ERP is an enterprise application which calls for organization wide change – It involves not only infrastructural investment but overall culture and work attitude change in management & employees.
What makes life easy is adopting the change in phased manner. A cloud ERP platform just provides you the same, which is not true with traditional ERP setups.
Two distinct variations of traditional ERP are – on premise ERP and hosted ERP
In on-premise ERP solution, buyer owns the setup, initial installment & maintenance completely. ERP licenses are acquired as per organization size & requirement, and servers and work stations are allocated in-house. The enterprise has to bear the cost of maintaining the servers and the space they require. That’s not the end enterprise needs to have a solid disaster recovery plan for critical inevitable situations.
On the other hand, a hosted ERP is service offered by third party who hosts servers running ERP solution on it. In this case, enterprise owners are saved the efforts to buy and maintain servers but still payoff is in terms of speed and bandwidth which is available to access ERP functions over network.
Compared to traditional ERP systems, cloud ERP technology based on cloud computing offers numerous advantages to enterprises that allow them to enjoy enterprise wide benefits with minimal investments. The most significant advantages are: much lower cost, faster time to market, and great opportunities for creating new sources of value.
Biggest advantage available with Cloud ERP is enterprises can plan for smooth transition from existing processes to new processes that Cloud ERP brings in.
Different pricing models offered by Cloud ERP service provider are
- Per user per month license fees
- per company per month charges
- application development charges for custom solution
Enterprise owners can gauge their requirement and also speculate on how this change will be accepted within different departments in the organization. Business owners can buy few licenses to start with and gradually move towards once new processes and Cloud ERP solution starts becoming a habit in daily work routine. Importantly in a way you outsource everything about Cloud ERP implementation to your vendor while you focus on your core business.
This helps organization to bring down their CapEx to minimum, get knowledge of ERP life cycle and move on if services provided by current Cloud ERP solution provider are not satisfactory.
Approx pricing of different players in the Cloud ERP market is as below:
|Sage ERP X3
|Microsoft Dynamics AX
|Oracle E-Business Suite
|$5K + per month-