As technology continues to advance and evolve, more businesses of all sizes are considering cloud ERP than ever before. Business organizations nowadays need advanced, globally-connected, and continuously updated tools and systems that allow them to focus more of their time and energy on implementing growth initiatives and less on day-to-day IT management. That’s where cloud ERP comes into play.
Cloud-based computing (also called Software as a Service, or SaaS) allows users access to software applications that are hosted, offered and managed in the cloud platform and run on shared computing resources via the Internet rather than on-premises within an enterprise’s own data center. These computing resources are maintained in remote data centers dedicated to hosting various applications on multiple platforms.
Essential to Cloud ERP systems is a shared database maintained in remote data centers dedicated to hosting various applications on multiple platforms that supports multiple functions used by different business units and allows employees in different divisions to access and rely on the same information for their specific needs. And with Cloud ERP this is accomplished without requiring an extensive (and often expensive) on-premises server presence.
Unlike on-premises systems, cloud ERP which is a type of software as a service (SaaS) increases accessibility via the internet and enables users to share and transfer data across business departments, as well as externally, in real-time. Because it is cloud-hosted, businesses are notified of any updates to the software immediately. Cloud-based ERP also comes with availability, backup and disaster recovery plans from providers to reduce interruptions to the software.
Cloud ERP generally has much lower upfront costs, because computing resources are leased by the month rather than purchased outright and maintained on-premises. Cloud ERP also gives companies access to their business-critical applications at any time from any location.
The Cloud is particularly valuable to small and medium-sized businesses (SMB’s) because it provides access to full-function applications at a reasonable price without a substantial upfront expenditure for hardware and software. Using the right cloud provider, a company can rapidly scale its business productivity software as their business grows or a new company is added.
Cloud ERP Benefits
Today, more businesses are choosing to deploy ERP in the cloud than ever before. Here are 10 main cloud ERP benefits:
1. Rapid updates and upgrades:
Cloud ERP from Epicor offers instant and ongoing updates and upgrades to your ERP software and tools, so you never have to worry whether you’re using the most up-to-date technology to suit your business needs. You also don’t have to spend time updating—or hiring someone to update—your systems like you would if you used an on-premises ERP system.
2. Lower up-front and operating costs:
One of the biggest benefits offered by cloud ERP is that it’s much less expensive than traditional onsite ERP systems. When you deploy on-premises, you might pay for the software once by way of a license, but you have other costly expenses such as server purchase and ongoing maintenance, database creation and management, initial implementation, IT staffing, energy costs, and security and backup. With cloud ERP, you pay less upfront and your overall ongoing operating costs are much lower because the vendor takes care of updates, maintenance, and security for you.
3. Rapid implementation:
Cloud ERP can also get up and running in much less time than on-premises ERP systems. With on-premises ERP, you have to worry about things like selecting and purchasing hardware, training IT staff, potentially hiring more people, implementing new data security protocols, and ensuring that everyone on your team has reliable access to the tools they need to help you grow your business. With cloud ERP, deployment and implementation are fast and painless. Deploying your software in the cloud is also reliable and offers easy data access in real-time from anywhere—which can help make your entire team more collaborative and successful in their roles.
Cloud ERP is built to help you scale operations at your company. Cloud ERP allows your team and partners to access information on a global level. With cloud ERP from Epicor, you also benefit from world-class security and system monitoring that allows you to grow quickly without having to wonder whether or not your information is safe.
5. Focus on core competencies:
Because cloud ERP vendors take on most of the burden associated with managing a complex ERP system, you can spend time on what matters most—growing a sustainable, profitable operation. In other words, you get to focus on what you’re best at. When you don’t have to spend time worrying about software upgrades, downtime, and security issues, you get to spend time on areas that directly impact future business growth.
6. Improved accessibility, mobility, and usability:
Cloud ERP is better in these areas than other types of ERP deployments. Because your ERP system is managed in the cloud and global-ready, your team can access the tools they need from anywhere using their mobile phones and an Internet connection. Information is accessible in real-time, so key business decisions can be made without having to wait until everyone is in the same room or accessing your ERP system from the same place. In other words, it helps you build a more agile team. This focus on instant accessibility and improved collaboration helps boost productivity both inside and outside your enterprise.
7. Improved system availability and disaster recovery:
Data security is a very real concern for any team today that leverages the Internet to run their business. When you invest in cloud ERP, you put the responsibility on the shoulders of your vendor—and they ensure that your system is protected from potential attacks or vulnerabilities. Epicor invests in world-class infrastructure and security to keep your system protected and allow you to focus on other areas of your business that require your attention.
8. Cost transparency:
When you deploy cloud ERP systems, the cost is predictable and transparent. Either you pay a monthly subscription on the SaaS model, or you adhere to a pay-per-use model. In addition, there are no unexpected expenses relating to software updates and technology upgrades with cloud ERP, as they fall under the responsibility of your vendor.
