What Is Cloud ERP ?


The term enterprise resource planning (ERP) was introduced in the 1990s to describe software that automates business processes across a company – from financials to distribution and manufacturing. In those early days, ERP systems were typically implemented on the clients’ own servers in their data centers.

A couple of decades later, cloud technology was introduced, making it possible to deliver software  through the Internet. ERP became available not only on premise but as a software-as-a-service (SaaS) application, accessed on a monthly lease basis rather than through outright purchase. However, there’s much more to cloud based ERP than the delivery and pricing model. Its advanced features and flexibility make it an essential ingredient for success in the digital age.


For more than 25 years, ERP systems have delivered value to organizations, helping them boost productivity and gain insights. But now, the entire world (and the competition) has changed.

Today, customers expect faster delivery of products and services, nonstop product and service improvements, greater reliability, and lower costs. Businesses often need look beyond their walls to ensure the best value for customers. They work virtually with a wide array of partners – for production, product distribution, sales management, service, support, and even core business processes. As a result, they need software that not only helps them handle internal processes but also manage business networks all over the world.

Legacy ERP systems can’t keep up with the complex requirements of businesses today. Older systems are difficult to adapt to change, are expensive to maintain, and are unlikely to help companies comply with evolving regulations. Designed for a simpler landscape, most legacy ERP systems fail to deliver the speed, flexibility, and intelligence that companies need to operate in new, more agile ways.



There are three key reasons why cloud ERP is particularly critical for fast-growing, midsize businesses.

1.Improved agility: Agility is particularly important to midsize companies with growth potential. These companies are often specialists in their industries, working in a small, related set of industry verticals such as aerospace job shop metal fabrication or distribution service to restaurants. They have deep customer and vendor relationships. To grow rapidly, they need to seize opportunities – adding new locations, introducing new products and services, making acquisitions, or responding to competitor failures. 

An old system that is not flexible and easily expandable will constrain growth because it can’t provide information needed for decisions quickly enough. If a company relies on independent reporting systems – many of which are based on Excel spreadsheets – it’s difficult for departments to share information and work together to meet common, time-sensitive goals.


2.Visiblity into cash flow: In midsize companies, top management tends to be very cost conscious. Unlike larger companies that manage quarterly budgets, the lifeblood of medium businesses is cash flow – and improving profit margin is often a top priority. Building balance sheet reserves – and fueling growth – requires a careful eye on working capital, operating expenses, and investments.

While all midsize companies have some type of accounting or ERP system, many of these systems fail to deliver immediate cash flow and vital profitability information. They often don’t meet the current needs of the business or integrate with other systems. What’s more, these legacy systems are usually not enhanced with new features – or even maintained and supported – by vendors who have shifted their focus to the cloud.

3.Ease of application integration: Midsize businesses have typically been quick to adopt point solutions for specific operational needs – such as call center software or field service systems – but slow to change their backbone ERP. However, adding these “bolt on” solutions has added great expense and complexity because these tools don’t easily connect to the ERP system. Now, modern cloud ERP is changing all of that – causing more and more growing companies to reevaluate their ERP choice. Increasingly, companies are opting for the easy integration, scalability, and agility that comes with cloud ERP.

What are the top 10 benefits of cloud ERP?

Companies that have made the move to modern cloud ERP do so based on these benefits and capabilities:

The top benefits of a modern cloud ERP system

  • Lower costs
  • Fast, flexible implementation: 
  • Business improvement: 
  • Simplicity and automation: 
  • New functionality: 
  • Better insights: 
  • Support for mobile ERP: 
  • Access to new technologies: 
  • Deeper security: 
  • Scalability:

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Ref :https://insights.sap.com/what-is-cloud-erp/