What is cloud-based ERP software?

Cloud-based ERP software has taken the world by storm but what is it exactly? And why is it so popular? Read our short guide to find out.
October 21, 2022
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5-min read

Cloud computing has been around for decades. However, it's only in recent years that it has truly taken the world by storm thanks to the advent of remote working. This is particularly true for cloud-based software, which lets multiple users use software applications via the internet. Because these cloud applications run on shared computing resources, users can access them from any device as long as they are granted access - just the thing for when you're working from home.

With remote working expected to become even more popular in the next few years, it looks like cloud-based software is here to stay. In fact, more and more business owners are managing their entire companies from a cloud-based solution. Let's see how:

The basics of cloud-based ERP software

Unless you manage all your business operations with pen and paper, chances are that you will have heard about ERP software. In a nutshell, ERP stands for Enterprise Resource Planning and is a kind of software that integrates every single business process into one single solution. That means that you can handle everything from accounting to stock management from just one platform.

ERPs have played a big role in business management since the 1990s. Back then, ERPs relied on an on-premises network and had to be individually installed on every single company computer. Fortunately, those days are in the past now - and it's all thanks to cloud computing.

Unlike on-premises ERPs, cloud-based ERP software is a kind of Software-as-a-Service (SaaS) that runs on a vendor's cloud platform. This means that every single user can access it from any device, anywhere in the world. It really is no surprise that demand for cloud-based ERP software is higher than ever. Put simply, cloud-based ERPs are a reflection of modern working environments. Like our current working arrangements, cloud ERPs are highly flexible and available, allowing for better connection at all times.

That being said, on-premises ERPs refuse to go out without a fight. In fact, many small and medium businesses still use them instead of cloud-based ERP software. But why? And which kind of ERP is better?

To answer those questions, let's draw a few comparisons between both kinds of ERPs.

On-premises ERPs vs cloud-based ERPs - what are the main differences?

Before you decide which ERP to purchase, there a few things that you need to take into consideration - such as infrastructure, updates, integrations, storage and security. Let's have a look at the main differences between on-premises and cloud-based ERPs so you can decide for yourself:


Like most SaaS applications, cloud-based ERPs are usually available on a monthly or annual subscription basis that includes maintenance, updates and support. This makes cloud ERPs an operating expenditure - meaning it is an essential and recurrent payment that you need to make to ensure that your business runs normally.

Things are different with an on-premises ERP. Unlike with cloud-based software, you'll pay a significant upfront fee to purchase the software licence in one go instead of paying for a monthly subscription. Unfortunately, that licence won't include support and updates - meaning you'll still have to make a recurrent investment to supplement your initial purchase.

Implementation speed

If you decide to go with an on-premises ERP, you'll have to install it individually on every company device. As you can imagine, this can take a long time. Unfortunately, it is the same story when it comes to system updates - they'll have to be downloaded and installed on every single computer. Because of this, recurrent downtime can be an issue when working with on-premises ERPs.

Fortunately, all those implementation worries have become a thing of the past with cloud-based ERP software. Because the software is located in the cloud instead of physically stored in each device, it'll be immediately available for all your users from the moment your IT administrator finishes setting it up in your shared cloud location. And the same goes for any system updates.


The received wisdom around on-premises software is that it's safer than cloud-based software. Well, the received wisdom is wrong. Firstly, on-premises ERP systems are just as liable to be attacked by hackers as a cloud-based solution. Secondly, on-premises ERPs come with an extra risk - data loss in the case of hardware failure.

When it comes to security, the main difference between on-premises and cloud-based ERPs is disaster recovery. From recurrent backups to data encryption, a full-service cloud ERP will always include a wide array of features that guarantee business continuity. That way, your data will always be safe even in the case of a system breakdown or a successful cyber-attack.

Data accessibility

One of the biggest challenges of having a remote workforce is ensuring that all your data is easily accessible from any location. From sales and accounting numbers to stock management lists and customer details, the amount of data needed to manage a business effectively is simply overwhelming. And yet you need to access all this data on a daily basis and in real time. How else are you supposed to make smart, evidence-driven business decisions?

Fortunately, there is a way to gain easy access to high volumes of real-time data - and that is having cloud-based ERP software. By bridging several silos of essential information in one single platform, a cloud-based ERP will make accessing key data a lot faster. And because you can use your ERP from any internet-connected device, anyone in your company will be able to access real-time data from any location.

Cloud-based ERP software that ticks all the boxes

Want cloud-based ERP software that allows you to access real-time data and manage your business effectively from a single platform? Look no further than Profit4. With customisable finance dashboards, real-time stock management features and seamless eCommerce integration, Profit4 includes a true arsenal of features that will take your company to the next level.

If you want to see what Profit4 can do for your business, watch our online demo today...

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