ERP Cloud and digital transformation: intelligence at the service of companies!
Efficient, economical and perfectly secure, an ERP Cloud automates business processes to optimize corporate governance. This digitization affects all areas, from R&D to production, including purchasing, sales, finance, HR and services. Thanks to these mobile and intelligent information systems, SMEs/SMIs gain in productivity, flexibility, agility and reliability [1].
Need to know a little more? Let’s go through these few paragraphs together to discover the advantages and functionalities of ERP Cloud, SaaS application, multi-tenant solution, public or private cloud, without forgetting the data security aspect. So, good (re)discovery!
1, Cloud ERP solution: terminology, definitions and concepts!
To better understand the issues and choose the ideal solution, it is important to understand the vocabulary specific to management solutions such as “on-premise” or “on-demand” ERP, cloud computing, ERP Cloud, as well as SaaS and multi-tenant architecture Let’s zoom in on the key concepts of an ERP Cloud.
What is ERP software?
The acronym ERP comes from the English name “Enterprise Resource Planning”. The equivalent name in French is “Progiciel de Gestion Intégré” or PGI. The ERP (PGI) is a computerized tool for management and management of the company in real time. It integrates several modules that communicate with each other and functions that automate the management of data flow from all of a company’s departments: inventory, production, accounting, HR, orders, payments, quotes, customer relations (CRM) , etc. Added in the form of extensions (add-on), these modules and functions adapt the ERP to the business model of the company.
What is Cloud Computing?
The Cloud is a pictogram used to symbolize the internet network on technical drawings. The definition of cloud computing can be stated as an on-demand use of hardware and software computing resources, ubiquitous on the internet. Data storage is now done on a data center and not on the local hard drive (on-premise model). In addition, the hosting and maintenance of these self-service IT resources are no longer the responsibility of the user, but of the service provider offering this service.
It is a real IT revolution called “shared” and “connected”, thus freeing the company from the efforts necessary for the maintainability of its information system.
Cloud Computing has three levels of services depending on the degree of outsourcing of IT management and maintenance.
For the classic model (on-premise), the company is responsible for the proper functioning of the computer server and the applications installed on it. In the case of cloud computing, the company discharges some, if not all, of these management and maintenance operations. Depending on the level of discharge (outsourcing), three layers of services are offered by the service provider.
a, To. Infrastructure as a Service (IaaS)
By subscribing to the basic IaaS service, the service provider provides you with an IT infrastructure: servers, storage space, bandwidth, virtualization and data center security. However, you retain control over the operating systems and applications you want to use. This solution is aimed more at companies that have a team of IT system administrators.
b, Platform as a Service (PaaS)
This service is more elaborate and richer than the basic version. The provider not only provides you with hardware resources, but also a development environment with integration and monitoring tools, such as an operating system, web server, database management, middleware (middleware) and decision support services. The PaaS service is ideal for companies that want to develop their own web applications, while offloading the configuration and management aspects of the IT infrastructure.
c, Software as a Service (SaaS)
It is the “Premium all inclusive” service that offers users turnkey software applications from the cloud. Indeed, the service provider takes care of all the installation and maintenance operations of the computer system, including the applications used by the company. The SaaS service is very suitable for SME/SMI equipment, because identified users access applications using a simple web browser. For example, Facebook and Netflix are a perfect illustration of how a cloud based on SaaS architecture.
d, The different cloud services
What are the characteristics of a Cloud ERP?
Now that you know what an ERP and the cloud are, the meaning of their combination becomes more intuitive. Indeed, an ERP Cloud is “just” a company’s business process management application, an application hosted on the cloud and accessible at any time on the Internet. However, this cloud management solution has several characteristics that distinguish it from the “on-premise” model or traditional hosting on a server. In a study conducted by Deloitte on behalf of AFDEL (renamed Tech In France) and Groupe Caisse des Dépôts [2], the five specificities of cloud-based applications are:
Pooling
In a cloud, hardware and software resources are pooled through virtualization. Sharing these IT resources optimizes costs and reduces investments.
Immediate elasticity
To adapt the computing capacity to the workload, the allocation of hardware resources has an elasticity which makes it possible to maintain the same level of performance.
Multi-rental
One of the essential characteristics of cloud-based applications remains the multi-tenant architecture, detailed a little later and which is similar to the colocation of IT resources.
Access ubiquity
Much appreciated nowadays, the ERP Cloud is a mobile application, accessible anywhere connected to the internet and on all types of screen (PC-Mac, smartphone, tablet or smart TV).
Pay-as-you-go
The payment method remains flexible, favoring usage-based pricing for greater cost control.
2, Why choose a Cloud ERP in SaaS mode?
Modern and competitive, the company of tomorrow relies on the personalized and interactive ERP Cloud to meet the new challenges of digital transformation 3.0 [3]. Today, a technological tsunami is looming on the horizon, due to a rapid and profound change in post-Covid-19 consumption habits, as well as an increasingly greater connectivity of the objects that surround us.
