Cloud-Based ERP Software – scalability, security & Innovation

As reported by Hubspot, in an international survey, out of all ERP users, 64% of the companies use SaaS, 21% use cloud-ERP, and 15% use on-premise software. This gives a very clear picture, of how rapidly ERP software is updating and growing globally. Cloud ERP has grown massively over the last few years and is expected to grow even higher in the coming days. Indeed, on-premise software is still in the market, but the expansion of the cloud version is making the news.

There are multiple reasons for shifting from on-premise to cloud-based ERP software and one of the major reasons is that it is easy to use and less expensive compared to on-premise. Moreover, with the world going wireless everywhere, on-premise software requires too many hardware components, which could be seen as a problem after the introduction of the cloud version.

Scalability in Cloud ERP System

When we talk about the scalability of cloud ERP, we are agreeing to the fact that cloud ERP has become highly successful in the business ecology due to its series of features that help in the growth of any size of business.

In recent times, the business world is rapidly changing and expanding at a breathtaking rate. So, to assist this transformation, a business must choose a system that could support its flexible nature and keep the overall operation organized.

What is Scalability in Cloud ERP?
Let us understand the concept of scalability in cloud computing before we talk about ERP. Scalability in cloud computing is the magnifying or diminishing of IT resources as per user requirements. The popularity of cloud ERP has increased mostly because of its ability to scale as per business needs.

Software configurations like data storage security and processing power are supervised by cloud scalability. The most noticeable factor is that scaling cloud ERP software will not hamper the ongoing business operation or cause any application downtime. Thus, it is the best way for optimizing the system performance as per business requirements and demands.

When is a Cloud ERP called Scalable?
Now make a small comparison in terms of scalability between on-premise and cloud ERP software. The cloud ERP system is highly scalable due to the virtualization of software components, which makes it compatible to scale up or down the system configurations. In cloud ERP software, multiple virtual machines (VMs) are hosted on different servers or they can be moved to different servers as needed to increase efficiency.

Is cloud-based ERP software more secure than on-premise ERP software?

In the latest report (add rel=nofollow tag)by Verizon, 2022 saw 82% of data breaches were due to human element, which is caused either by social attacks, errors, or misuse of information.

From this, it can be very well understood how important the security level should be to protect data from getting breached. Now, talking about ERP, this data is one of the most sensitive data for any organization as the total business operations are dependent on this.

Henceforth, data security is becoming one of the major concerns and employers are doing their bit in establishing the security system and identifying the threat. Everybody knows how important the data is and what could be the consequences if it gets exposed.

The comparison

It is important to recognize the responsibility model for security while shifting from on-premise to cloud ERP software. To make it sound simple, the security of cloud ERP is not only the responsibility of the vendors but also of the customers. Although cloud ERP comes with an advanced level of security, it is still the responsibility of the customers to handle the data with the utmost care, just like they would have done if they were using an on-premise system for the applications. In most cases on-premise ERP is highly customized hence, companies might get introduced to a lot of security risks and functionality extension that requires monitoring and control.

Here are some of the security benefits that cloud ERP software provides to its customers

  • Advanced encryption and compliance – Cloud-based ERP software makes sure that the data is encrypted during transit and resting state as well. This high-level security confirms the management of the system and the data. This software comes with tools that use the HTTPS protocol in dealing with web traffic and very secure SDKs in implementing encryption for applications and default encryption for data.
  • Automated Updates – SaaS is the latest upgrade in the ERP structure. One of the many reasons why businesses opt for cloud software is because of the automation in the upgrade to the latest feature. The company does not have to ask the management for giving access to the upgrades. The upgrades are important as any delay in those could be a fortune for the hackers and also the data might get prone to other cloud ERP risks. The automated upgrades are involved in the subscription costs, they also ensure updated functionality and address any concerns related to the cloud ERP security.
  • DoS attacks – Cloud-based ERP software is a step ahead when it comes to DoS (Denial of Service) attacks. The attack occurs when legitimate users are prevented from accessing the service by releasing unwanted requests to overload the system and stop legitimate requests from getting fulfilled. Cloud ERP runs on data that has distributed data centers across the world, providing the appropriate defense against DoS attacks. Moreover, cloud providers have a team of dedicated personnel who are assigned to handle such attacks and thereby solve them in a much quicker time and at scale.

Do you know innovation in cloud ERP can have a major impact on the business?

As reported by Mckinsey, 84% of the CEOs believe that innovation is needed to grow in the market. The business world in today’s time is evolving at a rapid pace and technological innovation pushes the business to move even faster.

The market is highly competitive and those who could not keep up with the time and pace falls behind and eventually perishes. To grow, they need to generate opportunities and deal with the ever-changing market conditions.

In simple words, businesses need to innovate and adapt to the changing pace to take on the challenges in the market.

An updated IT structure is much in need to keep up with the enhanced technological world that is arriving. A cloud-based ERP software is perhaps the solution to it. It ensures that the business is updated with the financial and operational data and has access to all the applications available. This increases the efficiency of operations and helps to innovate and transform with time.

Cloud ERP innovations

  • Flexibility – A flexible business model is an answer to a growing business, as every enterprise needs to grow with time. They need to update their IT structure to stay with the changing times. In the case of ERP, businesses cannot rely on their traditional ERP software which is not at all flexible. Instead, businesses should shift to cloud-based ERP software which is flexible and ensure fast configuration to support business transformation.
  • Scalability – Commonly, that cloud ERP software offers scalability to the business. Which means that it can adapt to the changing time and technology in the future. It however also can extend the business, meaning, anything can be added to the software in the future that could result in growth.
  • Real-time monitoring – With the arrival of globalization in the market, businesses now do not have any geographical barriers. So, it is important to monitor all the business happenings in real-time. A cloud-based software in the ERP industry enables business owners to manage all operations in real time and from any location at any time.


Cloud ERP software has the potential to take a business to newer heights with its ability to scale, secure and let the business innovate by being extremely flexible. Moreover, with the installation of a cloud system, the workload also gets distributed which gives the businesses more time to focus on their business operations and functionalities.

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