8 criteria when choosing (ERP) cloud computing in SMEs

Interest in and use of cloud services in German companies has increased more and more in recent years. Cloud computing is increasingly becoming the standard: 73 percent of companies in Germany now rely on the technology. Only 10 percent say that it is not currently an issue for them. Five years ago, one in three companies was still disinterested. (Source: Bitkom).

From the user's point of view, cloud computing means the use of IT services (e.g., storage, software, computing capacity) via a network (Internet, intranet). The IT services can be adapted and billed as required.

The main advantages are often lower costs, flexible capacity, time savings and global availability of data. To find the right provider, eight criteria should be met by the provider.

The three most common cloud computing delivery models

Private Cloud Computing

An organization-internal cloud. IT services are used via an internal network (intranet).

Public cloud computing

IT services are used via the "open" Internet.

Hybrid cloud computing

A combination of public and private cloud. Access takes place according to the needs of the users.

The variety of cloud models

Every company has different requirements for suitable software. In special cases, hybrid solutions can be an interesting alternative. It must be clarified in advance which cloud service model is suitable for the company. A distinction is made here between three different service models:

Software as a Service (SaaS)

SaaS service providers offer special selections of software that run on their infrastructures. SaaS is also referred to as software on demand. SaaS is most commonly used in cloud delivery of commercial software such as ERP systems, CRM systems, accounting software, etc.

Platform as a Service (PaaS)

Clouds provide usage access of programming or runtime environments with flexible, dynamically customizable computing and data capacities. With PaaS, users develop their own software applications or have them run within a software environment provided and maintained by the service provider.

Infrastructure as a Service (IaaS)

Clouds provide usage access to virtualized computing hardware resources such as computers, networks and storage. With IaaS, users freely design their own virtual computer clusters and are therefore responsible for the selection, installation, operation and functioning of their own software.

The availability of the cloud

The availability of data at all times is of enormous importance for the majority of companies. Attention should be paid to:

High performance through high-performance servers, capable storage and fast data lines.

High reliability through redundantly designed data centers in the event of complete failures as well as an emergency power supply

Fast recovery of data in the event of damage

The support agreements

As a rule, the provider takes on a wide range of service tasks. General operation, connection to workstations, maintenance and updates are in the hands of the provider and are anchored in the service level agreements. The advantage is: a single main contact who delivers everything from a single source.

The Internet connection

Outside of metropolitan areas, there is often no sufficient connection to fast Internet. This reduces performance and eliminates the advantage of dynamic scalability of the software. It is therefore necessary to clarify what kind of network connection is available in order to avoid annoyances later on. In the case of slow connectivity, there is the option of installable high-speed network access.

The liquidity advantages

A huge advantage of cloud computing is the cost savings. Expensive hardware, maintenance and management costs, and updates are taken care of by the provider. There is no need for a risky initial investment and the associated liquidity bottlenecks, as cloud billing is based on the actual use of the software.

Security and data protection

The thorny issue of data protection and security must definitely be taken into account when selecting the right provider. First and foremost, it is necessary to protect against IT threats such as hacker attacks, viruses and espionage. At this point, SMEs in particular benefit, since the security services are taken over by the cloud provider and thus no in-house staff is required. Legal requirements are also implemented automatically as a result. In addition, attention must be paid to a data protection policy for personal data during the processing and storage process. This is regulated by the EU General Data Protection Regulation.

In order to find a suitable provider, a number of requirements should be met in terms of security:

Audit of security by an external third party e.g. Security Operations Center.

Certifications (TÜV Rheinland certificate, Certified Cloud Service, ISO 27001 certificate)

Transparency, trustworthiness and experience on the part of the provider

The transfer of business applications to the cloud

As part of a restructuring of the internal IT landscape towards the cloud, it should be examined whether further business applications such as CRM software, human resource software or office applications should be moved to the cloud. Central data storage saves time, allowing the company to concentrate fully on its core business.