Analyzing Cloud Technologies For Enterprise Resource Planning System Essay.

Purpose of the report

Discuss About The International Journal Scientific Technology.

 The paper mainly focusses on the concept of ERP systems in the cloud. ERP is considered as a process which is used by a company in order to manufacture, manage as well as for integrating areas including purchasing, sales, marketing, human resource and finance (Payne 2014).   It is identified that most of the organization faces lot of challenges in accessing as well as storing information efficiently and therefore the companies are investigating technologies which they can applied to ERP system for managing and storing information successfully (Mdima et al. 2017).

 In this report, number of ERP systems are discussed in order to investigate the best ERP system for organizations. In order to become aware about the best ERP system, the benefits and weaknesses of each of the ERP systems are discussed.

The main purpose of the report is to analyze the different cloud technologies in order to investigate how the technologies can be adopted by the companies within the ERP system and which technology will be best for reducing the pressure that the companies generally faces. This will be mainly done by analyzing the strengths and weaknesses of each of the options that is provided for comprehending the best ERP system for the organizations.

The entire structure of the report is mainly categorized into three sections. The introduction part of the report elaborates the brief definition about the Enterprise resource planning system. On the other hand, the discussion section of the report discusses about various types of ERP system including its advantages and disadvantages. In addition to this, the discussion part includes certain case study examples which reflects about the utilization of various ERP systems by the organizations. In the last section, the report provides summary of the points that is elaborated in the discussion section of the report.

 In this section, all the three types of ERP system including on premise ERP, hosted ERP and Cloud ERP systems are discussed in context to their benefits as well as risks on various prospective organizations.

According to Taniser (2016), it is identified that the on-premise ERP system generally refers to the decision of a company for sourcing the ERP software in-house and for maintaining it within a physical office rather depending on the supply of the vendor. On-premise ERP system are generally present under the authority of the organization and it generally runs from the backend office.  It generally assists in providing the company to utilize their own infrastructure for controlling the security system, processes as well as people (Bassi and Chaudhary 2015).

Discussion

It generally assists in providing the security as well as control for utilizing their own IT infrastructure for connecting people, processes as well as systems.  The system generally helps the companies to secure as well as supervise the ERP system under their control and thus the system is suitable for organizations that plan on integrating the daily functions in a quite specialized way (Alsanea 2015).  In addition to this, on premise ERP system is suitable for organizations that have proper IT service management system.

There are number of benefits that the companies achieve by utilizing the on-premise ERP system and the benefits are illustrated below:

Data control: When a company hosts on-premise ERP, then the company can be able to control everything including the security measures that were utilized for controlling the physical access (Dhar and Mazumdar 2014). The company cannot be left at any type of challenges or risks because the workstation, which is connected outside the cloud ERP network, is insecure.

Less vendor dependency: It is identified that the companies that utilize on-premise ERP system can be able to remove the dependency of the vendor and as a result they can be able to change various aspects that are related to the system as per the requirement (Osman 2016).

Easier customization: On-premise system does not throw way the applications that are useful and which can be tailored within the business rather in assists in providing options of customization so that one can work with number o apps into your workflow (Alsanea 2015).

Limit costs: By utilizing on-premise solutions, the companies does not need to pay for the upfront costs however the companies need to pay the on-going expenses including energy as well as IT maintenance.

 The only weakness of utilizing the on-premise ERP system is that it is too much time consuming to implement the entire ERP system and the cost that is required for the hardware is too high. (Osman 2016).  As most of the companies are unable to afford the cost of implementing the system despite pf its advantages and thus they do not utilize the on-premise systems.

 Blach Construction Company utilizes on premise ERP system for maintaining its physical office rather depending on the hosted ERP systems. Blach Construction Company is one of the small sized commercial builders that help in providing tuition reimbursement for approved certifications as well as coursework (Blach.com 2018).  Due to the utilization of on-premise ERP system the organizations is able to customize the entire system that is totally based on their requirements and it helps the company to customize their entire solutions for fulfilling its business needs (Dhar and Mazumdar 2014).

On premise ERP system

In addition to this, it is identified that the utilization of on-premise ERP system lead the organization independent on the presence of internet connection for accessing the system as it depends on the internal network of the organization for accessing information’s that will be needed for the business process (Bassi and Chaudhary 2015). The biggest advantage that the organization receives is control on data due to the use on-premise ERP system. Due to all this advantage, the company utilizes on-premise ERP system however due to its use; Blach faces lot of challenges and issues. The challenges and issues that are faced by the company are illustrated below:

Difficulty in deployment: The Company faces lot of difficulty in deploying the on-premise solution as it is very much resource as well as time consuming (Osman 2016).

High initial investments: The initial investment that the company made is high due to number of reasons including license of the systems, upgradation cots, hardware costs as well as other supporting costs.

