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Cloud-based ERP has a lot to offer small and medium-sized businesses (SMBs). Its relative ease of migration, combined with the control and maintenance afforded by a hosted system, makes it especially appealing to companies that need a fast ERP implementation that won't break the bank.
Colfax, North Carolina-based Quantum Group, a producer of high-quality custom fabrics, is a prime example of what cloud ERP can do for an SMB. The manufacturer needed an ERP platform that could be easily accessible from any location without the expense and challenge of installing and maintaining client software. To further complicate things, Quantum Group's network was comprised of seven companies in three different locations. Eventually, the silver bullet was found in the cloud ERP system from Acumatica.
"The process of moving our data to the new Acumatica system was straightforward; in just 30 days we were up and running," said Barbara Page, controller at Quantum Group.
Security concerns for cloud ERP
While Quantum Group's success story is an example of cloud ERP done right, it's important for customers that are new to hosted services to carefully examine the security of any cloud-based ERP application being considered, experts say. With all that migrated data in someone else's hands, its protection depends upon the security of that vendor.
This may be a minus for some users, as the customer may have little control over how their data is managed and secured. However, it may also be a plus, as the application provider of the cloud system may have more robust security measures and more resources to apply to security threats than a mid-level manufacturer or equivalent client.
"In an on-premises situation, one would have control over every detail of security. That can lead to loopholes being developed if the IT team isn't up to par and if they aren't able to dedicate most of their time to data security," said Pat Garrehy, CEO of Rootstock Software in San Ramon, California. "With a cloud system, they are making the investment in developing a top IT team that is dedicating all of their time to keeping your data stored on their system secure."
Customer-supplier relationships and vendor trust play critical roles here, he added. The customer must evaluate the fitness of the supplier's cloud-based ERP application and determine if it will measure up to the confidence level required for their data and operations. This involves some measure of trust.
"The state of cloud security today differs when you're talking software as a service (SaaS) versus infrastructure as a service (IaaS) -- Amazon Web Services and Rackspace, for example," explained Dave Frymier, CISO at Blue Bell, Pennsylvania-based IT services company Unisys.
"Ultimately, providers are interested in keeping their costs low and their flexibility high, which creates tension with customers who want to know where their data is and who has access to it," he added. "With SaaS, customers have to trust the vendor and have no recourse other than to cover themselves with paper and work security necessities in their Terms and Conditions contracts. With IaaS, customers have a lot of control over the virtual machine they buy from a vendor and can use encryption techniques to protect their data from vendor personnel."
Cloud-based ERP trends
Experts predict that deployments of cloud-based ERP applications to mobile devices for use in a distributed manufacturing environment will grow in coming years. This approach is becoming more popular as SMB manufacturers embrace mobile workers and communication with a central application for local work.
One example of a vendor that is riding this cloud deployment wave is Exact, a business applications provider for SMB manufacturing and distribution companies. Exact recently released MAX Anywhere, a Web-based system that makes Exact MAX ERP features accessible from any device with an internet connection.
The application takes mobile ERP technology to the next level by allowing users to execute real-time transactions through a Web-enabled device. Companies can streamline their order to build to ship process and gain a significant edge over their competition, resulting in a more efficient operation and higher profits. It allows users to enter quotes, conduct material and shop transactions, such as receiving Payment orders, shipping sales orders and posting scrap. The company professes that its transactions are conducted via a secure connection to serve customers' demands for both mobility and security.
About the author:
Jim Romeo is a freelance writer based in Chesapeake, Virginia.
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