ERP solutions create the technical basis for Industry 4.0 and cloud computing opens up new avenues. If companies decide to use ERP in the cloud, the first step is to decide on the optimal cloud approach. The standardized SaaS (Software as a Service) solution is ideal as an entry-level solution, for example, or for companies in a development or modernization phase.

Hosting, on the other hand, involves migrating the company's own existing application to the cloud. The ERP can also be operated as a mixed model in the cloud and on-premise, i.e. in the company's own data center. With 'implementation hosting', companies use the ERP solution for a limited period of time. This involves individually replicating their own on-premise system in the cloud in order to test live operation. This allows the customer to try out how their own systems work in the cloud.

As the platform is shared by several customers, the chosen SaaS solution should have a multi-client-capable front end. With the hosting variant, it is individual anyway, because each customer has their own front end. Once the decision for hosting has been made, however, companies must consider the basic architecture.

To ensure a high level of user acceptance, the front end of the ERP cloud solution should be simple and intuitive to use. If no new ERP system is to be introduced, it makes sense to adopt the established and familiar interface of the previous on-premise system 1:1, with the corresponding scope and infrastructure.

The ideal hosting architecture

The front end has to meet all the requirements of a secure, mobile, flexible and virtual workplace. This includes secure, location-independent access at any time and with any end device, high performance and fast user login. In conjunction with security services, a highly scalable platform enables worldwide access to the client in the user-based model. The corresponding environment must be fully automated to allow efficient management. With SaaS, the front end is shared by several cloud customers and therefore requires a particularly secure connection to the individual back end. With providers such as Proalpha, the server is always set up individually for the user, regardless of the model, and the back end is completely isolated from other environments in all cases. It is designed to ensure a powerful and secure network between the cloud data center and the employee's location worldwide. Daily snapshot backups secure the data and are stored in a second data center. Standard mirroring of all data in a second data center can be booked as an additional service. Fast connections via MPLS are also optional if the company has an Internet connection with a low bandwidth.

In terms of applications, a modern cloud-based
ERP solution contains all the important basic modules: These include production, materials management, document management, sales, purchasing, cost accounting, CRM and finance. Additional functions can be added as required, for example for make-to-order and contract manufacturers, series manufacturers and retailers. These include additional features that are tailored to complex processes and special requirements, for example in the supplier industry. Optional services such as VoIP telephony or data transfer via EDI provide additional added value. The solution should have a central integration platform for these extensions.

Data flow from on-premise to the cloud

In manufacturing in particular, other specialist applications are often used in addition to the ERP system, such as for production control or the design of technical solutions, which cannot simply be transferred to the cloud. These can continue to be used on-premise and do not necessarily have to be migrated, as their connection to a cloud ERP can be implemented very easily. The systems and technologies are connected on the basis of standardized integration platforms, for example an Integration Workbench (INWB). This also makes it possible to connect different installations of the ERP system. INWB works independently of technologies and data formats. The only requirement is that a clearly addressable interface exists in the target system.

It should be possible to model production processes realistically in the ERP front end.

© ProAlpha

In principle, all on-premise systems can be connected to the cloud. The data transfer is guaranteed via a VPN connection, which also ensures a high level of security and flexibility. This means that local systems are connected as if they were in the cloud. This makes it possible to simulate that the on-premise and cloud versions are in the same network. This also supports older systems that are still based on file transfer, such as EDI. The company only needs sufficient internet bandwidth for high availability and reliability.

To increase bandwidth and protect against failure, it can be useful to have a second Internet line available. In fact, for manufacturers, the first step towards a new product usually takes place in the design department. With interfaces such as CA-Link, companies enable a connection between CAD and ERP systems from the cloud and therefore a continuous flow of data and information between the design and ERP solution. The designer then accesses the central ERP database from their usual CAD application. Here, for example, they can find all parts information such as dimensions, availability or delivery times.

CAD and ERP from the cloud

Instead of an interface between PDM and CAD, direct integration via CA-Link is possible.

© ProAlpha

At the same time, CA-Link automatically manages CAD models, technical drawings and parts lists. The design data is thus available to all departments for subsequent work steps, including interactive 3D views. The link between CAD and ERP enables relevant data to be exchanged between the two systems. The actual data exchange remains with the user, as CA-Link only provides the VPN connection to the cloud. During a design process, the PDM/PLM data is automatically created in the ERP system. Master data, parts lists and other documents are stored centrally in the ERP. This avoids parallel operation with redundant data and interfaces to a PDM system.

Hosting of other third-party systems

Even in the cloud, the ERP system remains at the center of the company's IT infrastructure. It must therefore integrate adjacent on-premise systems or Internet of Things components. However, connected third-party systems can also be hosted in the cloud. For example, it may be possible to host a web store in conjunction with the ERP. Other applications such as Office applications, VoIP telephony, EDI, Exchange, B2B applications and other solutions can also be operated in the cloud. It is even possible to completely outsource the entire system landscape.

The aim should be to move as many systems as possible to the cloud, as otherwise you will still have to provide your own IT infrastructure with the corresponding personnel. A cloud-based connection to other systems such as Office may even be necessary for a continuous data flow.

Data security

When transferring sensitive ERP data to the cloud and storing it in the cloud, the security aspect is very important. One indicator of a provider's careful handling of this productive data is the operation of a second data center in the cloud for security purposes. Companies should also pay attention to certificates, such as ISO 27001-certified information security management. This ensures that the performance of the security systems meets current requirements at all times.

Getting started in the cloud

In order to comply with the strict German data protection regulations and guarantee a high level of security, the provider's cloud data centers should be located exclusively in Germany. This ensures compliance with all data protection regulations. A cloud environment therefore offers many companies higher security standards than in-house ERP operations in their own data center.

There are a number of potential stumbling blocks when starting out with an ERP cloud solution: These include insufficient bandwidth, especially for medium-sized companies outside major cities. This is why Proalpha, for example, offers a broadband connection via MPLS to connect to the fast data highway.

Another obstacle concerns the organization: the established IT team often feels threatened by the introduction of a cloud solution. However, relieving companies of routine tasks allows them to focus more on their core business. The time frame is also often misjudged: While a classic ERP implementation takes around a year, a cloud project can be completed in just a few weeks. Additional technical modules can be activated flexibly.

Before introducing ERP from the cloud, it always makes sense to consider whether and how the degree of individualization within the IT and process landscape can be reduced and which interfaces are not absolutely necessary. In this way, simple requirements can often be handled using a standard. Project development teams support the implementation of more complex individual solutions.

Author: Michael Bzdega is Solution Architect Business Cloud at Proalpha.