What is Cloud ERP?

So you’re thinking about cloud computing but aren’t up with all the current buzzwords and basic concepts ? Our support friends at KISS (UK) Ltd created a short “guide for novices” to Cloud ERP which is also a great help for all things cloud, so I’ve pinched it for our first blog as a good place to start for the less technically minded readers amongst us …

What is Cloud ERP?

The term “Cloud ERP” needs breaking down if we are to understand the simple essence of what it is about, so let’s start by doing just that …

CLOUD

To be honest, CLOUD is a pretty odd buzz word for a really great idea.

Mostly the word conjures negative thoughts, (think “clouds on the horizon”), but don’t let this cloud your judgement as every cloud has a silver lining .

Take all the nasty things you don’t want to think about (security, servers, networks, bandwidth, programs, updates and backups), put them all in a box and give it to someone else to look after. Whether that box is put in a secure data centre or held at your own premises, you then access the information you want from wherever you are on whatever device you like working with. Basically that’s what cloud computing is, and those of us in the know often use it for ERP.

ERP (or Enterprise Resource Planning)

This supercedes MRP (Materials or Manufacturing Resource Planning), which was all about making sure enough bits were available to make the stuff you wanted to sell. MRP II added making sure enough people and machine time was available to make stuff with all the bits. ERP extends that to the whole company and typically now includes accounting, HR, customer management, support and pretty much everything you do.

A great example is booking a meeting room. The room is the resource, booking and reserving it for a meeting is resource planning and doing so in a single place for the whole company is enterprise resource planning.

CLOUD ERP is doing this 24/7 for anyone and everyone who needs to be involved using any device they choose. We, like many others, believe the best way to do this is with Web Services.

WEB SERVICES

Now this is the bit that is causing some consternation, but really its very simple and nothing to be worried about.

Remember that computers work in absolutes – black and white, on and off, one and zero. This is because they work on a two state code – binary. We on the other hand work on a four state code (some might even say five) – DNA. This means we see the shades of grey between black and white and work with concepts and ideas and non-absolutes. The ones and zeros computers work on can’t do these things, and should be viewed as simple digital ink.

Using a robust network computers can now talk to each other and do stuff we tell them to do with this digital ink. That robust  network is the internet, the stuff they do is web services. The benefit to us is more boring things getting done faster and more accurately for less cost. In terms of cost, the cloud way of doing things is often to use SaaS.

What is SaaS

Software as a Service (Saas) is about charging for use rather than buying outright. Rates are worked out on the computing power “consumed” rather than a cost per user, so you can have as many people as you like on board. The best way I’ve found of thinking about this is to compare it, believe it or not, to a bus. A single decker bus costs less to buy, run and maintain than a double-decker bus and has a smaller engine using less fuel. Both can carry hundreds of passengers a week without issue, but the double-decker, with its bigger engine burning more fuel carries significantly more passengers per trip.

This is the essence of charging for computing power and there are very few software providers out there at present who make their programs available in this way, although the virtual computers these programs run on, and the companies that provide those, do.

Of course cloud computing is more than just software, so watch out for IaaS (Infrastructure as a Service) and PaaS (Platform as a Service) too. Using our analogy of a bus, IaaS is where someone else builds and maintains the physical bus for you, PaaS is where you’re given the tools to create your own routes and other services (such as including a tour guide on each trip), leaving SaaS to be viewed as the end result of having a driver for the bus and a conductor to collect the money.

Why Should I Care ?

Blame it on Amazon, iTunes and Facebook if you like. These cloud applications have educated the current (and next) generation of customer to expect something different from you as a supplier. The next generation of employees also expect a more “joined up” way of working using a wider range of tools, often of personal choice. Cloud computing, as the loose concept described above outlines, is the only mechanism supplying this. You can create private clouds, public clouds and closed group clouds, but the simple fact remains – you’re accessing data and contributing to systems using a remote device over a robust network without the limits of past technologies, and it isn’t just us saying so …

Things to Watch Out For

In my opinion too much time is wasted trying to make the digital world more like the real one, and make those of us in the real world think digitally. This is pointless as we are meant to deal with different things so let’s stop – let computers be computers and us be us.

Many cloud “solution” providers are actually only offering a part of what can be done, so be careful about walking up blind alleys – it always hurts and costs in the end. A good example is “cloud accounting” – your business is more than just a set of books, so why should your investment in cloud computing be just about accounts (or payroll, email or anything else for that matter) ?