ERP CLOUD COMPUTING

ERP CLOUD COMPUTING

Enterprise resource planning is a broad set of business activities that manage purchasing and inventory management activities as well as finance and human capital. ERP Cloud Computing can be defined as “an approach to enterprise resource planning that make use of cloud computing platforms and services to provide a business with more flexible business process transformation” (Rouse, 2015). In simplistic terms, “Cloud ERP is Enterprise Resource Planning software that is hosted in a platform over the internet”

For many business entities, the biggest investment costs are in inventory, fixed assets and human resources. ERP systems manage those resources. Cloud ERP

The hope for cloud computing is that it will provide businesses with a way to transform how they use and pay for information technology. It might also eliminate the need for expensive servers and storage hardware. These attributes of the system can also lead to the reduction of operational costs. At the moment, cloud computing is seen as being beneficial for startup companies or new business organizations (Rouse, 2015).

Recent research has indicated that cloud ERP has the potential to outperform the traditional IT capabilities and reshape how IT services are used and consumed (Chen, 2015).

Industry experts have their doubts however, with the system. Integration of existing systems with the cloud.  Due to the immateriality of the service, it is harder to distribute than a product.

 

BENEFITS OF CLOUD COMPUTING

 

When an operational difficulty arises, an IT investment may be necessary, and considering the multitude of benefits post-implementation, the ERP cloud computing solution is incomparable. ERP cloud computing does far more than just allow a single tenant cloud to utilize a tiny portion of the endless virtual world, it streamlines business operations, increases worker productivity, and creates a stronger business model to expand from. Smaller sompanies are takign advantage of this technology option in order to level the playign field and  To portray the benefits of ERP cloud computing, this section will describe the greater efficiency of a firm’s value chain and cost savings that consolidation of technology   (Tian).

ERP cloud computing solutions allow a firm to better utilize their technology by supporting the functional and operational structure of a its value chain (Tain). Each section in a value chain has the opportunity to utilize an ERP cloud-computing technology option, and by streamlining each of the value chain modules information processing becomes more efficient and organized. Furthermore, each part of the chain (finance, human resources, supply chain, etc.) becomes more advanced and enhances an already valuable process. Essentially, employing an ERP cloud computing solution results in more control over uncertainties in the environment and marketplace, meaning better decision making and more efficiently resolving conflicts. “TOIP (theory of organizational information processing) suggests that […] ERP systems can help a firm better handle uncertainty, thus reducing performance volatility” (Tian). Performance within the value chain becomes more stable in an unpredictable environment.

Effective value chain processes results in increased productivity and cost savings in the costly operations of maintaining quality technology.  More specifically, greater opportunity to save on software costs and reduced financing for IT assistance and troubleshooting (“Costs of Cloud Computing”). That being said, as most companies satisfy their corporate social responsibilities by moving towards “greener” operations, utilizing ERP cloud computing supports lean management methods and helps remove unnecessary waste throughout a company’s life cycle. Less waste means greater productivity and greater productivity means more efficiency. So, through consolidating and streamlining technology platforms companies are able to invest in other areas, such as R&D and expansion (Columbus). Expanding on the advantage of consolidation, ERP clouds allow the option of virtually unlimited storage and less investment in backup and recovery due to hardware and software difficulties.

 

Automatic Software Integration

Easy Access to Information – Anywhere, Any Time Collaboration

Quick Deployment

 

DEMERITS OF CLOUD COMPUTING

 

Many problems may occur over the lifetime of any computerized implementation. There are three very important factors to why ERP Cloud Computing can be ineffective and they are  security, cost, and service. When looking at these factors one begins to notice the potential disadvantages and wonder if cloud computing should be considered as a viable option for a business with data/information of value. One must also consider what you are getting from your provider and weather they will protect your data and offer you continued service or go out of business in a short time and stop providing you with the needed help you need to keep operations running smooth. When considering the demerits I will be talking about the downsides a company might face and the probable risks of entering into a cloud computing agreement.

When referring to “The Cloud,” a more simplistic way to describe it is the extent of security for personal and corporate data in a virtual locker. With that being said, data breaches are a possible risk to be taken seriously. With all of the recent data breaches in major corporations, such as Target in 2013, many consumers are rightfully debating the security of all data storage systems. Furthermore, security transcends past virtual breaches, by looking at those who have access to store and manage it. People who have direct access to the servers could easily take advantage of their position and steal crucial company information. As a company looking to invest time and money into a remote system you want to know if your files will be safe and in the technologically savvy world we are in, “Can you be sure of that?” By having your data stored on a local drive you are ensuring that it will only be accessed from that machine and not have the chance of the data being in an accessible location. So, by considering using the cloud you are opening yourself up to the opportunity of a breach into your personal data.

The second factor can actually be looked at as a positive and a negative. The negative side to the costs of implementing cloud services is the implementation and training of how to use the new technology. In regards to the implementation, downtime can be a key factor in this process as you will need to move all current data to the new servers which can strain the network and can be a slow and daunting task. Not only by moving all of this data you need to know how you want it organized and how and who can access what by authorizing permission to all your staff. This rolls me into my second point on cost is the training side of the new technology. Many companies still have an older generation of workers who may not have grown up with today’s advanced technology and although the learning curve may be great, even for younger staff must be trained on the extensive new system protocols. The training may consist of making a new account, showing how it works, explaining the new categorizing method and how to access the data from home. All of this I have listed sounds like hours of training needed for each employee. There may be cost reductions but when you look at the negative side of cost do the savings beat the additional costs incurred with the implementation of the cloud.

When selecting a provider, one must consider the company’s reliability, customer support post-implementation, and market stability. When you run into a problem when it comes to important data that may only have one location you do not want it getting deleted by accident. You are looking for the highest quality service and implementation of your new purchased service. Why not stick to what already works and has worked for a long time? When you introduce a new outside company to come in and take over you need to deal with the way they take care of your data. The new company needs to have adequate storage devices, networks and staff to run it all that is knowledgeable of the whole process. Another service that could cause you problem is your internet provider. When you are on the cloud this is all done over wireless internet and if you don’t have consistent, efficient and safe internet for your data to flow you will be moving slow and even stalled in doing work. When one of your staff members is on a deadline or on a call with a client and needs to access a certain file and can’t because the internet is down you are going to lose business and profits. This reverts back to the cost point made earlier. You need reliability and a third-party company coming in and implementing their processes can cause more than they fix.

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