ERP Systems In The Cloud: Strengths, Weaknesses, And Real-life Scenarios

Enterprise Resource Planning (ERP)

The business process management software, which eventually enables any particular company for utilizing the systematic approach of various integrated applications and managing the business for automation of various back office functionalities of human resources, technology and services is termed as enterprise resource planning or ERP in short (Peng and Gala 2014). This enterprise resource planning usually integrate each and every facet of a business operation like product planning, marketing, sales, manufacturing and development within one single application, database as well as user interface. This particular software of enterprise resource planning is considered as the kind of an enterprise application, which is completely software designed for being used by the large businesses and often needs dedicated teams for the purpose of customizing and analysing the relevant data and even handling up gradation and implementation (Duan et al. 2013). The smaller business applications of enterprise resource planning are light weight business management system solutions that are being customized for any particular business industry or company.

Cloud computing, on the other hand, is one of the most popular technologies that is being utilized for data transferring. This particular technology provides a subsequent platform for safe and secured data transfer from one location to the other. It uses a network of remote servers that are being hosted over the Internet connection for storing and processing of data. ERP systems in the cloud is the proper combination of cloud computing and ERP technology (Weng and Hung 2014). The following research report provides a detailed description on the technology of ERP systems in the cloud with proper details. Moreover, strengths, weaknesses and real life scenarios of organizations having implemented this software will be provided here.

Following are the few research objectives of this research report:

• To learn about several characteristics, advantages and weaknesses of enterprise resource planning software.
• To understand about several characteristics, strengths and weaknesses of cloud computing technology.
• To know about the significant concept of the enterprise resource planning system in the cloud with strengths and disadvantages.
• To learn about some of the real life case studies of the enterprise resource planning system in the cloud.
• To understand the importance of this particular software after it is being implemented in the organization.

ERP or enterprise resource planning is one of the major and the most significant need in an organization and business that is being utilized for properly integrating several company based processes and operations (Arnesen 2013). This enterprise resource planning is a subsequent systematic and structured approach that is majorly present in the software for helping any specific business to automate and standardize the business related processes and hence increasing the total effectiveness and efficiency of the business operations.

The first and the most advanced or integrated approach, which is extremely helpful to the business management for managing and controlling the specified organizational procedures and even for being sure that the business resources are being saved as much as possible so that the business obtains betterment and competitive advantages (Wang and Xu 2013). The major need of the business is incorporating several business related operations and processes and for that purpose, this is important for making the flow of information extremely smooth in comparison to other technologies. The software of enterprise resource planning eventually makes sure that all the criteria are properly followed within the company effectively and efficiently (Helo et al. 2014). Various examples are present for enterprise resource planning and these are SAP, Microsoft Dynamics, Oracle ERP and Sage X3.

Cloud Computing Technology

1. i) Enhancement of Customer Relationships: The most significant and important characteristic of this ERP system is the proper enhancement of customer relationships (Al-Ghofaili and Al-Mashari 2014). There is a major significance and importance that this software comprises of is that it helps in reducing the overall complexity of customer management and ensures that the customers are satisfied completely with this specific software.
2. ii) Saves Users’ Time: The system of enterprise resource planning even saves the users’ time majorly by proper integration and streamlining of business processes (Al-Johani and Youssef 2013). ERP even is helpful for perfect integration of every business operation into one particular operation and hence it is referred to as the most vital software for an organization.

iii) Capability of Customization: The next subsequent and noteworthy characteristic of the ERP software would be its capability of customization (Seethamraju 2015). The entire process of customization is extremely easier and thus business operations are being customized easily in the business.

1. iv) Incorporation of Business Operations: Business operations could be easily and promptly incorporated and hence it is termed as an important and significant software in the business (Salim 2013). Due to the better integration of business processes, even the smaller organizations and businesses use the software for an effective and efficient execution.

Some of the major and the most significant strengths are also present for this specific software and these strengths are listed below:

1. i) Extremely Effective and Efficient: The first strength of this particular software of ERP is that it is extremely effective and efficient in respect to other technologies (Chen, Liang and Hsu 2015). Due to this specific advantage, ERP is considered as the most effective and efficient of all for business management.
2. ii) High Scalability and Flexibility: The second strengths of ERP software would be that it is extremely scalable and flexible in comparison to the other distinctive technologies. The management of business operation is quite easier with it.

iii) Helps in Providing Competitive Advantages: Enterprise resource planning software is also effective since it provides competitive advantages and features to the business and this is an important advantage of the software (Gangwar, Date and Ramaswamy 2015).

1. iv) Increment of Subsequent Productivity: ERP software is also responsible for increasing the overall productivity of any business efficiently and thus this is an important advantage of the system.

In spite of having these significant and important advantages, few noteworthy weaknesses are being listed below:

1. i) Higher Indirect Cost: The first and the most significant weakness of the ERP software is the higher indirect cost (Dutta, Peng and Choudhary 2013). In spite of the fact that ERP software is majorly responsible to reduce the total business associated cost, hence it is noted that the indirect cost for infrastructure maintenance is being incremented as well as indirect cost management solely becomes a major issue.
2. ii) Lacking Security of Data: The overall data security is often not present here and thus users have the chance of losing their data (Utzig et al. 2013). The reason for this would be that vendors are relied for data extraction.

