Cloud technologies also termed as cloud computing has gained popularity over the past few years. Cloud computing refers to offering computing services such as data storage, analysis, provision of databases and software among other services over the internet. It is a powerful technology to perform massive-scale and computing facilities (Hashem et al. 2015, p. 99). The technology allows execution of the computing services and use of the application that has been hosted in the cloud by the cloud computing providers. It has provided the users with means of accessing services without worries for storage of their data. Cloud computing has facilitated the secure storage and back up of data over the internet, this has provided security to sensitive personal data and enhances easy recovery of the information whenever needed. It enables the creation of applications and delivery of software within a short time. It has been attractive to businesses since it allows them to analyze data and make predictions which enable them to make decisions related to their activities (Fox et al. 2009, p. 2009). In businesses, this technology has many advantages over the traditional business application.
The conventional business application is expensive since it is costly to purchase the wide variety of hardware and software required for efficiency and effectiveness, a big team of experts is neededto install the hardware and software, configure, run applications, update and secure the systems lead to huge investments that act as liabilities to organizations. However, the cloud computing eliminates the considerablecost of purchasing the hardware, recruiting the experts, and the cost of purchasing applications and their maintenances frequently incurred in the traditional business application. Apart from the cost reduction advantage, data accessibility from the cloud is fast which is by just a click of a mouse. It has reduced the time spent by businesses in retrieving information from files or other external storage devices. Organization information isaccessible from any geographical position, and this provides theability to expand activities to other locations hence creating a significant market coverage which is a substantial aspect to businesses (Truong 2010, p.64). It has reduced IT chores like software updating, security maintenance measuresdevelopment to protect the software and organization information and hence the team of experts can, therefore, focus on factors that promote productivity which reflects high returns.
The cloud computing providers take the initiative of developing security measures for their network and always ensure their applications are updated, and thus provide high performance and hence an advantage to organizations which deals with extensive data that are prone to hacking which compromises the existence of a business. The high security provided in cloud computing makes it reliable for both large-scale and small-scale enterprises (Krutz and Vines 2010). The purpose of this research report is to investigate the different types of cloud computing to identify their benefits, strength, weaknesses, and risks associated with adoption in businesses. The paper will cover the three types of cloud computing, recommendations and provide a recap of the report.
Organizations have adopted the ERP system to promote decision making and planning processes to facilitate success. ERP systemis an integrated business information system to manage different business functions (Singh and Wesson 2009, p.89). The system combines business operations such as product planning, development, manufacturing, sales, procurement, and marketing for easy management. It promotes the efficient use of a company existing resources and smoothens the audit process (Nettstrater, Geiben, Witthaut, Ebel, and Schoneboom 2015, p.10). The adoption of this traditional business application has contributed to the success of the businesses. However, the tremendous development in technology has led to the invention of the cloud computing that has brought progress in the business world. As Al-Ghofaaili and Al-Mashari (2014), found that many small and medium enterprise is faced with the problem of implementing ERP systems in their organization to the fact that traditional ERP system could be unsuitable (p. 138). The fact that the ERP system is costly need a massive team of experts and require a good storage space this has proven to be uneconomical to small businesses and a significant liability to the large organization. Therefore, there is a necessity for shifting to the cloud computing technology in the ERP system for maximum business profits and improve efficiency in operations. Gangwar, Date, and Ramaswamy (2015), found in their study that determinants such as compatibility, complexity, organizational readiness, advantages, top management commitment, training, and education are important variables that determine cloud computing adoption in organizations (p. 129). However, many organizations are reluctant to adopt the cloud computing in their ERP systems (Oliveira, Thomas and Espadanal 2014, p. 509).
Cloud computing with ERP push businesses towards higher efficiency (Jain and Sharma 2016). The cloud computing providers deploy the cloud computing resources in three ways. That is a public cloud, private cloud, and hybrid cloud. It implies that the clouds differ and therefore this should be a crucial consideration when adopting this technology. In the public cloud, they are operated and managed by the cloud service providers, and through web browsers, the users can access the services and control their accounts. For example, the email services. In the private cloud, an organization exclusively utilizes a cloud computing resource. That is the infrastructure and services are controlled and managed in a private network. In some cases, a company may opt to pay the cloud service providers to manage their private cloud. In the hybrid cloud, both the public and private clouds combine. It allows sharing of data between the clouds. Hence, well appreciated by businesses.