9. Sales automation:
Sales automation is also optimized thanks to the global-readiness, real-time, and mobile access that comes with cloud ERP deployments. With cloud ERP, your partners, customers, and vendors can connect to your system seamlessly from anywhere in the world. Epicor Cloud ERP is highly reliable, and customers who deploy ERP through the cloud experience 99.5% or greater up-time.
10. Security standards and compliance:
As mentioned, cloud-based ERP vendors like Epicor have world-class security support and protection for customers. Epicor has a comprehensive, end-to-end security model. We build security into every layer of the ERP environment—and physical network interface cards, user passwords, and 24×7 system monitoring. A holistic approach to security lets us anticipate and minimize disruptions, giving you more up-time and better peace of mind.
Open Source ERP
An open-source ERP system is an enterprise resource planning system with publicly available source code. Companies can access the open-source code for free and customize the software themselves, rather than relying on the vendor. Most ERP solutions are proprietary or closed source, and customers can’t access the source code.
Open source ERP can be particularly attractive to small to mid-sized businesses (SMBs) that want to upgrade or customize their ERP systems without paying large licensing and support fees.
More than ever, businesses are relying on enterprise resource planning (ERP) systems to streamline their operations. From accounting to manufacturing to sales, the all-in-one solutions drive efficiency and collaboration. But for some businesses, the price tag of an ERP solution is simply too high.
Open-source ERP software is a cheaper alternative for many companies, especially small and medium-sized businesses (SMBs). It’s modular and flexible, allowing companies to only pay for the features and customization they need.
An Enterprise Resource Planning (ERP) project can be a major undertaking one that may be made or broken by an organization’s choice of the software that backs it up. A bespoke or custom-tailored software system would seem to be the ideal. But development costs can be prohibitively high.
Even with the best development team in the world (which would push the costs even higher), there’s little guarantee that the tools and requirements specified by an organization for the design of its ERP system will provide the perfect mix when the software itself rolls out. And commissioning amendments to a deficient or defective design will push prices even higher and push enterprise operations into an uncertain midpoint. Buying an ERP solution “off the shelf” can be a safer prospect, with a large market to choose from and perhaps the greater probability of accountability, availability, and support from established software vendors.
But licensing fees for proprietary software (and the software itself, for that matter) can take a huge bite out of your budget – especially if your business is diverse, widely dispersed, or has highly specialized needs that aren’t addressed by the generic feature sets of some off the shelf products, something of a predicament.
But there’s a third option which provides businesses with a better balance between customization, costs, and the manageability of their ERP systems: open-source software.
Benefits of Open-Source ERP
There are many reasons to choose open-source ERP software. Here are some of the benefits:
Vendor-Independence & Freedom from Licensing
The open-source software model bestows full licensing rights for a system to each user or organization that downloads and installs it. There’s typically nothing to pay for this – and no recurring fees for updates and renewals.
Open source ERP systems are coded and developed by a specific community – but that community can accept inputs from organizations and users across the globe. The inward-looking and exclusive attitude of “closed shop” proprietary software (which denies contributions to off the shelf product development to all but a company’s approved developers) doesn’t apply.
Neither do the restrictions imposed by the licensing policies of proprietary software vendors, which tie users into (often long-term) contracts with a particular manufacturer, on whose goodwill and continued viability as a commercial enterprise the software user has to rely upon.
ERP software isn’t cheap. Solutions generally cost between $75,000 and $750,000 for SMBs and $1 million to $10 million for larger companies. These high up-front costs can stop many companies from investing in technology.
Open-source ERP software can be a cost-effective alternative because customers don’t have to pay a license fee to access the source code. That means companies can install and customize the software for free.
Most ERP solutions have a broad range of features and modules that are included in their cost. On the other hand, open-source ERP systems come with only basic functionality. Companies can decide whether to add free modules or pay for proprietary features.
Reduced Cost of Ownership
“Free” and “low-cost” are terms often associated with the open-source model, and it’s true generally that an open-source ERP system will tend to be less capital-intensive than a bespoke or off the shelf solution.
Development, licensing, and software maintenance fees are largely eliminated, reducing an organization’s overall cost of ownership. Access to open-source operating systems, APIs (Application Programming Interfaces), and databases also contributes to this.
Community Development Resources
In addition to the source code of the core software, open-source ERP systems also give their users ready access to the often-vast resources of their user and development communities. This can include program modules to increase functionality, code snippets and routines to tweak performance or to perform specific functions, and the opportunity to share or trade ideas and resources with others in the community.
Discussion forums, feedback, industry news, and information on relevant developments in related ERP technologies also figure in this. And the open-source ERP community can serve as a talent pool for developers and operators who can assist enterprise users with their technical support or system maintenance needs.
“High-quality” and “low cost” are words that are seldom paired. But many low-cost open-source ERP solutions offer high-quality coding because they’re built on previous open-source projects that have been reviewed by various independent developers.
Your internal IT staff also has the ability to audit open-source code for quality. With closed source ERP solutions, IT employees can’t access the source code. They can only test whether software processes work correctly with business data.
