for understanding the significance of cloud ERP system.

References

Antero, M. C. (2015). A Multi-case Analysis of the Development of Enterprise Resource Planning Systems (ERP) Business Practices. Morten Friis-Olivarius The Associative Nature of Creativity.

Arora, R., Parashar, A., & Transforming, C. C. I. (2013). Secure user data in cloud computing using encryption algorithms. International journal of engineering research and applications, 3(4), 1922-1926.

Chiu, Y. H., Claybaugh, C. C., Lea, B. R., & Yu, W. B. (2014). Enterprise resource planning.

Chofreh, A. G., Goni, F. A., Shaharoun, A. M., Ismail, S., & Klemeš, J. J. (2014). Sustainable enterprise resource planning: imperatives and research directions. Journal of Cleaner Production, 71, 139-147.

Das, S., & Dayal, M. (2016). Exploring determinants of cloud-based enterprise resource planning (ERP) selection and adoption: A qualitative study in the Indian education sector. Journal of Information Technology Case and Application Research, 18(1), 11-36.

De Toni, A. F., Fornasier, A., & Nonino, F. (2015). The impact of implementation process on the perception of enterprise resource planning success. Business Process Management Journal, 21(2), 332-352.

Advantages of Cloud ERP System

Dinh, H. T., Lee, C., Niyato, D., & Wang, P. (2013). A survey of mobile cloud computing: architecture, applications, and approaches. Wireless communications and mobile computing, 13(18), 1587-1611.

Farzaneh, M., Vanani, I. R., & Sohrabi, B. (2013). A survey study of influential factors in the implementation of enterprise resource planning systems. International Journal of Enterprise Information Systems (IJEIS), 9(1), 76-96.

Fernando, N., Loke, S. W., & Rahayu, W. (2013). Mobile cloud computing: A survey. Future generation computer systems, 29(1), 84-106.

Garg, P., & Garg, A. (2013). An empirical study on critical failure factors for enterprise resource planning implementation in Indian retail sector. Business Process Management Journal, 19(3), 496-514.

Garg, S. K., Versteeg, S., & Buyya, R. (2013). A framework for ranking of cloud computing services. Future Generation Computer Systems, 29(4), 1012-1023.

Ha, Y. M., & Ahn, H. J. (2014). Factors affecting the performance of Enterprise Resource Planning (ERP) systems in the post-implementation stage. Behaviour & Information Technology, 33(10), 1065-1081.

Hashem, I. A. T., Yaqoob, I., Anuar, N. B., Mokhtar, S., Gani, A., & Khan, S. U. (2015). The rise of “big data” on cloud computing: Review and open research issues. Information Systems, 47, 98-115.

Hoch, J. E., & Dulebohn, J. H. (2013). Shared leadership in enterprise resource planning and human resource management system implementation. Human Resource Management Review, 23(1), 114-125.

Jain, R., & Paul, S. (2013). Network virtualization and software defined networking for cloud computing: a survey. IEEE Communications Magazine, 51(11), 24-31.

Kurbel, K. E. (2016). Enterprise resource planning and supply chain management. SPRINGER-VERLAG BERLIN AN.

Leon, A. (2014). Enterprise resource planning. McGraw-Hill Education.

Matende, S., & Ogao, P. (2013). Enterprise resource planning (ERP) system implementation: a case for user participation. Procedia Technology, 9, 518-526.

Rittinghouse, J. W., & Ransome, J. F. (2016). Cloud computing: implementation, management, and security. CRC press.

Sadat Safavi, N., Amini, M., & Javadinia, S. A. (2014). The determinant of adoption of enterprise resource planning for small and medium enterprises in Iran.

Shaul, L., & Tauber, D. (2013). Critical success factors in enterprise resource planning systems: Review of the last decade. ACM Computing Surveys (CSUR), 45(4), 55.

Shen, Y. C., Chen, P. S., & Wang, C. H. (2016). A study of enterprise resource planning (ERP) system performance measurement using the quantitative balanced scorecard approach. Computers in Industry, 75, 127-139.

Yeh, C. H., & Xu, Y. (2013). Managing critical success strategies for an enterprise resource planning project. European Journal of Operational Research, 230(3), 604-614.

Zeng, Y., & Skibniewski, M. J. (2013). Risk assessment for enterprise resource planning (ERP) system implementations: a fault tree analysis approach. Enterprise Information Systems, 7(3), 332-353.

Akça, Y., Esen, ?., & Özer, G. (2013). The effects of education on enterprise resource planning implementation success and perceived organizational performance.

Bansal, V., & Agarwal, A. (2015). Enterprise resource planning: identifying relationships among critical success factors. Business Process Management Journal, 21(6), 1337-1352.

Blount, Y., Abedin, B., Vatanasakdakul, S., & Erfani, S. (2016). Integrating enterprise resource planning (SAP) in the accounting curriculum: a systematic literature review and case study. Accounting Education, 25(2), 185-202.

Botta, A., De Donato, W., Persico, V., & Pescapé, A. (2016). Integration of cloud computing and internet of things: a survey. Future Generation Computer Systems, 56, 684-700.

Ganesh, K., Mohapatra, S., Anbuudayasankar, S. P., & Sivakumar, P. (2014). Enterprise resource planning: fundamentals of design and implementation. Springer.

Hashizume, K., Rosado, D. G., Fernández-Medina, E., & Fernandez, E. B. (2013). An analysis of security issues for cloud computing. Journal of internet services and applications, 4(1), 5.

Xiao, Z., Song, W., & Chen, Q. (2013). Dynamic resource allocation using virtual machines for cloud computing environment. IEEE Trans. Parallel Distrib. Syst., 24(6), 1107-1117.

Yang, K., & Jia, X. (2013). An Efficient and Secure Dynamic Auditing Protocol for Data Storage in Cloud Computing. IEEE Trans. Parallel Distrib. Syst., 24(9), 1717-1726.