How does cloud ERP work?

Cloud ERP runs on the vendor's infrastructure and is accessed through a web browser over a secure internet connection. The vendor handles hosting, updates, security, and backups, while you use the system to manage finance, supply chain, operations, and other core functions. Your data is centralized in one platform, so teams across sites and regions work from the same information in real time.

What are the main benefits of cloud ERP?

Cloud ERP typically lowers upfront costs, shortens implementation timelines, automates upgrades, and scales as your business grows. It also reduces internal IT burden, supports distributed teams, and creates a stronger foundation for AI, analytics, and automation.

What is the difference between cloud ERP and on-premise ERP?

On-premise ERP runs on servers your company owns and is maintained by your IT team. Cloud ERP is hosted and managed by the vendor and accessed online. Cloud ERP usually deploys faster, costs less up front, and updates automatically; on-premise ERP gives you more control over customization and system changes.

Reputable cloud ERP vendors invest heavily in security, with continuous monitoring, encryption, regular backups, and dedicated security teams. For most organizations, vendor-managed cloud security meets or exceeds what they can maintain in-house. Industries with strict compliance needs should confirm certifications and data residency options before selecting a provider.

How much does cloud ERP cost?

Cloud ERP is typically priced as a subscription, often per user per month, which spreads cost over time and avoids large upfront hardware and licensing fees. Total cost depends on the number of users, modules, level of customization, and implementation scope. Many organizations find cloud ERP delivers a lower total cost of ownership over time than on-premise ERP.

How do we know if we're ready to move to cloud ERP?

Look for friction in your current system. If upgrades are difficult, costs are rising, or the system is slowing down growth or reporting, it may be time to consider a move.

Can cloud ERP work alongside the systems we already use?

Yes. Most organizations connect cloud ERP with existing systems – manufacturing, supply chain, ecommerce, and HR platforms – to support broader operations.

What is cloud ERP software?

Cloud ERP gives your business a system that can adapt as you grow – supporting operations, connecting teams, and keeping pace with change.

Explore Infor cloud ERP

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Enterprise resource planning (ERP) systems first rolled out more than 30 years ago, providing a structured way to manage finance, operations, and supply chains in a single system. Cloud ERP builds on that foundation by changing how those systems are delivered and used. Instead of running on local servers, cloud ERP operates through secure, continuously updated platforms that connect data and processes across your business – giving you real-time access to information. It is easier to adopt new capabilities without major system overhauls, and it represents a move toward systems that can evolve at the pace of modern business.

Cloud ERP definition

As the name implies, cloud ERP software is delivered through the cloud rather than installed on local servers. You access it through a secure internet connection while your system provider manages the underlying infrastructure, updates, and support. Like traditional ERP, it unifies core functions such as finance, supply chain, operations, and workforce management in one system. But because it runs in the cloud, users work from the same data without having to manage hardware or upgrades. This makes it easier to coordinate operations and respond to sudden shifts with clarity and resilience.

Cloud ERP vs. on-premise ERP

Cloud-based platforms and ERP systems are fast becoming the expected norm for today's most competitive companies. These days, the question is not whether to choose cloud or on-premise ERP, but how to move beyond the older on-premise systems already in place. Both models support the same core business processes, but cloud systems – often built on multi-tenant cloud architecture – differ in how easily they are managed, how quickly they adapt to change, and how well they support a fast-changing global business climate.

Area	Cloud ERP	On-premise ERP
Deployment	Hosted by the vendor and accessed through a browser	Installed on company-owned servers and infrastructure
Ownership & maintenance	Vendor manages updates, security, and infrastructure	Internal IT team manages upgrades, patches, and hardware
Upgrades	Automatic and continuous, with minimal disruption	Manual, often complex, and sometimes delayed
Access	Available from anywhere with an internet connection	Typically limited to on-site access or VPN
Cost structure	Subscription-based with lower upfront investment	Large upfront costs for hardware, licences, and setup
Scalability	Can expand users, capacity, or features quickly	Requires additional hardware and configuration to scale
Implementation time	Faster to deploy due to no hardware setup	Longer due to installation, configuration, and infrastructure setup
Control & customisation	Standardised environment with controlled flexibility	Greater control over customisation and system configuration
IT dependency	Reduced reliance on internal IT resources	Ongoing reliance on in-house IT expertise
Security & protection	Vendor-managed with continuous monitoring, updates, and protection	Security depends on internal controls, updates, and available IT resources

What are the top benefits of cloud ERP?

Choosing cloud ERP is more than moving software off local servers. It means adopting a new way of running your business – one that supports you as you evolve and scale.

Lower infrastructure burden

Reduce the need to manage servers, storage, and system upkeep internally. Teams can focus on operations, process improvement, and business priorities instead of devoting time and budget to infrastructure.

Continuous updates and innovation

Instead of a major upgrade project every few years, updates are delivered on an ongoing basis. You stay current with new capabilities, security improvements, and performance enhancements without disruption or downtime.

Better support for distributed work

Cloud ERP is accessed over a secure internet connection. Teams can work across multiple sites, regions, or business units using the same system, security, and data – especially useful for global or multisite operations.

Faster access to new capabilities

Because the system is continuously updated, you can adopt new features and applications faster and more painlessly. This shortens the gap between when new capabilities become available and when they are in use.

More predictable cost structure

Traditional on-premise ERP meant buying a system up front and gradually growing into it. Cloud ERP uses a subscription model that meets you where you are now and lets you grow your system as your needs evolve.