In cloud computing, there are three types of ERP implementations. That is, the on-premise, hosted ERP system and cloud ERP system.
The on-premise ERP involves the installation of the ERP software in a company’s hardware, and the IT staff can maintain it within the company premises. The on-premise ERP solutions are deployed within the company’s device and servers and then controlled by the IT staffs (Ramasamy and Periasamy 2017). Therefore, it is not possible to access the on-premise enterprise resource planning via the internet but instead within the institution. Once its implementation occurs, the company has total ownership of the resource. The IT staff can customize the system to fit the business needs. Manufacturing industries highly utilize the on-premise ERP systems (Peng and Gala 2014, p.29).
The on-premise ERP solutions allow a company to have more control over their data. A company can, therefore, determine the data to go in and out of the system and those to access the information. The company, thus, takes the responsibility of maintaining and updating the user’s data and hence reduces the risk of information loss. The closeness of the software to the company premises creates a sense of security since the company develops its security measures to protect their data from internal and external attack. The system offers natural customization advantages. The company’s IT staff can modify the system to fit the purposes of the company. The on-premise ERP viewed as a cheap investment. Hence, once there is the installation of the system, no further payments required for the service vendor as compared to the other ERP types. The only factor that may cost the company is only the training of the staffs and the software updates. Thus, makes this solution economical especially for small enterprises. The software also does not need the continuous assessment by the service vendor. It also reduces the cost which the company incurs in the maintenance.
The on-premise ERP solution lack flexibilities. That is, it is difficult to access information or use data when out of the company premises. It limits the staffs from operating from out of the premises even when it is urgent. The installation process is long and costly. The process involves identifying the service provider, purchasing the necessary hardware and training the relevant staffs that will operate the system. Therefore, might be expensive for the company and at the same time, it is time-consuming. Since full control of the system is in the company, the company may fail to update their software hence posing a risk to operating on outdated software and thus reducing the efficiency of the system.
Though the solution is cheap and allows the company to customize it to its particular issue, the software may lead to loss of data or information if not updated to the latest software. The company data is prone to manipulation by the IT staffs, and this may have a significant effect on the company.
The user owns the hosted ERP systems, and installation is on a remote server. However, the one accesses the services through a virtual private network (VPN). For one to use this software the userinstallsa link in a workstation. The facilitiesdo not connect to the internet.
Shifting from a hosted ERP to on-premise ERP is relatively easy since in both software the company owns the system, and the infrastructure is similar. In case the company does not choose to be advanced to cloud ERP, the company can have a server that provides support whenever necessary.
It is expensive to install and maintain. In case the workstation link is hacked, the use of VPN poses a security risk to a company’s information.
Cloud ERP system allows a company or users to obtain the enterprise resource planning services over the internet. A company does not maintain or manage the software from its premise but rather the service providers do the system upgrading and maintaining. However, the user has to pay for the services.The cloud ERP solutions are multiplying in use due to its flexibility and efficiency (Raihana 2012, p. 77). For instance, there is a high increase in the use of this technology in higher education institutions (Tashkandi and Al-Jabri 2015, p. 1530). The cloud computing providers offer the storage, data back-up, security and updating services, and hence companies release the burden of worrying about these factors (Kiadehi and Mohammadi). The vendors have ownership of the system.
Using the cloud ERP software is economical since there is no purchasing of hardware and need for experts to install and run the software. The data stored in the cloud is secure since the service providers always work to ensure high-security measures implementation. Using this solution guarantees high performance and therefore helps to save time for the company. Data retrieval is fast and accurate. Users have access to support from the vendors on planning the packages that fit them well.
