Study on Cloud Based ERP Services for SMEs: Benefits and Challenges

This report examines cloud-based Enterprise Resource Planning (ERP) services specifically tailored for small and medium enterprises (SMEs). The study delves into the significance of cloud ERP, highlighting its advantages, such as cost-effectiveness and accessibility, compared to traditional ERP systems. It explores the benefits of cloud-based ERP, including enhanced data security, flexibility, and the ability to access information from anywhere with an internet connection. The report also outlines the research methodology, including the research design, sampling techniques, data collection methods, and data analysis procedures employed. Furthermore, it addresses potential problems associated with research designs, providing a comprehensive overview of the topic and its implications for SMEs. The report concludes by emphasizing the advantages of cloud-based ERP for SMEs, reinforcing its importance in modern business operations.

Running head: CLOUD BASED ERP
Topic-Study of cloud based ERP services for small and medium enterprises
Name of the Student
Name of the University
Author’s Note

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Table of Contents
1. Introduction..................................................................................................................................2
1.1. Problem Statement................................................................................................................2
1.2. Purpose of the research and Research question....................................................................3
2. Literature Review........................................................................................................................3
2.1 Importance of Cloud based ERP............................................................................................3
2.2 Advantages of utilizing cloud based ERP in both small as well as medium scale
organization.................................................................................................................................4
2.3 Benefits of using cloud based ERP in comparison to traditional ERP system......................6
3. Clear description of the methodology..........................................................................................6
3.1 Research Design....................................................................................................................7
3.2 Sampling................................................................................................................................7
3.3 Data Collection......................................................................................................................7
3.4 Data Analysis.........................................................................................................................8
4. Potential problems with research designs....................................................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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1. Introduction
The paper reflects on the topic “Study of cloud based ERP services for small and
medium enterprises”. According to Al-Ghofaili and Al-Mashari (2014), the principles of cloud is
mainly originated from the term cloud computing which is mainly considered as one of the
practice of utilizing a remote servers based network on the internet for storing, managing as well
as processing data. It is identified that cloud based computing utilizes internet for providing
shared computing resources such as disk storage, memory as well as power for running a
multitude of different software applications. However, it is stated by Lopez and Ishizaka (2017)
that Cloud ERP is enterprise resource planning that is mainly accessed with the help of cloud by
accessing servers that are generally hosted remotely from the business. It is identified that cloud
based ERP is mainly valuable for small as well as medium size business as it generally provides
access to various full-function application at number of reasonable price without substantial
upfront expenditure for different hardware as well as software.
The paper reviews number of journal articles in order to reflect the significance of cloud
based ERP services for both medium and small business organizations. The paper also elaborates
methodology as well as potential problems that are related with research designs.
1.1. Problem Statement
Enterprise resource planning is one of the procedure with which a company integrates as
well as manages significant parts of business. It is identified that in traditional ERP system,
the organizations requires hardware system as well as huge amount of power so that the
system can operate effectively. In addition to this traditional ERP system cannot be
accessed irrespective of time and place which is also considered as one of the important

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issue. In order to resolve all this problem, cloud based ERP system is introduced which is very
much beneficial as well as useful for business organization. The organizations can access
information from anywhere at any time quite easily.
1.2. Purpose of the research and Research question
The purpose of this research is to reflect the significance of ERP based cloud in small as
well as medium enterprises. The research is also conducted in order to elaborate how cloud ERP
could be helpful in proving its suitability in comparison to traditional ERP systems.
The research questions are provided below:
 What is the importance of cloud based ERP?
 What are the advantages of utilizing cloud based ERP in both small as well as
medium scale organization?
 How could cloud ERP prove to be an appropriate alternative in comparison to
traditional ERP?
The hypotheses are provided below:
H0: Cloud based ERP is important for both small and medium scale organization
H1: Cloud based ERP is not important for both small and medium scale organizations
2. Literature Review
2.1 Importance of Cloud based ERP
According to Saa et al. (2017), enterprise resource planning is one of the management
software that is mainly offered to number of applications that mainly aims to assist business