 On the other hand, it is stated by Albar and Hoque (2015) that the Hosted ERP systems came within the business scenario in the year 1990s and it is generally purchased within the help of a vendor. The hosted ERP system have a web enabled feature that is generally managed with the help of the service provider on a remote server and it can be accessed with the help of the individual who engages in managing the ERP system (Peng and Gala 2014).

The companies do not need to pay for the upfront servers, which are generally installed within the data-hosting centre and then the vendor demands the company to make the upfront payment as well as rental fees for the hosting related services. It is identified that hosted solutions generally helps in offering an effective compromise by allowing one to benefit (Gupta et al. 2017). Under this appropriate arrangement, the company can be able to buy the ERP software and then purchase or ire the needed physical as well as virtual servers at a very much secure hosting facility. In addition to this, other hosting set ups are also present, which mean that one, can select the best option from present circumstances.

 There are lot of benefits that the companies achieve by adopting the hosted ERP system. It is identified that instead of maintaining the physical servers the company needs to focus only on the rent servers that are needed. It is found that hosted ERP system are quite customized however but not like the on-premise ERP system (Jain and Sharma 2016).  In order to utilize the on-premise ERP system, the companies need to have very much limited number of IT systems for managing. The ERP vendor manages the security issues such as threats from anti viruses. The vendor maintains even the data backups. Other advantages include data redundancy and scalability (Albar and Hoque 2015). Only the company due to the licensing agreements can use a certain amount fees need to be paid for the maintenance costs (17%).In addition to this, the other advantages that the companies receive which utilize hosted ERP system are listed below:

Hosted ERP system

 Lower upfront investment costs: Due to the use of hosted ERP system, the companies do not need to invest much on the upfront costs as it helps in eliminating both costs as well as efforts (Haddara, Fagerstrom and Mæland 2015). It is found that there is n requirement to integrate or install the entire hardware for supporting the software as there is no need to hire any additional staff for supporting the different types of applications.

Faster ROI: Hosted ERP system can be successfully integrated that further assists in ensuring that the business generally receives faster return on the IT investments that is made. It is identified that implementations can just take few weeks for finalizing the entire on-premise option.

Automatic software upgrades: Due to the use of hosted ERP system, the provider can be able to automatically add the new features and can also able to upgrade the software that are needed in a very much unobtrusive way (Tashkandi and Al-Jabri 2015). Therefore, the employees can also able to eel assured for accessing te latest technologies that are generally available to them.

Flexibility: It is identified that the companies that utilizes hosted ERP system are very much scalable as well as flexible in an effective way which can be adapted for fitting constantly within the changing requirements of the business. The company can be able to remove or add the users as per their demand as well as for satisfying their rising needs of the business.

Minimize dependency:  The hosted ERP system generally requires very much fewer technical resources as compared to on-premise applications as it helps the provider to handle different aspects of the hardware software as well as another network administration (Gupta and Misra 2016).

 In spite of the advantages, the hosted ERP system have some drawbacks due to number of uncertain variables that crosses the monthly budget of the organization. The other drawback that the companies face while utilizing hosted ERP system is that the system entirely shuts down when the internet connection is cut from the system. In addition to this, the companies that uses hosted ERP system found that it is quite difficult to integrate number of applications within the system. (Wu et al. 2014).  It generally needs to be hosted for proper remote centre that requires to have proper as well as high bandwidth. The other disadvantages or weaknesses that the companies face while using it are listed below:

 Limited functionality: It is identified that some of the providers does not provide the customization as well as support services that is mainly needed by the business or those that generally may charge more.

Limited bandwidth: The business needs to understand or analyze the procedure of allocating data across different data servers for avoiding the exceeding bandwidth of the cloud-hosting plan (Chen et al. 2015).

Less control: It is found that the business generally provides their access of data to the cloud hosting organizations and of any type of challenges or issues occurs then they need to contact with the company who may not be capable of giving the proper support at that moment.

 Classic community management corp. organization utilizes hosted ERP system. The organization utilizes TOPS software hosted that assists in giving CCM what the business generally requires to get the business off the ground in the absence of proper capital expenditure and staff (Classicmgmt.net 2018). As per the owner of the organization, they do not have funds to support the salaries of other people and thus they are saving money all over the place.

However, in the end of the year the project has 1000 units with 10 t 15 associations. Al the offices are generally run with the help of the owner as well as one accountant. The labour saving generally helps in adding up to an amount of $90,000 monthly, which reflects that due to the utilization of hosted ERP system the company, is able to start its business with very much small amount.