More control over customization
When companies want to add customization to their ERP solution, they often have to work with the vendor, their internal IT team and even an external consultant. It can take time to coordinate between groups, and there can be miscommunications. And if the vendor decides it can’t develop particular customization, the company doesn’t have any other options.
With open-source ERP software, companies can create customization internally, without having to go through a vendor. Businesses also have access to ready-made or industry-specific features and modules created by user communities. This reduces the time and complexity of customization and gives companies more options.
Simpler to scale
One of the biggest challenges in selecting an ERP solution is considering future scalability. Many growing companies realize too late that upgrading their software or increasing the number of users requires costly re-implementation.
Open-source ERP is easier to scale and can be upgraded more frequently without disruptions. However, this is only the case when system customization are properly implemented.
You Can Customize & Modify at Will
Open-source projects also give their users and participants the right to modify and redistribute the underlying source code of their applications, at will. So, organizations using open source ERP systems can customize their platforms to meet the specific needs of their businesses – by making alterations to the program code themselves, adding modules obtained from the project’s development community, or by outsourcing development work to members of the project community.
Demo at your own pace
Companies that want to test out an ERP solution usually have to contact a vendor, request demos and set up a meeting. This process takes time, and the company will likely sit through a sales pitch.
On the other hand, companies can access open-source ERP code through a publicly available database and test the software without interacting with a vendor’s sales team. Although the solution won’t have customization at first, companies will be able to test it at their own speed and discretion.
Security, Updates & Maintenance
Users of proprietary software generally have to rely on the software manufacturer or vendor for upgrades, security patches, and system maintenance. Enterprise users, in particular, may find themselves bound by licensing conditions to wait on the pleasure of their software supplier for essential updates and security fixes. The problem is that these improvements are often dictated by market conditions and the corporate priorities of the manufacturer, rather than the individual needs of the user.
An open-source ERP system puts control of the update, maintenance, and security management aspects of a platform squarely in the hands of the user – who is at liberty to call upon their own in-house IT expertise, or the resources of the project community. This last point is particularly relevant, as open-source projects are noteworthy for the rapid pace at which program bugs or security issues are identified and corrected by members of the development community.
5 Differences Between Open Source and Closed Source Software
Looking for ERP for their companies, business owners often face a difficult choice between closed source and open source ERP. The thing is that the choice is not always obvious, as each of the ERP has its particularities with a mix of advantages and disadvantages.
In this article, we will get open source vs closed source explained and speak about their differences, but before it lets clarify what open source and closed source ERP are.
Open source ERP refers to the ERP which uses the code freely available on the Internet. The code can be copied, modified or deleted by other users and organizations. As the ERP is open to the public, the result is that it constantly updates, improves and expands as more people can work on its improvement.
Closed source ERP is opposite to Open source ERP and means the ERP which uses the proprietary and closely guarded code. Only the original authors of ERP can access, copy, and alter that ERP. In a case with closed source ERP, you are not purchasing the ERP but only pay to use it.
For better understanding the peculiarities of open source ERP and closed source ERP, we have made a comparison of five basic aspects: pricing, security, support, source availability, and usability.
Open source often referred to as a free of cost ERP. It can, however, have costs for extras like assistance, additional services or added functionality. Thus, you may still pay for a service with OPEN SOURCE ERP.
Closed source ERP is usually a paid ERP. The costs can vary depending on the complexity of the ERP. While the price can be higher, what you get is a better product, full support, functionality, and innovation. However, most companies provide free trials to convince the purchaser that their ERP is the right fit.
The question of security is very controversial as each ERP has two sides of the coin. The code of open source ERP can be viewed, shared and modified by the community, which means anyone can fix, upgrade and test the broken code. The bugs are fixed quickly, and the code is checked thoroughly after each release. However, because of availability, the source code is open for hackers to practice on.
On the contrary, closed source ERP can be fixed only by a vendor. If something goes wrong with the ERP, you send a request and wait for the answer from the support team. Solving the problem can take much longer than compared to Open Source ERP.
When it comes to choosing the most secure ERP, the answer is that each of them has its pros and cons. Thus, it is often a challenge for firms that work in a particular industry.
Quality of Support
Comparing open source and closed source ERP support, it is obvious that closed source ERP is predominant in this case. The costs for it include an option to contact support and get it in one business day in most cases. The response is well organized and documented.
For open source ERP, such an option is not provided. The only support options are forums, useful articles, and a hired expert. However, it is not surprising that using such kind of service you will not receive a high level of response.
Source Code Availability
Open source ERP provides an ability to change the source code without any restrictions. Individual users can develop what they want and get benefits from innovation developed by others within the user community. As the source code is easily accessible, it enables the ERP developers to improve the already existing programs.
Closed source ERP is more restricted than open-source ERP because the source code cannot be changed or viewed. However, such limitation is what may contribute to closed source ERP security and reliability.
Usability is a painful subject of open source ERP. User guides are written for developers rather than to layperson users. Also, these manuals are failing to conform to the standards and structure.
For closed source, ERP usability is one of the merits. Documentation is usually well-written and contains detailed instructions.