The user or the company has fewer management abilities when using this solution. As the company develops, it may have new demands and need improvement on the Cloud ERP. However, the company may be forced to purchase other modules from other vendors who could eventually be compatible with the current one. The security assurance is the priority. However, sometimes the security is compromised which may lead to the loss of a company’s information (Lenart 2011, p. 48).
The cloud ERP puts companies and personal information at risk of cyber-attack. Accessibility of this information by criminals who may use the data for illegal actions may lead to jail-term or massive loss to companies (Hausken 2017, p.23).
Conclusion
Summarily, the cloud computing is a technology that ought to be adopted by businesses for the maximum and efficient provision of service and secure management of the operations. However, it is essential to consider factors such as deployment method that is either by public cloud, private cloud or hybrid cloud. The compatibility of the chosen type of software with the company’s requirement is essential in realizing benefits from the technology. However, every kind of software has a risk attached to it. Risk determination is vital before one installs an ERP system clouding software.
References
Al-Ghofaili, A.A. and 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.
Fox, A., Griffith, R., Joseph, A., Katz, R., Konwinski, A., Lee, G., Patterson, D., Rabkin, A. and Stoica, I., 2009. Above the clouds: A berkeley view of cloud computing. Dept. Electrical Eng. and Comput. Sciences, University of California, Berkeley, Rep. UCB/EECS, 28(13), p.2009.
Gangwar, H., Date, H. and Ramaswamy, R., 2015. Understanding determinants of cloud computing adoption using an integrated TAM-TOE model. Journal of Enterprise Information Management, 28(1), pp.107-130.
Hashem, I.A.T., Yaqoob, I., Anuar, N.B., Mokhtar, S., Gani, A. and Khan, S.U., 2015. The rise of “big data” on cloud computing: Review and open research issues. Information Systems, 47, pp.98-115.
Hausken, K., 2017. Security investment, hacking, and information sharing between firms and between hackers. Games, 8(2), p.23.
Jain, D. and Sharma, Y., 2016. Cloud computing with ERP-A push business towards higher efficiency.
Kiadehi, E.F. and Mohammadi, S., 2012. Cloud ERP: Implementation of enterprise resource planning using cloud computing technology. Journal of Basic and Applied Scientific Research, 2(11), pp.11422-11427.
Krutz, R.L. and Vines, R.D., 2010. Cloud security: A comprehensive guide to secure cloud computing. Wiley Publishing.
Lenart, A., 2011, September. ERP in the Cloud–Benefits and Challenges. In EuroSymposium on Systems Analysis and Design (pp. 39-50). Springer, Berlin, Heidelberg.
Nettsträter, A., Geißen, T., Witthaut, M., Ebel, D. and Schoneboom, J., 2015. Logistics software systems and functions: an overview of ERP, WMS, TMS and SCM systems. In Cloud Computing for Logistics (pp. 1-11). Springer, Cham.
Oliveira, T., Thomas, M. and Espadanal, M., 2014. Assessing the determinants of cloud computing adoption: An analysis of the manufacturing and services sectors. Information &Management, 51(5), pp.497-510.
Peng, G.C.A. and Gala, C., 2014. Cloud ERP: a new dilemma to modern organisations?. Journal of Computer Information Systems, 54(4), pp.22-30.
Raihana, G.F.H., 2012. Cloud ERP–a solution model. International Journal of Computer Science and Information Technology & Security, 2(1), pp.76-79.
Ramasamy, M. and Periasamy, J., 2017. Explore the impact of cloud computing on ERP systems used in small and medium enterprises. Int J, 5.
Singh, A. and Wesson, J., 2009, October. Evaluation criteria for assessing the usability of ERP systems. In Proceedings of the 2009 annual research conference of the South African Institute of Computer Scientists and Information Technologists(pp. 87-95). ACM.
Tashkandi, A.N. and Al-Jabri, I.M., 2015. Cloud computing adoption by higher education institutions in Saudi Arabia: an exploratory study. Cluster Computing, 18(4), pp.1527- 1537.
Truong, D., 2010. How cloud computing enhances competitive advantages: A research model for small businesses. The Business Review, Cambridge, 15(1), pp.59-65.
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