 Singh and Nagpal (2014) stated that cloud-based ERP system generally helps in allowing the companies to utilize the software over the internet.  Cloud based ERP generally relies on the cloud rather depending on any proprietary server infrastructure for helping organizations to share information across various departments. It is identified that Cloud ERP software mainly integrates with some of the essential functions including inventory, accounting, order management, customer relationship management and more (Bento et al. 2014). Additionally, it is identified that Cloud ERP are very much assessable as well as much more mobile as compared to other traditionally cloud technologies. Companies can be able to upload as well as can be able to access data with the help of cloud at any time and at any place with the help of an internet connection that assists in providing grater collaboration between various departments of the organizations.

 It is identified that utilization of cloud ERP system generally frees up both computational power as well as resources which are necessary in order to deploy the standalone ERP solution. Cloud based ERP system is quite helpful for smaller business that are unable to afford the heavy infrastructure which is generally needed.  It is identified that cloud-based ERP software generally needs both hardware as well as human resources in order to maintain it properly (Armand and Roger 2017). Cloud based ERP solutions generally have monthly subscription procedure that assists in outlaying the initial costs as well as helps in minimizing the entire operational costs of the organizations.

It helps the business to expand dynamically due to the low initial resource planning (Ramasamy and Periasamy 2017). The investment cost on various technical staff is very much less and in addition to this, the IT service can be handled very much easily by managing all the services. Cloud ERP is considered to be fast as the data centres are hosted as well as maintained with the help of the best hosting environments like Microsoft Azure and Amazon web services. They main is to make the data much more accessible as well as secure (Bindi 2016).  This data centres helps in ensuring appropriate geographic diversity and proper backup storage in multiple places for making sure that the data can be retrieved whenever it get lost. In addition to this, it is identified that due to the use of cloud-based ERP system, the companies can be able to scale their Cloud ERP packages for accommodating unlimited number of users without their proper hassles of maintaining or replacing the n premises software as well as hardware.

 In spite of the benefits, it is found that there are number of drawbacks or risks that the companies face while utilizing cloud-based ERP system. Gupta and Mishra (2016) stated that the company generally can lose their governance of business function which further enhances their dependability which is one of the major issue.  In addition to this, the implementation cost generally includes some hidden costs that further enhances the budget of the organizations. It is found that the legacy system does not generally integrates with the cloud-based ERP system.

Moreover, the other drawbacks that the companies find include scalability, lack of proper customized functions as well as cyber-attacks. Data security issues are considered as one of the biggest issues that are mainly related to supply chain and the cloud (Chen et al. 2015). As the information are web-accessible, data breaching is considered as one of the legitimate concern for the entire production facilities. In addition to tis, it is identified that the cost of cloud ERP system generally outweigh the cost of on-premise ERP system as the system is technologically advanced, it is considered as superior and thus it costs more.

Bershire Hathaway privately founded the Shaw Industries in 1945.  The company mainly deals with the manufacture of carpeting, flooring ad well as other types of building materials (Shaw Industries Group, Inc. 2018). It is found that more 2000 staffs of the organizations are currently working within the Shaw industries. It is found that the total revenue of the company is around 6 billion dollars and the headquarter of the company is situated in Georgia.

The company mainly decided to adopt the technology of ERP system which is generally known as “NetSuite”. It is found that the cloud ERP system generally helps in providing number of benefit to the organization. It is found that initial investment that is made for the ERP technology by the company is very much low and thus the company get much more flexibility (Armand and Roger 2017).   The company will generally receive benefit with the help of subscription services that is generally provided by the ERP system instated of following the yearly payments. This generally help the Shaw industries to spread payment like a payment that is tax deductible.

 Shaw industries can utilize the new ERP system for enhancing the flexibility of the business. It is found that the new system allows the Shaw industries to access all the information from a single platform. It is found that the collaboration of the entire business functions generally enhances due to implementation as well as mismanagement of data. It is found that the Cloud ERP system generally helps in allowing the Shaw industries to utilize business intelligence. The flexibility that is associated with cloud ERP generally assists in allowing the company for selecting its own dashboards that is generally suitable for the business environment. The entire analysis helps in proving that the Shaw industries managed to reinforce the benefits of cloud-based ERP system (Jain and Sharma 2016).

Conclusion

It can be concluded from the entire paper that there are number of cloud technologies and companies are generally investigating how the technologies are applied within the ERP systems requirements. In this paper the companies like on premise ERP system, Hosted ERP systems as well as Cloud ERP systems present numbers of options in order to investigate the best options for the companies. The paper compares as well as contrasts between different options and it is identified that all the options have advantages and some disadvantages. However out of all the options, cloud-based ERP system is considered as the best option for the organizations as it assists in providing the facility of accessing data from anywhere at any time with the help of proper internet connection. In addition to this, it is identified that cloud-based ERP system assists in offering cost savings, flexibility, security, scalability and speed which is not only helpful but also appealing for the companies that utilizes it. Moreover, it is found that that with the help of cloud ERP system the organizations can be able to accommodate unlimited number of users without their proper hassles of maintaining or replacing the n premises software as well as hardware.

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