To give an overview, the research firm Gartner has estimated the number of connected objects at 20 billion in 2020 [4] and IDATE DigiWorld estimates it at 36 billion at the dawn of the year 2030 [5]. Companies are at a turning point in their history and have the choice between quickly adopting mobile and outsourced IT solutions or resisting inevitable change. Currently, SMEs are already struggling to manage their IT system on their own in terms of security, equipment, deployment of solutions and maintenance. It is wiser to focus on your core business and delegate DSI functions to a service provider capable of offering them the Cloud ERP of tomorrow.
Among the different cloud computing service levels, the SaaS mode is the one that most appeals to SMEs, even large accounts. The reasons for adopting ERP in SaaS mode can be summarized in four essential points which are: optimization of investments, cost reduction, flexibility and agility of solutions, as well as “freedom”. rediscovered professions [2]. But despite this enthusiasm for ERP based on SaaS architecture, some companies are still displaying an understandable caution with regard to the Cloud, in relation to security or operational continuity requirements.
3, What are the advantages of Cloud ERPs?
According to a study published in March 2020 and carried out by Coleman Parkes on behalf of Boomi [6], 57% of European companies surveyed plan to completely migrate their ERP to the cloud within a year. In addition, the deployment of an ERP Cloud is a priority for 71% of them. These figures are the result of a tangible perception of the main advantages of ERP Cloud by general managers and financial directors of companies. Compared to the on-site model, ERP Cloud in SaaS mode offers greater opportunities, particularly for young companies and SMEs/SMIs, with a myriad of advantages such as: infrastructure flexibility, mobility, profitability, controlled costs, time saving, scalability and ease of updates [7].
4, What are the advantages of multi-tenant cloud ERPs?
The multi-tenant type software architecture is a key element of Cloud solutions. Its principle is based on transparent and independent use of the same instance (virtual server, application, etc.) by several customers (tenants). For example, Google Drive is a multi-tenant application that creates separate virtual environments for each user.
The main advantage of the multi-tenant model is the centralization of management and maintenance operations that are performed on the same instance for all users. The publisher is thus focusing on the development of new functionalities and no longer on the maintenance of the different versions of its application. Similarly, the changes requested by a company benefit all the supporters. Thus, the operating costs of the multi-tenant mode are lower than those of the single-tenant. All of these benefits carry over to the services offered to enterprises in terms of pricing, security, privacy and scalability.
5, What types of Cloud ERP are there on the market?
The basic principle of the cloud remains the pooling of resources in order to reduce costs and optimize investments. However, for their own reasons, companies sometimes opt for some level of cloud accessibility. The different usage and access models have spawned 3 types of cloud computing: public, private and hybrid. Note that the old differentiation rules relating to the location and ownership of physical infrastructure have become obsolete.
Public cloud: more power at lower cost
Any cloud whose environment has partitions intended to be redistributed among multiple customers is a public cloud. Through groups of interconnected servers (clusters), the public cloud allows a large number of customers to have self-service access to a pool of networked computing resources. The economic model of the public Cloud remains very attractive for SMEs/SMIs who prefer to minimize their IT budget and invest in their core business. Public cloud providers are numerous, but the best known of them are Alibaba Cloud, Amazon Web Services, Google Cloud Platform and Microsoft Azure, not to mention the French OVH.
Private cloud: more control and security
Any cloud whose underlying computing infrastructure is dedicated to an end user, with fully isolated access, is a private cloud. Depending on the needs of the company and its IT skills, different subtypes of private cloud exist: internal, managed, hosted or community. Apart from the level of accessibility, the private cloud has the advantages of cloud computing, but with additional options for control and customization. However, operating a private cloud is more expensive than operating a public cloud.
Hybrid cloud: the best compromise
A hybrid cloud is a computer system whose software solutions can migrate between several isolated environments, but which remain connected. This model combines the advantages of the two previous types of cloud, but has greater versatility. Indeed, its hybrid nature allows it to support any workload carried out in any type of environment (development or operation). For example, a company can keep its sensitive data in a private cloud (its ERP Cloud solution), but relocate the rest of the data and all of its applications to a public cloud (e-commerce site / CMS).
6, Are Cloud ERPs secure?
Security is one of the main aspects that hinders a company from adopting a Cloud ERP. Security vulnerabilities can be the cause of a data leak, a threat to the system or unauthorized access due to account theft. To enhance security, data is always encrypted (AES 256-bit algorithm) and identification processes reinforced (password complexity and two-factor authentication). However, threats can be more sophisticated with malware that performs targeted and persistent attacks (APT). Fortunately, security standards, regulations and control structures exist through the CCM (Cloud Control Matrix) to analyze the risks incurred by a cloud. But the most skeptical can opt for private or hybrid clouds to isolate their sensitive data.
As a conclusion !
Managing your business without ERP software is like flying a plane on sight, without navigation instruments! Indeed, the ERP guides and directs management on strategic and operational plans by providing management and performance indicators, transparent reporting, as well as immediate information on incidents. Nowadays, companies compete and win thanks to the technological innovation deployed to modernize their ERP by… migrating it to the cloud!