Benefits of Cloud Based ERP Systems for SMEs - A Comparative Study

This research paper investigates the benefits of cloud-based ERP systems for SMEs and compares them with on-site ERP systems. The study finds that cloud ERP systems offer advantages such as reduced costs, scalability, flexibility, and adaptability, as well as greater efficiency and productivity. The paper also discusses the limitations of cloud ERP systems, including loss of control over data and security risks, and suggests ways to mitigate them. The study concludes that cloud-based ERP systems are better suited for SMEs and recommends their adoption for future growth.

Development of Cloud
based ERP system
Charles Sturt University

Executive Summary
The need for SME’s to adopt cloud approaches in
implementing ERP solutions was investigated
Cloud computing is rapidly being adopted
Research looked at benefits of Cloud ERP
systems
Benefits include lower initial and running costs,
fast implementation, scalability, flexibility, and
adaptability, as well as greater efficiency and
productivity
While it has a limitation of loss of control over
data, a hybrid cloud can overcome this
Cloud ERP systems are thus much better for
SME’

Introduction to research
domain
Business environment has become more
competitive, so SME’s need to adapt
Improvements should enhance efficiency,
lower costs, increase productivity and
improve customer service
Adopting an ERP system can help
organizations achieve these
ERP is a software for managing business
processes and automate back-office tasks
The ERP software relates to technology,
HR, and services

Introduction to research
domain
ERP integrates product planning,
production, sales, marketing, and
customer service into a single database
driven user interface
When deploying ERP systems, the best
must be chosen to enjoy its benefits
Firms can implement On-site ERP
systems or Cloud ERP systems
This paper compares the two and
advises on the best to be adopted by
firms

Research question
What are the benefits of
implementing a Cloud based ERP
System for organizations and
what challenges pertain to its
implementation?

Literature Review
Cloud computing has received wide
adoption and acceptance as a concept
It offers flexibility, access, and security,
and cost reductions
Applications that use the cloud have
been developed, including ERP systems
Many firms attempt to implement cloud
ERP systems but end up in failure due
to poor planning and execution

Literature Review
Past 15 years has seen ERP systems
being used, but received little attention
Attention has however shifted to ERP
systems with the advent of the cloud
The cloud is both a technology and
approach where various computer
resources are connected over the
internet
On site ERP systems have been
associated with rigidity and the solution
is cloud computing

Literature Review
Cloud ERP entails implementing an ERP
over the cloud using load balancing and
virtualized technologies
Benefits of cloud ERP include scalability,
flexibility, low initial costs, availability,
and BPC
Its limitations include loss of control over
data and different jurisdictions as regards
data security and protection
Another risk is the threat of data breaches
as resources are shared with others

Discussions
Merits of using cloud based ERP
solutions cannot be ignored
The advent of e-commerce and
globalization makes using cloud ERP
more compelling
cloud based ERP systems will firms to
scale their operations, run their business
more efficiently, reduce costs, and
enhance decision making
Cloud ERP systems enhance and
improve decision making

Discussions and nalysis
Cloud ERP benefits include on demand
resource allocation, high availability, low
initial investment, reduced operation costs,
and high efficiency and productivity
Staff can access resources from any location
Demerits of cloud ERP include loss of control
over data, security breaches risks, and high
failure rates
Using a hybrid cloud and effective project
management and transparent SLA’s
mitigates its demerits

Findings
Cloud based ERP systems provide numerous
advantages
Advantages include reduced initial and
running costs, high scalability, flexibility, and
adaptability, fast implementation, easy
upgrades, high availability, efficiency, and
increased productivity
Benefits must be looked at against demerits
However, adopting cloud ERP has benefits
that override its demerits and its important
for firms to adopt it (Cloud based ERP
systems)

Findings
Firms ought to adopt cloud based ERP
systems to prepare for the future
Cloud based ERP systems will help firms
better harness benefits of E-Commerce
The problem of loss of control over data can
be mitigated by adopting a hybrid cloud
Basic security measures such as encryption
will offset fears of data breaches
Cloud ERP systems have a better licensing
and pricing model based on usage

Conclusion
 Background to this research is the increased
use of cloud computing in the age of e-
commerce, globalization, and increasing
competition
 ERP systems provide integration of
applications through the cloud
 Both On-site and cloud ERP systems can be
used
 Cloud ERP has benefits include easy and fast
implementation, reduced upfront and
operation costs, on demand resource
allocation, all that lead to high efficiency and
enable flexibility, scaling, and upgrading both
presently and in the future, given expected