This particular assignment reflects answer of two questions such as impact of cloud computing on corporate strategy and value chain as well as the effectiveness of cloud based ERP system in business process. Moreover, this assignment also reflects the aspects that need to avoid during the implementation of cloud based ERP system in business. Here, analyst represent the impact of cloud computing such as transformative impact, impact on value delivery, equation, resource management, performance management, risk management, etc. Several diagram drawn by the researcher in order to display the impact process of cloud computing. In next question, analyst represents the benefits of cloud computing such as cost reduction and saving, mobility, flexibility, etc of cloud based ERP solutions in business.
Cloud computing has the ability to load software, cloning for meeting sudden workload demand, virtual server, etc. In business industry and rapid growth of Information Technology, cloud computing is used widely. In the market, there are several cloud service providers such as Apache, OS, MySql, etc.
This study also describes the ERP system in business with key risks during implementation of cloud based ERP for business organization.
Implementation of Cloud based ERP solution in the business
In order to increase organisational performance and prepared the best accounting information system, organisation in business sector has to involve Enterprise Resource Planning (ERP). It is an integrated system that simply makes overall organization process into one way. SAP is one of the key suppliers of ERP system for business. However, in early days, most of the people used ERP system traditionally through involving a large IT team within the workplace. However, it has been also seen that ERP is the biggest information technology process that often not execute properly. As a result, company faced trouble to execute the program. Moreover, development of traditional ERP system is high cost budget. For small business, it is impossible to implement ERP system. However, in these days of rapid technology growth, suppliers of ERP such as SAP introduced cloud computing process in development of ERP solution for business organisation. It is much cost effective and easy to execute. Rountree & Castrillo (2013) argued that due to moving resources from Software as a Service to the Platform as a Service, the concept of cloud based ERP solution plans introduced. The cloud computing platform moves from software as a service to platform as a service is just because of embracing growth of iPads and Smartphone applications. Through the variety of ways, cloud computing make the resources available for effective management. The cloud computing provide more holistic system to the organisation that shift the operational skills for delivering business value and effective infrastructure.
If the organisation implements cloud ERP in their business, they are able to achieve following benefits that delivers high benefits –
Reduce total costs of ownership:
Cloud based ERP solution can allow the organisation in building application with los budget and also allow to access from anywhere. Thus, they can able to maintain their CRM, HR department, analytics report, etc. Thus, cloud based ERP system generates automatic process and decrease the requirements of hardware and software as well as the IT team within the organisation. Cloud based ERP system required low cost to develop as well as forecast. Abidi & Abidi (2012) cited that cloud based ERP system reduce cost more in order to make low competition for the organisation.
Better Alignment of IT investment:
The cloud based ERP system has required little of capital rather than the tradition ERP system. Solution of cloud based ERP system is more flexible rather than other such SAP ERP system. In order to develop the cloud based ERP system, organisation has to bare little in technology. Therefore, Huang & Nicol (2013) suggested that the costs of cloud based ERP solution can up and down according to the infrastructure of organisation. The third party vendor take total responsibility in developing the cloud based ERP system. Therefore, company in business industry can align their IT investment in better way. For example, if the organisation has cloud based ERP system it allows the organisation in monitoring the entire system and ensuring the system uptime. As the cloud based ERP solution monitor and access information automatically, the IT department can able to focus more on the other task such as resource management, CRM. HR, SCM, etc.
The cloud based ERP system allows the staffs or employees of the organisation in accessing information from any place. Apart from that, the cloud base ERP system was provided by the large organisation such as Google, Amazon, Microsoft, etc. Therefore risk of information theft in accessing from outside of the office has low. With the help of internet, employees of the firm are able to access information from any locations.
Faster Time to Value:
The cloud based ERP solution service providers demand that, it deliver performance in a better way instead of traditional ERP system. Cloud based ERP system has been applied for computing the resources. Therefore, it allows the organisation in increasing their performance within lower costs. Apart from that, it has been seen that Microsoft dynamics assists the organisation in consistence performing as well as faster service providers n terms of improving the performance. Moreover, through the involvement of cloud based ERP system, organisation can able to save their significant costs.
A dynamic business solution:
Cloud based ERP system is one of the most effective and efficient resource scalability regarding costs. Cloud based ERP system can allow in purchasing the amount of resources additionally. Therefore, the existing IT staff can focus more on the value add of projects rather than in maintaining day-to-day operations.
Solution for organisation of all size:
Cloud based ERP system connect the entire process of business in one system such as information about suppliers, locations, clients, etc. For example, Microsoft dynamic ERP system is an effective tool that maintains interoperability between the external and internal system for daunting task.
Risk that needs to avoid during the implementation of cloud based ERP system
In order to implement the cloud based ERP solution within the organisation, company may faced several risks. Therefore, for implementing the cloud based ERP system in business, need to avoid following risks such as –
It is the key risk in implementation of cloud based ERP solutions because third party vendor install ERP system within business process. Apart from that, prominent cloud hosting companies install system. Therefore, leakage of information regarding security may create several risks. Therefore, during the implementation of cloud based ERP system, need to avoid the security risk through developing proper rules and regulations. Majority of user faced challenges in conducting ERP system. Therefore, management of the organisation or head of the department has to take total responsibility in adopting security breaches during implementation of ERP system.
Concern of business owners:
In major cases, it has been seen that, owner of the business ever closely involve with the implementation process of cloud based ERP system. As a result, the third party vendor unable to implement ERP solution according to their requirement. Therefore, several risks occur and implemented system fail to interact the business operational process. Therefore, for implementing the cloud based ERP system, need to involve closely with the third party vendor that install the program and describe them about the entire process clearly as well as requirement of the company.
Federal and state regulation:
It is also another factor that needs to consider for avoiding risk in implementation process of cloud ERP solution. In order to mitigate or avoid the risk of implementation cloud based ERP system, organisation especially the financial institution and the heath care service providers has to involve laws or regulation that covers sensitive data or information.
This study concludes the impact of cloud computing in corporate strategic and value chain and affect of cloud based ERP system in business. Apart from that, suggest to avoid the risk during implementation of cloud based ERP solutions in business.
Abidi, F., & Abidi, H. (2012). Cloud Libraries: A Novel Application of Cloud Computing. IJ-CLOSER,1(3). doi:10.11591/closer.v1i3.586
Rountree, D., & Castrillo, I. (2013). The basics of cloud computing. Burlington: Elsevier Science.