Cloud ERP Software: Concepts, Benefits, and Types

As the use of ERP systems becomes critical across enterprises, connected technology, such as cloud computing, continues to evolve. As a result, businesses are increasingly adopting cloud software to stay on the edge of technology and increase business profitability.

Cloud ERP solutions optimize the internal company’s processes and boost operational efficiency. They’re not only budget-friendly and safe, but they’re also quicker, easier to initiate, and support. It gradually takes over outdated systems and is being favored by most enterprises. In fact, the global cloud ERP market value prediction is projected to reach $101.1 billion by 2025. Isn’t that a significant reason to shift towards cloud ERP software development?

This post will guide you through the peculiarities of cloud-powered ERP systems, including their key benefits.

Cloud ERP System: Product Base

Cloud ERP has become a great alternative to on-premise solutions. It offers significant-tech capabilities that are provided as “software as a service” over the web to different clients. It aims to assist organizations in handling and automating end-to-end business processes.

This type of software unites critical corporate functions (e.g., accounting and inventory administration) into one interconnected environment. Enterprises don’t possess the software; instead, they lease resources for some time. There is no initial cost estimate for hardware since the performer takes all the hassle of ERP deployment, such as app maintenance, modernization, data storage, security, etc.

The point of cloud ERP software is a joint data warehouse that allows different business units across the enterprise to access the same records to satisfy their department-oriented needs. This integrates business activities and data to contribute to improved efficiency and collaboration over the entire organization.

Using such solutions, enterprises can prevent upfront costs for all computing infrastructure and software licenses, reduce the cost of maintaining and supporting an ERP app, implement cloud ERP faster and access the system and data from everywhere. 

It uses computing power to provide companies with more flexible process transformation. This development approach can be the proper suit to specific industry budgets and goals for the long-term success of your business.

Cloud ERP is also highly adjustable to the internal processes and can upload and enter real-time details from any device with broadband connectivity.

Cloud ERP
Cloud ERP

Cloud ERP System Principles

To gain deeper insights, let’s look at the main ideas related to cloud ERP.

  • Deployment model:- ERP systems can be deployed on a company’s private data center or managed by providers as a service delivery model. Cloud access to ERP functionality allows for faster functions delivery. However, in both cases, it requires some time to migrate, customize, and configure the data, as well as personnel training.
  • On-premises soft architecture:- ERP software run in the on-premise environment implies that all the resources are stored locally and utterly supervised by an internal focus group of team experts.
  • Cloud-powered ERP:- The system is located on a third-party server (e.g., Oracle,  Microsoft) and can be entered remotely. All the computing resources are accessed based on the pay-as-you-go model.
  • Self-Hosted ERP:- A hosting partner is responsible for ERP app deployment, including its backend infrastructure. The hosted software model is commonly applied when organizations want to outsource the IT processes to 3rd parties.
  • End-to-end security:- Point-to-point encryption enables secure data transfer between the server and its customers. Even though safety and privacy are considered the most common cloud computing concerns, enhanced security propelling investment in cloud computing.
  • Subscription-based licensing:- The enterprise purchases its license per set period (monthly or annual) and pays as per user fees. Such a model provides access to support and maintenance services and software version upgrades.

Cloud ERP: Types of Software

Before all, no clouds are the same. Some organizations modernize their outdated ERP systems to run from their in-house data centers. However, this way, they’re risky to omit the main gains of cloud-powered ERP, such as scalability, safety, and simplified improvements. Mainly, cloud ERP is a broad term, including different soft variations described below:

Single-Tenant SaaS models

It implies a one-short version of ERP that serves one particular organization and can be personalized for business needs. All the corporate info is saved on a private server managing a unique software. The main benefit of this type is the top-level security of corporate data; since there’s only one customer hosted on the infrastructure, there’s no risk of other clients accessing your data (by chance).

Multi-Tenant SaaS

Unlike a single-tenant SaaS, this kind of software has multiple-focus serving. The companies use the shared infrastructure and are arrayed on the same server. However, each enterprise’s data is secured and cannot be approached by others. It is a common type of cloud ERP.

Private cloud

It’s designed to meet the demand of single clients, submitting ownership of data information and its security. The architecture and software are deployed on the company’s own on-premise data hub. As a result, this system is easier to customize and offers strict data security and compliance options.

Public cloud

Cloud service providers possess and supervise all information technology resources. In addition, the system architecture remains public, making it possible to apply across multiple organizations.

Hybrid cloud

Hybrid systems join the working efficiency of public systems and the security credentials of private ones. Hybrid solutions focus on merging computing facilities, allowing corporations to share the workload across business units based on their IT and data security demands. The key concern is to design and administer such models.

Types of Cloud ERP
Types of Cloud ERP

Why Do Businesses Need a Cloud ERP?

There are many reasons companies need to invest in cloud ERP, which stem from the advantages of the business environment. Let’s take a bird’s eye on some of them:

Centralized solution

If you aim to streamline business growth, make sure your IT landscape works as a clock. Therefore, it’s vital to merge all the corporate functions and information into a unified unit. It’s only achievable with a centralized cloud ERP. Such solutions guarantee complete information integrity and tamper-free data. Whether you want to trace your sellouts or scrutinize your clients’ behavior to increase a conversion rate, cloud ERP system development will provide you with a better understanding of every step involved.

Easy integration

Generally, SMB companies strive to implement point software to cater to area-specific needs (e.g., last mile delivery app), neglecting to modify their linchpin ERP. However, these solutions are associated with extra expenses and complexity since they may be challenging to integrate with already established ERP. Modern cloud-based solutions change the situation by 360 degrees providing easy compatibility with newly integrated software.


Unlike local systems, cloud ERP is budget-friendly due to a straightforward implementation process. It’s suited for small organizations looking for affordable capital costs and hardware installation prices. Cloud ERP is based on a subscription model, meaning you’re charged for your use.

Moreover, since it doesn’t demand its own data center or support team, the implementation is quick and straightforward. All the information is saved, sustained, retrieved over the cloud, and controlled by 3rd parties. It lets firms make the most of ERP applications while keeping the pretty sum “in the pocket.”


Cloud ERP is a tried and true solution being applied by thousands of organizations worldwide. Businesses dealing with cloud ERP can easily monitor their transformation attempts by possessing immediate access to the tools that drive those modifications. Moreover, migration to the cloud is a critical step for “from startup to scale up” companies to take action forward. 

Author’s Bio

Yuliya Melnik

Yuliya Melnik is a technical writer at Cleveroad. It is a web and mobile app development company in Ukraine. She is passionate about innovative technologies that make the world a better place and loves creating content that evokes vivid emotions.

This Post Has One Comment

  1. Harper

    Nice article. Got to know everything about CLoud ERP. Keep posting <3.

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