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organization in automating data collection, management as well as understanding from different
business sources like marketing, service delivery, marketing as well as accounting. It is identified
that organizations that have incorporated cloud based ERP solutions generally experiences many
benefits. It is stated by Ganesh and Mehta (2016) that cloud based ERP software is known as
Software as a service. It is identified that this software systems does not require extra servers,
equipments, space in order to save cost because they can be remotely accessed irrespective of
time and place. On the other hand, it is opined by Duan et al. (2013) that Cloud based ERP
system provides appropriate privacy against different kind of security breaches. Moreover, the
modern ERP software helps in storing important documents in an encrypted form at different
places. They are also capable of assisting their user for scheduling as well as strategizing various
processes in a timely manner. It is identified that cloud servers are generally accessed from
anywhere and this feature of cloud ERP helps in freeing the user from single workstation.
2.2 Advantages of utilizing cloud based ERP in both small as well as medium scale
organization
Enterprise resource planning has gained popularity, as it is capable of managing business
solutions very much easily. The ERP software helps in allowing organizations to access systems
that are of highly integrated applications. It is identified that Cloud based ERP is very much
beneficial for both small and medium scale organizations. According to Fruth and Neacsu
(2014), in-house ERP software generally needs hardware for support including the
knowledgeable staffs for installing as well as maintaining it. This helps in entailing new hires,
which will come at a very low cost for both medium and small businesses organizations.
Combining the fact that the organizations have to purchase the software as well as the associated
licenses and thus it adds up to large percentage for enhancing the overall IT budget of the

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organizations. On the other hand, it is argued by Helo et al. (2014) that if organizations will
select the option of cloud based ERP then normally they need to pay monthly fee which means
the amount of money that is required for implementing the ERP system will be minimized.
It is opined by Mital et al. (2014) that many business organizations came across one
issue during the implementation of ERP system is that is generally requires huge amount of
power for functioning with highest efficiency. For this, both the medium and small business
organization have to invest in different servers that are required to be maintained as well as set
up. If they are not properly implemented then it will create performance drop. On the other hand,
it is argued by Weng and Hung (2014) that cloud based ERP mainly needs steady connection of
internet, which is present in all the small and medium business organization. The resources for
hosting various solutions must be take care by different providers, which mean that systems must
perform well.
According to Nowak and Kurbel (2016), the organization that does not have ERP will
face difficulty in finding the required information. ERP helps in bringing proper as well as
relevant information in a quite effective manner as compared to spreadsheets. Additionally, as
the cloud, based ERP solutions are generally accessible with the help of internet then it means
that information can be accessed from anywhere when internet connection is available. On the
other hand, it is stated by Ganesh and Mehta (2016) that cloud based ERP solutions helps in
offering enhanced security measures, which are quite helpful in keeping the data secure. For
various internal matters, it is identified that data security is mainly ensured, as the system is
accessible.

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2.3 Benefits of using cloud based ERP in comparison to traditional ERP system
According to Fruth and Neacsu (2014), a cloud based ERP is quite different from
traditional ERP system because it is mainly designed with the help of scratch in order to provide
appropriate web based services to the customer. It mainly assists in shifting the main
responsibility of the infrastructure that is needed by the organization for providing an external
service that mainly specializes in giving appropriate web based services (Saa et al., 2017). It is
identified that the cyber infrastructure mainly helps in making the deployment of the business
system much easier and also assists in enhancing the entire scope of applications and that could
be only realized within the various organizational constraints that is budget as well as time. One
of the most important advantage that can be achieved is that user is generally abstracted from
providing appropriate maintenance to the software. It is stated by Lopez and Ishizaka (2017) that
cloud based ERP helps in providing effective flexibility in context to access to the business
organizations. It is also helpful in diverting the attention of the workers away from both
developments as well as mountainous and assists in directing the core procedure that is quite
beneficial for benefitting the organization in an effective way.
3. Clear description of the methodology
The procedure that is utilized for collecting both information as well as data for making
business related decisions are known as research methodology. According to (), research
methodology is necessary for including number of theories as well as concepts that helps in
underling different methodologies. The research methodology mainly illustrates research design,
data collection, sampling method and data analysis procedure.

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3.1 Research Design
Research design generally assists in elaborating the framework of the topic that is related
with the research in order to select appropriate pattern of collection as well as selection. It is
identified that there are mainly three types of research design, which are exploratory, explanatory
and descriptive (Taylor et al., 2015). In this paper, the researcher have generally selected
descriptive design because it will be helpful in elaborating the importance of cloud based ERP
in small and medium business.
3.2 Sampling
Sampling is defined as a procedure that is mainly utilized in statistical analysis for
predetermine number of observations. It is identified that larger population mainly depends on
the types of analysis that is performed (Wickham, 2016). The technique that is selected in this
research is random sampling method. This method is mainly selected for biasing as well as
simplifying results
3.3 Data Collection
Data collection is defined as one of the method that helps in collecting and measuring
information on various targeted variables in an established systematic way (Creswell & Poth,
2017). It is identified that data collection methods are generally categorized into two types,
which are secondary data collection method as primary data collection method. In this research,
secondary collection of data is utilized in this paper for collecting information after reviewing
several articles as well journals.

