A company is evaluating ERP systems to replace their dated system that has been

Question

A company is evaluating ERP systems to replace their dated system that has been running for the past 10 years. Before the company begins to look at individual systems, the accounting team would like an analysis of the following three questions. Use citations where appropriate.

REQUIRED:

1. What are the pros and cons of using a cloud-based service (i.e. NetSuite, Intacct, Financial Force, Acumatica)?

2. What are the benefits and drawbacks of upgrading an existing server and staying with an on-premise system (i.e. not cloud based)?

3. You should perform a basic analysis of the cash flow necessary for each option.

Explanation / Answer

1. Data Cloud is the remote storage space where large quantity of data is stored, which can be accessed through Internet for analysis. Cloud computing is basically the integration and implementation of all computing systems on the Internet. Here the Internet is considered as the Cloud. The various systems integrated can be servers, databases, software as well as analytics.

The primary characteristics of cloud computing are:

Let’s understand the application of cloud computing through an example:

Software as a Service or SAAS is a software distribution model, which is a type of cloud computing. The software is distributed or licensed to the host on subscription basis. The platform is centrally hosted and the host gets the access to the software through a web browser. It runs on the cloud and does not need any infrastructural modifications in the host company.

SAAS has the following advantages:

The benefits of using a cloud-based service:

The disadvantages of using cloud-based service:

2. The benefits of using the on-premise system:

The drawbacks of the on-premise system:

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