Definition

cloud ERP

This definition is part of our Essential Guide: Oracle ERP software implementation tips and trends

Cloud ERP is an approach to enterprise resource planning (ERP) that makes use of cloud computing platforms and services to provide a business with more flexible business process transformation.

Enterprise resource planning is an industry term for the broad set of activities that helps a business manage the important parts of its business such as purchasing and inventory management. ERP applications can also include modules for the finance and human capital management aspects of a business.

To some industry experts, the promise of cloud computing is that it will provide an opportunity for business to completely transform how it uses and pays for information technology.  For example, cloudsourcing legacy ERP applications might eliminate the need for a business to purchase the necessary server and storage hardware and maintain it on site which, in turn, has the potential reduce operational expenditures (OPEX).  Other industry experts, however, point out that the problems associated with ERP software deployments -- such as integration problems between ERP modules and a company’s legacy systems -- would simply transfer to the cloud. 

The hope is that ERP software developed specifically for cloud computing environments will include new feature sets that were simply not possible using old technology. Until then, cloud ERP is seen as being good for startup organizations and new business divisions within an existing company.

This was last updated in June 2012

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What is the risk in using this type of ERP Modules (Cloud Based Systems) in comparison to popular / classical systems such as SAP and Oracle, where the company uses its own servers to protect confidentiality of its critical information such as Procurement and supply chain cost and sources and similar components which forms the basis for its products pricing and marketing operations. 
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