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3.4 Data Analysis
It is the procedure of evaluating data by utilizing analytical as well as logical reasoning
for examining each component of the data. Data analysis is mainly divided into two types that
are qualitative as well as quantitative analysis (Palinkas et al., 2015). It is identified that in this
research qualitative data analysis method is mainly utilized as the information about the research
is mainly collected into some form of understanding, explanation as well as interpretation of
people as well as situations that is investigated.
4. Potential problems with research designs
The potential problems in research design are as follows:
 Issues associated with the decision about the purpose of the study:
 Issues with type of research that needs to be conducted
 Rat at which the data will be analyzed and
 Temporal aspects of research
Conclusion
It can be concluded that Cloud based ERP is quite advantageous for small and medium
business organizations as it helps in providing number of benefits to the business organizations.
It is identified that Cloud based ERP system provides appropriate privacy against different kind
of security breaches and it also help in storing important documents in an encrypted form at
different places. They are also capable of assisting their user for scheduling as well as
strategizing various processes in a timely manner.

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References
Al-Ghofaili, A. A., & Al-Mashari, M. A. (2014, August). ERP system adoption traditional ERP
systems vs. cloud-based ERP systems. In Innovative Computing Technology (INTECH),
2014 Fourth International Conference on(pp. 135-139). IEEE.
Creswell, J. W., & Poth, C. N. (2017). Qualitative inquiry and research design: Choosing among
five approaches. Sage publications.
Duan, J., Faker, P., Fesak, A., & Stuart, T. (2013). Benefits and drawbacks of cloud-based versus
traditional ERP systems. Proceedings of the 2012-13 course on Advanced Resource
Planning.
Fruth, A., & Neacsu, M. N. (2014). Aspects Regarding ERP Information Systems, Cloud Based
or on Premise, with Influence upon Elaboration of Appropriate Marketing
Strategies. Calitatea, 15(S2), 186.
Ganesh, L., & Mehta, A. (2016). Understanding Cloud Based ERP Implementation in Light of
Conventional ERP Implementation at Indian SMEs: A Case Study.
Helo, P., Suorsa, M., Hao, Y., & Anussornnitisarn, P. (2014). Toward a cloud-based
manufacturing execution system for distributed manufacturing. Computers in
Industry, 65(4), 646-656.
López, C., & Ishizaka, A. (2017). GAHPSort: A new group multi-criteria decision method for
sorting a large number of the cloud-based ERP solutions. Computers in Industry, 92, 12-
24.

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Mital, M., Pani, A. K., Damodaran, S., & Ramesh, R. (2015). Cloud based management and
control system for smart communities: A practical case study. Computers in Industry, 74,
162-172.
Nowak, D., & Kurbel, K. (2016, November). Understanding the Flexibility of Cloud ERP
Software. In International Conference on Enterprise Resource Planning Systems (pp.
135-146). Springer, Cham..
Palinkas, L. A., Horwitz, S. M., Green, C. A., Wisdom, J. P., Duan, N., & Hoagwood, K. (2015).
Purposeful sampling for qualitative data collection and analysis in mixed method
implementation research. Administration and Policy in Mental Health and Mental Health
Services Research, 42(5), 533-544.
Saa, P., Moscoso-Zea, O., Costales, A. C., & Luján-Mora, S. (2017, June). Data security issues
in cloud-based Software-as-a-Service ERP. In Information Systems and Technologies
(CISTI), 2017 12th Iberian Conference on (pp. 1-7). IEEE.
Taylor, S. J., Bogdan, R., & DeVault, M. (2015). Introduction to qualitative research methods: A
guidebook and resource. John Wiley & Sons.
Weng, F., & Hung, M. C. (2014). Competition and challenge on adopting cloud
ERP. International Journal of Innovation, Management and Technology, 5(4), 309.
Wickham, H. (2016). ggplot2: elegant graphics for data analysis. Springer

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Appendices
Appendix 1: SMEs in Cloud ERP ecosystem
Appendix: 2 Cloud ERP benefits in business