Guide to ERP in the cloud

How to guarantee flexibility, integration and low costs for ERP systems in the cloud 

If 11 years ago, a study carried out in the USA showed that people read or listened to more than 100,000 words a day, today the numbers are practically incalculable. The amount of data stored on the internet alone is approximately 4.4 zettabytes. Most of these figures refer to data from individuals, although there has been a notable growth in the use of cloud computing technologies by companies.

With the adoption of working from home, remote access to ERP systems is no longer the exception, but the norm. This reality, combined with the current economic situation, has led to a trend towards the adoption of ERP systems in the cloud, which promise to simplify their use while reducing costs.   

If you're an entrepreneur, planning and managing your company's resources is basically vital. That's why the ERP system, which used to be a technology reserved for large companies, is increasingly being used by small and medium-sized national companies, in a commercial model of payment per user, per month.     

Enterprise Resource Planning is a widely used tool for managing various processes and areas. It can, for example, improve business communication because it links different departments of the company with their respective information. From this correlation between areas, it is possible for the manager to have a centralized and, at the same time, specific view of each of the company's areas.  

Personnel management, customers and suppliers, product demand, finance, purchasing and sales are just a few examples of areas that ERP can organize. 

As it is divided into three categories: application, database and management, it facilitates the flow of processes and communication, which gains agility. 

Gaining flexibility with cloud ERP

ERP in the cloud is a software service (SaaS - software as a service): the model guarantees that company information will be handled and saved securely in the cloud, via the Internet. All you need to access it is a computer or device with internet access, and some ERP system modules can even have mobile applications.

The company outsources all IT infrastructure needs and a package of hours for integrating and parameterizing the ERP system, which is necessary to adjust the software to each company's business needs. The cloud ERP can also store electronic invoices in an indexed and secure way, to guarantee traceability and legal requirements, including the LGPD, which comes into force in August.

You can already see that these cloud management systems are very intuitive and really do help with company management. But like any innovation, these ERPs also come onto the market full of myths.

One of the myths about using ERP in the cloud is information security. Cloud ERP services include several layers of information security that are managed by the provider, such as firewall, VPN, backup and protection against data hijacking. It should be noted that these security layers are rarely available in environments on the customer's infrastructure, on-premise. 

We need to rethink the information circulating around us and, yes, know which is correct and which is not.  

Separate the wheat from the chaff

In all areas there is true and false information. In order to make the right decision for your company, you need research and knowledge of each subject. It's no different with technology and information.

We've listed some examples of the myths about ERP in the cloud so that you can understand them better: 

Not so secure in the cloud 

As we've already mentioned, ERP in the cloud guarantees additional layers of protection against data leaks or hijackings. For sensitive information, the customer can choose to contract additional cybersecurity services from the cloud provider, such as multi-factor authentication (MFA), password vault (PAM), protection for terminals, among others. Not to mention that these features are much cheaper and easier to configure and implement in cloud ERP than on-premise. 

The cost of maintaining ERP in the cloud is very high

It's important to choose cloud ERP providers that are able to charge in local currency. There has been a lot of talk about skyrocketing costs in the cloud, but this is actually a consequence of the business model of the big international providers, which is fixed in US dollars.

Another important factor is the amount of customization and parameterization required to adjust the ERP software to your business model. These modifications compared to the "standard" ERP product can end up being expensive. The best practice here is to try to use the system as standard, as a rule. 

Change needs should be documented and discussed with the team from a cost-benefit point of view, categorized as essential, ancillary or enhancements. Essential functionalities would be implemented in the first ERP version available (also known as a minimally viable product or MVP), and other categories implemented over time.  

Contract terminated, data lost

Beware of cloud providers using proprietary systems: prefer ERP systems that are widely used by the market, with more than one choice of cloud software provider. Ensure that once your contract with the supplier has ended, you have access to a copy of all your data. It is also important to ensure that this data is delivered in a format that makes it possible to upload it to an alternative supplier.

Traditional ERPs have more functionalities than cloud ERPs

Not at all. As cloud ERPs have matured, they already incorporate all the functionalities available for on-premise software. An important precaution is to make sure that your cloud service provider guarantees future integration of your ERP: many providers sell simpler offers that can't integrate with other systems in the future (such as CRM and customer service systems). To guarantee the use of your ERP system in the medium and long term, opt for hybrid or private clouds.

In addition to centralizing information and being a point of convergence between various areas of the company, ERP in the cloud also allows access from anywhere, at any time, which becomes an important feature in times of home-office. 

A company that has an online enterprise resource management platform is able to resolve issues more quickly and efficiently, which means an increase in productivity and competitiveness.

Cost and implementation are the main differences between cloud and on-premise ERPs. 

ERP in the cloud

It is accessed via the internet, from an application or browser. This means that it is stored in an outsourced data center and, as it is more flexible, its payment model is also different. As it is provided as SaaS, you can pay per month, according to the modules used and the number of users.

Companies with several units can connect easily. All it takes is secure internet access, so that everyone is connected to the same information base with updates real time.

Local ERP 

As the name suggests, the company needs to have equipment and machines that will run this application. This structure can have a high investment cost for the company, as well as occupying IT teams with repetitive maintenance and information security tasks that don't generate value for the business

Lower security compared to the cloud model, given the layers of cybersecurity included in the cloud service, as well as the possibility of contracting optional services.

Which one to choose?

The most suitable model for medium-sized companies is ERP in the cloud, and not just because it's growing at 10% a year, as stated by research firm Markets & Markets. But because it is a simpler form of management and integration and, if done correctly, more secure than on-premise ERP. 

With the aim of facilitating your company's journey to the cloud, SBA Edge, in partnership with iT2x, offers integrated Totvs ERP migration, hosting and parameterization services, with plans starting at R$26.65 per user.