Public Cloud Erp Ideal for Small Businesses only

Public Cloud ERP Ideal for Small Businesses Only

Abstract

Enterprise resource planning (ERP) are software packages that look for a higher efficiency and effectiveness for businesses. It includes all areas of a business such as sales, inventory, human resources and finances. ERP software is designed for larger enterprises that require dedicated teams to customize, analyze the data and reports and handle upgrades and deployment. In some cases, ERP software increased the gap separating larger and smaller enterprises. The introduction of software as a service (SaaS) is helping to make this distance smaller. SaaS consists of software that is made available by a third party and it is also a category of cloud computing (Gallaugher, 10.7). The creation of SaaS ERP offers solutions to small businesses. This paper will describe the advantages and disadvantages that SaaS ERP’s offer and how they affect small business administration.

Advantages

The public cloud offerings available today, such as salesforce.com, present ideal solutions for small enterprises that lack IT and application experience and those who are interested in a low cost solution that allows them to grow their own businesses. The highly standardized business applications of a public cloud offered by SaaS can be a good starting point for these companies, enabling them to experience ERP software at a low cost and to find out if the public cloud offering suits their business requirements. SaaS ERP’s offers great opportunities to small enterprises. Some benefits of this system include support, cost, persistence, and standardized business application (Seitz, 2010). All these benefits apply to cloud computing that allows SaaS ERP’s to function.

Support refers to taking the staff away from performing lengthy and costly software and infrastructure implementations and upgrades. With this in mind, organizations do not have to spend time on maintaining expensive servers. IT staff will have more time to focus on innovation and other organizational differentiators, rather than on time consuming IT management issues. For example, in the automotive industry attention to detail is critical to ensure the quality of precuts making sure that the demand is met. With a cloud based solution that supports this demand, the IT department would have more time to focus on developing vertical IPs that will help the industry gain a competitive advantage (Beaubouef, 2011). This way the industry does not spend extra resources and helps to decrease cost.

For small businesses embarking on initial or conversion operation, the pay-per-use cloud computing model can be a cost effective approach, and can shift expense classification from capital to operating. This makes the customer eliminate installation and operation usage of the application