Cloud ERP refers to Enterprise Resource Planning software that is hosted on remote servers and accessed via the internet rather than installed on local company computers. Instead of purchasing servers, maintaining IT infrastructure, and installing software updates yourself, cloud ERP operates on a subscription model where the vendor handles all technical maintenance, security, backups, and upgrades whilst you access the system through a web browser or mobile app.
The cloud delivery model fundamentally changes how manufacturers implement and use ERP systems. Traditional on-premise ERP required substantial upfront capital investment in hardware and software licences, lengthy implementation projects, and ongoing IT staff to manage servers, apply updates, and troubleshoot technical issues. Cloud ERP converts these capital expenses into predictable monthly operating expenses, with costs scaling based on the number of users and modules you need. Implementations are typically faster because there’s no hardware to procure or configure, and updates happen automatically in the background without disrupting operations.
For manufacturers, cloud ERP offers several practical advantages. Remote access means sales teams can check inventory and create quotes from customer sites, production managers can monitor shop floor performance from home, and management can view dashboards from anywhere. Multi-site manufacturers benefit from centralised data across locations without complex networking between facilities. Integration with other cloud services (e-commerce platforms, customer portals, supplier systems) is generally easier through modern APIs. Small to mid-sized manufacturers can access enterprise-grade functionality previously only affordable for large corporations.
However, cloud ERP requires reliable internet connectivity, as you cannot access your system if your connection fails. Data security and compliance become shared responsibilities between you and the vendor, making vendor selection critical. Some manufacturers in highly regulated industries or those with sensitive intellectual property prefer keeping data on-premise for control reasons. Modern cloud ERP platforms address these concerns with redundant connections, robust security certifications, and options for hybrid deployments where sensitive data remains on-premise whilst other functions run in the cloud. The trend is clear though, with most new ERP implementations choosing cloud deployment for its flexibility, scalability, and lower total cost of ownership.
