Cloud based ERP system Development

RUNNING HEAD: CLOUD BASED ERP SYSTEM DEVELOPMENT 1
Cloud based ERP system Development
Charles Sturt University

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Table of Contents
Executive Summary..............................................................................................................................3
Introduction to research domain...........................................................................................................4
Research question.................................................................................................................................4
Literature Review.................................................................................................................................4
Discussion/Analysis.............................................................................................................................8
Findings................................................................................................................................................9
Conclusion..........................................................................................................................................10
References..........................................................................................................................................12
Appendices.........................................................................................................................................13
Appendix I: Gantt Chart............................................................................................................13
Executive Summary
This research paper evaluated literature on the concept of cloud ERP systems, motivated by the
increasing development and adoption of cloud computing and e-commerce, and the need for
organizations, especially SME’s to remain competitive and be ready for fast changes in technology.
The research was based on the question of the benefits of Cloud ERP implementation and its
challenges when being implemented. A detailed literature review reveals several benefits of Cloud
based ERP systems including lower initial and running costs, fast implementation, scalability,
flexibility, and adaptability, as well as greater efficiency and productivity, one major demerit of
cloud based ERP is loss of control over data, which can be overcome through a hybrid cloud
architecture. Poor project management during implementation is a major risk of cloud ERP
implementation and therefore needs effective management. A cloud based ERP is therefore
important for any organization

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Introduction to research domain
As the business environment has become increasingly competitive, businesses, especially
SME’s (small to medium enterprises) need to be more responsive to the environment, with solutions
that enhance their performance, efficiency, and help reduce costs in order to survive and/ or remain
competitive. One way organizations improve performance and enhance customer service is by using
enterprise resource planning (ERP) software applications; An ERP is software for managing
business processes that enables a given organization to employ a system that has integrated
applications for managing business processes and automate several operational functions relating to
human resources, technology, and services. The ERP system integrates various features of
organizations’ business processes; these include product planning, its development, production,
sales, marketing, and customer management in a single database driven user application interface
('Oracle Netsuite', 2018). Yet in deploying an ERP system, an organization must ensure the choices
made are the best to guarantee success: this implies using effective methodologies of project
management to ensure the desired objectives are met. Further, the right ERP architecture must be
chosen so that the organization gains the envisaged benefits of implementing the ERP system,
including appreciable returns on investment. Organizations have the choice of implementing a
traditional ERP ERP system (On-premise ) or an ERP system implemented in the Cloud system.
This paper discusses how an ERP system, specifically , a cloud based ERP system can be
implemented, its implementation procedure, and the benefits an organization stands to gain for
implementing the cloud based ERP solution. After stating the research question, the research paper
will undertake a detailed literature review on the topic and then discuss the findings before drawing
a conclusion
Research question
What benefits accrue in implementing a an ERP system based on the cloud for organizations
and what challenges pertain to its implementation?
Literature Review
The concept of cloud computing has received wide acceptance as a new and influential
method in the information technology arena. It provides flexibility, access, and security, as well as
cost reductions in certain instances, among other benefits. In recent times, suggestions, and indeed
applications have been proposed and developed, including ERP systems; making ERP accessible

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and usable through the cloud provides great benefits regardless of the filed in which they are used
but to attain these benefits, some guidance including the right project management methodologies
and development process is needed. Several organizations attempt to implement cloud based ERP
systems but end up in failure or unable to benefit from the system and this requires the use of
enterprise architecture to validate all company needs and assess them before implementing a cloud
based ERP system (Zhang & Xue, 2012). ERP systems have been used in the past fifteen years
although it did not receive as much attention as it has now done when used in the cloud computing
framework. Cloud computing is a technology system involving connecting various computers to
provide computing services over an internet based communications network. Cloud computing is a
technology as well as an approach that utilizes the power of servers in which single servers are
divided into different virtual machines using various models to execute cloud computing.
Existing ERP programming, especially on-site ERP systems has been associated with
rigidity and cloud computing provides a solution to overcome this (rigidity) challenge. This allows
organizations to select the organizational choice best fitting their specific needs. Cloud ERP systems
are an adaptable and financially beneficial option for SME’s that also provides several options for
extension, development, and scaling. Cloud ERP entails implementing an ERP through a cloud
services provider. A cloud ERP becomes a suitable choice when other factors are considered,
including the need to invest in physical infrastructure, deployment, support and maintenance, the
need to scale the ERP in future, and risks associated with downtimes, according to Singh & Nagpal,
(2014). In selecting ERP systems, among the first things to consider is whether the ERP system
should be hosted on premise or in the cloud; although both have their merits and demerits, it is
important to consider various factors in deciding which type of system to implement. The main
difference between on-premise (traditional ) and ERP systems based on the cloud is that cloud
based ERP systems are hosted on vendors’ servers and then accessed over the web through a web
browser while on-premise ERP is hosted on the organizations’ local severs. With time, however,
both systems have a tendency to converge.
On premise ERP systems are priced under a one-time licensing fee that is essentially
perpetual, while cloud based ERP systems are priced on an annual or monthly subscription basis.
According to Raihana (2012), cloud computing is an innovative form of distributed computing that
enables the dynamic buffering of resources, virtualization, and next generation enterprise data
centers that are highly usable and have high availability. Cloud computing enables the sharing of
resources and therefore, the costs as well: users pay on the go and use only the resources they
require at any particular time and this helps keep costs down. This makes cloud computing