Cloud computing technology is an important and significant technology, which helps in sharing the resources and data after considering Internet services without major complexities (AlBar and Hoque 2015). Cloud is extremely helpful to each and every user for easy transferring of information and data within a secured environment. The reason for this activity is that cloud computing platform is extremely safe and the features are listed below:

1. i) Service Quality: Cloud computing allows improvement of service quality to a distinctive level.
2. ii) Services as per Demands: Services are provided as per demands of the customers in this technology (Chang, Tsai and Chen 2014). For this reason, it is extremely vital to bring cloud computing technology within the business.

Following are the strengths of cloud computing:

1. i) Easier Implementation: The first and the most important strength of this technology is that it would be easily implemented without excessive resource consumption and incurring of costs.
2. ii) Easy Data Recovery and Data Access: The second important and noteworthy strength of cloud computing is that the lost data could be easily recovered (Johansson et al. 2014). Moreover, a better access of data is also possible with the involvement of this particular technology.

Following are the major weaknesses of cloud computing:

1. i) Issues with Bandwidth: The bandwidth issues are quite common in this technology of cloud computing and thus management is quite difficult here.
2. ii) No Control of Data: Data control is almost absent in cloud computing and hence users face difficulties while management of data in an effective and efficient manner (Brender and Markov 2013).

A cloud based ERP software is considered as one of the most significant and efficient combination of two distinctive technologies of enterprise resource planning and cloud computing. It is majorly used for the core purpose of enabling all the businesses in perfectly accessing the software applications that are subsequently running over the shared computing resources by properly undertaking the core help of Internet connection (Johansson et al. 2015). Each and every above mentioned shared computing resources, shared by these users could be easily and promptly controlled and managed within every data centres, which is even dedicated to host the applications over various cloud based platforms.

The cloud computing based ERP system is hence termed as the major as well as the most significant software, which is being driven by the model of software as a service of the technology of cloud computing (Chofreh et al. 2014). The presence of this particular model of cloud computing architecture is quite helpful and vital for every relevant users for enabling or allowing these users to access the enterprise resource planning or ERP software over Internet services. The total costs of this cloud ERP software is much less as the accurate and important software resources could not be efficiently managed, maintained and controlled over the premises.

ERP Systems in the Cloud Technology

Few of the major and the most important as well as noteworthy characteristics of the software of ERP systems in the cloud are as follows:

1. i) Providing Better Support to Every Customer: The most important and significant characteristic of this ERP system in the cloud software is that this particular software provides better and effective support to several customers or clients (Mija?, Picek and Stapi? 2013). Hence, it is quite vital for the respective betterment of that company and there is an enhancement of customer relationship management or CRM.
2. ii) Easy and Effective Customization: The significant and vital characteristic of this enterprise resource planning system in the cloud computing platform would be its better as well as easier customization without much complexities (Alam, Pandey and Rautaray 2015). These various business operations are thus easily and promptly customized according to the demands of the users.

iii) High Scalability or Flexibility: The next important and significant characteristic of this ERP system in the cloud technology would be its high flexibility and scalability (Carutasu and Carutasu 2016). The specified software is eventually scalable as well as flexible and therefore, it is much easy for the users for the management of the users’ demands by not including every issue or problem. The service providers of cloud computing hence gives various distinct systems that are being utilized to the effective switching as per the respective technology of cloud computing (Grubisic 2014). Furthermore, this particular characteristic is responsible for helping those specific businesses, who do not want to spend extra or additional expenses. Hence, this enterprise resource planning system in the cloud system is referred to as the most cost effective and cheap technology.

iii) Better Uses: The entire usability of this specific software of ERP system in the cloud is much easier in comparison to other technologies and thus due to its lack of implementation complexity, it is quite popular for all types of organizations (Lewandowski, Salako and Garcia-Perez 2013).

The major and the significant advantages of the enterprise resource planning system in the cloud are listed below:

1. i) Easier Access of Data: The first as well as the most important benefit of this particular technology is its easy access of data (Bahssas, AlBar and Hoque 2015). Due to the user friendly data accessibility, cloud ERP is claimed as the most significant software of all.
2. ii) Presence of Disaster Recovery Planning: Cloud ERP software consists of a distinct disaster recovery planning and with this type of planning, it becomes quite easier to retrieve the data that is being lost by the user.

iii) Removal of Extra Expenses: The next significant strength of this type of technology is the proper removal of any type of extra costs or expenses, thus the overall business costs are reduced to a higher level effectively (Mija?, Picek and Stapi? 2013).

1. iv) Avoiding Cyber Attacks: Since, high level of protection is present in the software, it is nearly impossible for the hackers to hack the data and thus cyber attacks are being avoided.
2. v) Avoiding Upfront Costs: Due to the reason of cost effectiveness, the upfront costs are being avoided in this specific software and thus it becomes quite easy to maintain a better efficiency in technology (Chang, Tsai and Chen 2014).
3. vi) No Need of Extra Hardware: There is no requirement of any extra hardware in this particular software and hence it is quite popular in all types of businesses irrespective of the size.

