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Prepared by: - Michael Wondemu

IdNo:- GSR323/12
ERP Enterprise Resource Planning
TCO Total Cost of Ownership
Literature review about cloud-ERP
I wrote the following report on the basis of the two articles I read and reviewed for the ERP in the
Cloud – Benefits and Challenges and cloud - ERP: implementation strategies, benefits and

ERP in the Cloud - Benefits and Challenges Cloud (Lenart, 2011) is discussed by various
researchers. They focus on analyzed the benefits and challenges of Cloud ERP in the SaaS model.
Firstly, SaaS as a business model of cloud computing is described. The issues concerning
traditional and Cloud ERP are also discussed. Nowadays organizations have three ERP system
deployment scenarios. An organization has the option of purchasing a license or a SaaS ERP
solution. When a license is purchased, it can deploy the legacy ERP system in its own data center
(on-premise) or can outsource operations to an external provider (hosting off-site). ( VFSTR,
Andhra Pradesh, 2018) An Indian, Assistant Professor, VFSTR, Andhra Pradesh, was trying to
investigate the introduction of Cloud ERP adoption by identifying its benefits and drawbacks. The
importance and the significance of the research is in the company led to greater demand for ERP
software. According to Cloud-based ERP marketing, adoption is less likely to be adopted.
Investments can grow faster, as well as service provided by the cloud.

( VFSTR, Andhra Pradesh, 2018) Benefits vary when organizations use cloud-only or cloud with
web-based software. The benefits of the cloud are only: Scalability, paying for use and reducing
IT cost. Cloud web based software uses additional advantages: SaaS is ready, easy to access, client
software, real time data, faster, simplified remote access, handling, and platform compatibility.
Advantages of SaaS: Less upfront fees, faster installation and less maintenance hassle. When
running as a SaaS in a web-based ERP system cloud, the company receives three models with a

The main benefits of Cloud ERP, according to an Institute of Management Accountants (IMA)
survey, one of the largest cloud based ERP surveys (around 800 responses) (Turner, 2011), are
(Fig. 1): lower total cost of ownership TCO (30%), data access anytime and anywhere (28%),
streamlines business process (21%), easy upgrades (9%), lower capacity requirements (7%) and
speed of deployment (5%). The cloud concept allows a reduction in IT outlay while at the same
time increasing its efficiency. The user needs only a personal computer and secure Internet access.
Figure 1: Benefits of cloud ERP

According to their study (Turner, 2011) the main problems of cloud based ERP are security (35%),
customization (18%), reliability versus an in-house (14%), ownership of data (12%), no substantial
concerns (9%), maturity versus on-premise (8%) and ownership of application (4%).

Figure 2: problems of cloud ERP]

As a conclusions (Lenart, 2011) Software as a service uses a cloud, which provides the computing
power to run the solution, but it is not a cloud itself. It is, however, the most popular delivery
model of cloud computing. A cloud is a less flexible but most cost-efficient method of
implementing on-premise or on-demand ERP solutions. ( VFSTR, Andhra Pradesh,
2018)Understanding the strategies and challenges, Cloud ERP companies can be successfully
implemented for their business applications.

In our country, there is no having an online payment for using an ERP in cloud, but the benefits of having
an ERP in cloud are one of the advantages in the future as well as in the rest of the country. So I agree with
the authors' opinion.

Finally, I believe that if there is another type of payment system in countries (like Ethiopia) where ERP in
cloud online payment systems does not exist, it would increase the reach and benefit of ERP.


AND CHALLENGES. Associate Professor, Department of CSE, SVCET, Pondicherry
University, India, 1359-1364.

Lenart, A. (2011). ERP in the Cloud – Benefits and Challenges. University of Gdansk, Department of
Business Informatics, Sopot, Poland, 40-50.

Turner, P. (2011, November 14). The IMA Survey Results Are in - What the Cloud Means to Finance,.
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