Why businesses are moving towards cloud-based ERP systems?

ERP (Enterprise Resource Planning) systems have been around for quite a few years now. In fact, the very first software of that kind was created in 1990. However, while the concept of an all-in-one business management solution remained important, the overall structure of ERP systems has changed radically over the years. One of the most important developments is the move towards cloud-based business management software. This article will look into the key reasons for this shift.


One of the most straightforward yet compelling advantages of adopting cloud-based ERP is the considerable cost savings. Traditional on-premise ERP solutions often require a significant upfront investment in both hardware and software. These initial costs can be prohibitive for small to medium-sized enterprises (SMEs). Furthermore, there's the constant financial drain associated with ongoing maintenance, periodic upgrades, and inevitable troubleshooting.

In contrast, cloud-based ERP systems often operate on a Software as a Service (SaaS)model, which is subscription-based. The financial outlay becomes an operational expense rather than a capital one, making it more palatable for budget-conscious organisations. Moreover, the costs related to maintenance and updates are generally included in the subscription fee, offering a more predictable financial commitment.

Real-time data and analytics

In the modern age of information, data is one of the most important assets a business can own. Cloud-based ERP systems excel in offering real-time data analytics, since all information is stored in a cloud and available to everyone instantaneously. Such instantaneous insight is a cornerstone for strategic decision-making, particularly in sectors like cloud inventory management, where timing and accurate demand forecasting is of the essence. The ability to view current stock levels in real-time helps in making instant procurement decisions, thereby reducing the risks of stock-outs or overstock situations. 

Scalability and flexibility

The needs of a business are ever-changing, influenced by various factors such as market conditions, consumer behaviour, and technological advancements. Cloud-based ERP systems offer a high level of scalability and flexibility, allowing companies to adapt quickly. This becomes particularly vital when businesses look to integrate other cloud functionalities as they grow, like cloud CRM or cloud based payroll software. Being cloud-native allows these ERP systems to scale up or down based on the fluctuating needs of the business, without causing any disruption to existing operations. 

Security measures

Cloud VS on-premise security measures is where a lot of businesses’ opinions divide. It is true that, if you opt for a cloud-based ERP, you will not have much control over the cybersecurity measures of the system - the provider does it all for you. However, many companies see this as an advantage rather than risk. 

Reputable cloud ERP providers will implement a range of security technology, from smart data encryption to two-factor authentication requirements. Additionally, the software provider will invest a lot of resources to regularly update the system with more advanced security measures, since they are fully accountable for keeping your sensitive data secure from cyberattacks. 

Streamlined processes and collaboration

The inherent architecture of cloud-based ERP allows for better integration between various functional areas within an organisation. Take, for example, the connection between ERP and CRM (Customer Relationship Management). In a cloud-based ERP system, ERP CRMintegration is almost seamless, ensuring that customer data flows unhindered across sales, marketing, and customer service departments. Such synergy promotes better collaboration among departments and significantly streamlines various processes. Not only that, it also saves a lot of time and money, which would be spent managing multiple different software for each business process. 

Remote accessibility

The ability to work from home or anywhere in the world is becoming a common practice in an increasing number of companies. That is why remote accessibility of an ERP system is now more important than ever. Cloud-based ERP adapts to this social trend seamlessly, as it allows all essential business processes to be accessed from any device or location, as long as the user has an internet connection. Whether it's authorising payments through cloud-based payroll software or accessing customer data via a cloud CRM app while on a business trip, the remote accessibility feature is a strategic enabler for modern businesses.

Easier regulatory compliance

Regulatory compliance is a non-negotiable aspect of business operations. Whether it's data protection laws or industry-specific regulations, staying compliant is critical. However, ensuring compliance can also be a very complex and time-consuming process. 

Cloud-based ERP systems relieve some of this burden by being programmed to update automatically with the latest compliance measures. Not only that, it can automatically detect and flag potential compliance issues. Therefore, the system becomes a dynamic tool that adapts to legislative changes, substantially lowering the risks of non-compliance. 

Final word

The shift from traditional to cloud-based ERP systems is not arbitrary; it is driven by numerous strategic advantages that these systems can offer. From being more cost-effective and scalable to offering real-time analytics, cloud ERP integrates all business needs within a single, comprehensive solution.

Looking for the best Cloud ERP?

Odoo ERP doesn’t just offer a cloud-based deployment option - it also has a hybrid (Odoo.sh) version, which encompasses the best functionality from both cloud and on-premise software. This powerful yet cost-effective ERP system will cover every aspect of your business, including cloud CRM, cloud based payroll software, cloud inventory management, and much more.

Want to find out more about Odoo? Get in touch and one of our experienced Odoo specialists will answer any questions you may have.

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