Foundation for new technology

Technology is advancing quickly, with applications going from "nice to have" to "essential" almost overnight. Cloud ERP gives you the ability to add new technologies as they emerge – even ones that do not exist yet.

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Cloud ERP deployment options

While all cloud systems share the benefits of connected cloud access, they differ in how they are structured, how updates are managed, and how much control you keep in-house. Understanding these deployment options helps you choose the right balance between flexibility, standardisation, and operational responsibility.

Multi-tenant cloud ERP

In this model, multiple organisations run on the same version of the software while keeping their data securely separated. Updates, security, and improvements are rolled out smoothly to all customers at the same time, rather than one at a time. It makes use of shared infrastructure, reducing overhead while helping you stay current without ongoing upgrade costs. Learn more about multi-tenancy in the cloud.

Multi-tenant cloud ERP is the preferred model for most of today's businesses – avoiding large upgrade projects, reducing IT overhead, and keeping pace with ongoing change, especially across multiple sites or regions.

Single-tenant cloud ERP

In this model, each organisation runs its own dedicated instance of the software while still being hosted in a cloud environment. It offers greater control over configurations, update timing, and system changes, but updates and maintenance are managed separately rather than applied across all customers at once.

The single-tenant cloud ERP model is often chosen by organisations with strict compliance requirements, highly customised processes, or internal policies that require control over when and how system changes are introduced.

Hosted (or private) cloud ERP

In this model, traditional ERP software is moved off local servers and hosted in a cloud environment, but the system itself is not redesigned for the cloud. While it reduces the need to manage physical hardware, it typically requires the same level of maintenance, upgrades, and oversight as before.

Hosted cloud ERP is often used by organisations that want to move their systems out of the data centre but are not yet ready to adopt a more modern, cloud-based operating model.

Hybrid ERP environments

Some organisations operate a mix of cloud and on-premise systems. This may be a transitional step during migration or a long-term approach where certain systems remain on-premise due to operational or regulatory needs, while others move to the cloud.

Hybrid ERP is common in large or complex organisations where certain systems cannot be moved immediately, or where risk needs to be managed gradually during a transition.

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Adding value with industry-specific cloud ERP solutions

Many cloud ERP systems offer a broad set of general capabilities and rely on customers to tailor the rest through configuration. But today's markets grow more competitive by the day, and businesses increasingly need solutions purposebuilt – from the start – to reflect the workflows and operational realities of their specific industry.

Prebuilt industry workflows

Industry-specific cloud ERP systems include workflows and processes already aligned with how work gets done. This reduces the need to redesign core processes during implementation and helps teams get up and running more quickly.

Less custom code to maintain

When the system already works the way you need it to, there is less reliance on IT teams for one-off customisations. This means fewer things that can break, lower maintenance and IT costs, and the ability to stay current as the system evolves.

A stronger fit for complex industry requirements

Some industries have complicated requirements or complex compliance demands. Implementing all the necessary customisations inhouse is costly, time-consuming, and risky. An ERP built by industry specialists for industry specialists is ready to roll from day one.

Part of a broader industry solution

Industry-specific cloud ERP is built to work alongside complementary tools – analytics, automation, integration, and operational systems. This creates a more complete environment that supports the full scope of industry processes.

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Technologies driving today's cloud-based ERP software

Today's cloud ERP software has evolved from a separate tool to an integrated range of technologies – helping you analyse operations, automate routine work, connect systems, and adopt new capabilities. The technologies below are the ones reshaping how modern cloud ERP software supports day-to-day work.

AI built into the flow of work. Enterprise AI is increasingly embedded directly into core processes rather than sitting outside them. This allows AI to support decisions, surface patterns, and deliver insights tailored to specific roles and industries – using the same operational data your teams already rely on. See how AI in ERP is changing the way teams work.
Automation that reaches across workflows. Intelligent, AI-driven automation can be applied to a range of workflows – reducing the grind of routine tasks. This includes spotting opportunities and risks, routing tasks, triggering actions, and coordinating activity across systems and departments.
Analytics that work from connected business data. Instead of treating reporting as a separate layer, cloud ERP leverages advanced, built-in analytics. The value is not just greater clarity and visibility, but the ability to work from connected operational, financial, and customer data to support the best possible strategies.
Process mining. Process mining uses system data to show how work actually flows across the business. Teams can flag inefficiencies and gaps between intended and real processes. When powered by AI, it can highlight where to improve or automate, giving ERP an active role in operations.
AI agents and extensibility. AI agents and extensible platform services allow you to adapt and ramp up the system without disrupting the core environment. Role-based agents can support process optimisation, while extensibility enables new applications to be added as your needs evolve.

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Conclusion

Cloud ERP reflects a broader shift in how today's businesses run, adapt, and grow. Systems are no longer static tools that require constant maintenance and periodic overhaul. They are fully integrated solutions that evolve alongside you, support more connected ways of working, and make it easier to adopt new technologies the moment they emerge. The real value is not just in moving to the cloud, but in choosing an approach that fits how your industry operates, reduces unnecessary complexity, and gives you a clear path forward.

See how Infor's AI-powered cloud ERP keeps modern industries competitive.

Explore Infor cloud ERP

Cloud ERP FAQs

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Resources

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What is cloud ERP software?

What is cloud ERP?

Cloud ERP definition

Cloud ERP vs. on-premise ERP