Although, there are some of the major advantages in this specific software of ERP systems in the cloud, few weaknesses are also present that make the entire system extremely vulnerable and problematic for the business that have implemented it (AlBar and Hoque 2015). These significant weaknesses are listed below:

1. i) Issues with Integration: The most significant and vulnerable issue that is required to be eradicated under every circumstances is the issue with integration. In this specific software, integration is extremely difficult and thus several customers eventually try to avoid this particular software.
2. ii) Issues in Migration of Data: The next subsequent issue that is being faced in this specific software of ERP systems in the cloud is the major issue in migration of data (Dutta, Peng and Choudhary 2013). This often becomes a major problem for the business and hence several organizations avoid this software.

iii) Problematic Process of Decision Making: The entire process of decision making in this specific software is quite problematic and hence it is required to eradicate on time. The entire process of decision making becomes much complicated and thus the businesses are unable to take relevant decisions.

1. iv) Issue to Incorporate the Management Processes: The various business related management processes often become an issue to incorporate in the business and thus it is highly important that such issues should be removed and eradicated (Gangwar, Date and Ramaswamy 2015).

The software of ERP systems in the cloud is completed incorporated in various popular and important businesses. This particular system is completely responsible for subsequently enhancing the distinct organizational models and even obtaining some of the most significant and vital competitive advantages in the specified business (Chen, Liang and Hsu 2015). Furthermore, the relevant execution of all the business operations and business processes must be also completed by undertaking some of the real life case studies, few popular organizations have got competitive benefits after a subsequent implementation of the enterprise resource planning system on the cloud platform. Two important and significant examples of real life case scenarios of companies getting advantages from ERP systems in the cloud are given below:

1. i) Nestle: The first and the foremost organization that has got benefits from the implementation of software of ERP systems in the cloud is Nestle. It is an enormous international candy maker and has headquarters in Konicki, Switzerland. They had harboured the objective to integrate enterprise resource planning systems in the cloud across three of their operating organizations of Nestle SA, Nestle USA and Nestle UK (Al-Johani and Youssef 2013). Nestle USA operations had been working towards the entire integration of the collection of solutions of enterprise resource planning in the late 90s, however several policy, organizational problems or requirements were required for complete initiation.

Characteristics of ERP Systems in the Cloud

During the start of 2000, the organizational management eventually decided that holistic approach towards business requirement was in order. This particular effort had paid the dividends, which allowed SAP software to implement and get 200 million dollars job done (Al-Ghofaili and Al-Mashari 2014). The positive business impact have included the respective consolidation of the outdated accounting structure, a confident work forces and more efficient and better communications through the supply chain management. Nestle has integrated across various sites and it needs various up front effort for getting pay in the longer run.

ii) Cadbury: The second relevant example of a popular organization that has got major competitive advantages in the business from a successful implementation of ERP systems in the cloud is Cadbury (Peng and Gala 2014). It is a 123 years old confectioner that is currently owned by the American snacks food conglomerate Modelez International. This particular organization was on its accelerated growth track during facing several issues while meeting the requirements of production as well as distribution. They took the decision of implementing the software of SAP for resolving the concerns of production and distribution. Along with the other subsequent changes that are being triggered by the proper deployment of enterprise resource planning systems in the cloud, the multi node resource management was being extended through out the supply chain with a complete revamping of the existing warehouse as well as distribution of processes (Chen, Liang and Hsu 2015). The respective consequent impacts that have afforded Cadbury the core opportunity for reduction of the overall operating expenses while the newly engaged supply chain that has eventually produced the better and effective production efficiencies in the entire manufacturing chain.

Conclusion

Thus, from this above provided discussion, it could be easily concluded that the software of enterprise resource planning is the most important as well as vital modular system that is being designed for the core purpose of incorporation and integration of few functional areas of the specified business processes in a unified process and system. This ERP software even involves the most significant elements of any system known as the modules, responsible to focus on various relevant organizational areas like materials management, products management, finance as well as accounting, CRM or customer relationship management, SCM or supply chain management and human resources management. Several popular and distinctive organizations have selected these chief modules that could be utilized on the basis of the factor that should be vital and significant for the company. This software of ERP eventually identifies from any standalone targeted system that the vendor can refer to their best data of company related solutions. Thus, it is termed as one of the major and important central database from which the modules of ERP software can access relevant information.

Real-life Scenarios of Organizations with Implemented ERP Systems in the Cloud

The ERP systems in the cloud is referred to as that specific software of enterprise resource planning that is being presented on the specified platforms of the technology of cloud computing, however the respective information is present over the data centres. The ERP software is associated with SaaS model of cloud computing that is responsible for incrementing the accessibility through Internet services and even allowing all the users in sharing as well as transferring the relevant real time data. Since, this is being hosted on cloud, the businesses are notified for any kind of update for this particular software on an immediate basis. This research report has provided a detailed description on the enterprise resource planning systems in the cloud with various details like real life case studies.

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