Cloud-based Enterprise Resources Planning System (ERP)
A Review of the Literature
Yuqiuge Hao and Petri Helo
Department of Production, University of Vaasa, Wolffintie 34, Vaasa, Finland
Keywords: Cloud Computing, ERP System, Literature Review.
Abstract: Cloud computing recently attracted a lot of attentions. The growing number of articles on cloud is an
indication of its importance. Cloud ERP is a specific service delivered by cloud model. It provides
companies the benefits of all business management functionalities with minimum IT investment and low
cost. Despite cloud ERP is being promoted as a new strategy to improve companies’ management and
operations, no systematic research on cloud ERP has been published until now. The main objectives of this
research are to review up-to-date publications on cloud ERP, to classify the publications based on a suitable
classification of themes and to develop a conceptual framework for organizing its related knowledge. In this
paper, 40 peer-reviewed journal and conference publications are analysed and classified into different
themes. A concept framework is designed with four domains: Technology Innovation, Business Model,
Development Method and Usage & Assimilation. This framework specifies the research gap between cloud
ERP and business alignment. In the end, some research agendas are developed.
1 INTRODUCTION
In 1990s, as many companies targeted to extend
their market globally, achieving balance and
synchronization within companies became critical.
Enterprise Resources Planning systems (ERP) were
widely implemented in multinational companies to
integrate diverse and complex corporate operations.
With the development of high-tech, one of the
most important trends in recent years is cloud
computing. It has the potentials to reshape the way
IT services are consumed. Cloud computing is
defined by NIST (National Institute of Standards and
Technology) as a model for enabling on-demand
network access to a shared pool of configurable
computing resources that can be rapidly provisioned
and released with minimal management effort.
Lately, several ERP vendors have moved some
of their ERP offerings to the cloud environment,
e.g., SAP, Microsoft, etc. However, before the
customers can see more and more services and suites
moving to the cloud, further research efforts should
be made to contribute to the knowledge on the
marriage of cloud and ERP.
Since the topic of cloud ERP is relatively
unexplored, our objective is to move the research
forward and forecast the future of cloud ERP.
Therefore, we are going to analysis current status of
cloud ERP based on the literature introduced before.
For this, following research questions are addressed:
What are the current research themes of cloud
ERP research?
What is the future concept framework of cloud
ERP research?
In this paper, we conduct a comprehensive
literature review of cloud ERP to answer our
research questions. This literature review is within a
timeframe of 2000-2013. Particular attention is paid
to the peer-reviewed papers published in journals
and conferences. There are several review articles on
cloud ERP (Shukla, Agarwal and Shukla, 2012;
Grabski, Leech and Schmidt, 2011; Salleh, Teoh and
Chan, 2012; Salleh, Bohari and Khedif, 2013; Duan
et al., 2012). They reviewed state of art, emerging
trends and relevant phenomenon in cloud ERP. But
none of them provides any conceptual framework.
The body of academic knowledge about cloud ERP
is still premature. An apparent gap in cloud
computing for ERP applications research exists
(Elragal and Haddara, 2012). It is crucial to find out
the possibilities with cloud computing when it
comes to business systems like Enterprise Resource
Planning (Symonds, 2012)
In this paper, the literature available on cloud
ERP is reviewed with a focus on four themes:
Business, Technology, Development and Usage. A
185
Hao Y. and Helo P..
Cloud-based Enterprise Resources Planning System (ERP) - A Review of the Literature.
DOI: 10.5220/0004869401850192
In Proceedings of the 16th International Conference on Enterprise Information Systems (ICEIS-2014), pages 185-192
ISBN: 978-989-758-028-4
Copyright
c
2014 SCITEPRESS (Science and Technology Publications, Lda.)
conceptual framework is developing based on these
four themes. This conceptual framework contributes
in two ways. Firstly, we provide guidance for
researchers with insight into what has been
published in the mean while provide a broad view
into the development of streams of cloud ERP
research. Secondly, this conceptual framework can
be useful for managers from industry in increasing
their understanding of areas of cloud ERP.
The remainder of this paper is organized as
follows. The definition of cloud ERP is reviewed in
section 2. The methodology adopted in this research
for carrying out the literature review is presented in
section 3. We provide an overview of the main
finding from prior studies based on themes
classifications in section 4. In section 5, we present
the conceptual framework based on our findings.
The conclusions finally bring the remarkets of
current research issues and further suggestions.
2 DEFINITION OF CLOUD ERP
In today’s complex IT world, increasing attention
has been paid to cloud ERP. In the year 2009, this
concept firstly was brought up by industry leaders
when Software as a Service (SaaS is one cloud
service to deliver application and fulfil business
requirements) increasing markedly. Many media and
research centres such as Gartner (2009), IDC (2009)
ZDNet (2009), and CIO Magazine (2009), also made
several predictions on cloud ERP. Aberdeen Group
(Castellina, 2011) characterized that ERP would be
implemented by SaaS model since 2007. However, it
was not prevalent until 2010.
Cloud ERP is a term without a commonly
accepted scientific or technical definition. In some
of research papers (Saini et al., 2011; Raihana, 2012;
Makkar and Bist, 2012; Mangiuc, 2011; Duan et al.,
2012; Al-Johani and Youssef, 2013; Keshwani and
Sharma, 2013), it is also referred to SaaS ERP or
ERP as a Service.
“Cloud computing” has the potential to radically
change the ERP environment (Grabski, Leech and
Schmidt, 2011) and fulfil companies information
needs (Saini, Khanna and Kumar, 2012). It is
possible to combine the benefits of using an
innovative method such as cloud computing and
ERP to develop a new generation of tools for back
office (De Maria et al., 2011).
Many researchers (Appandairajan, Zafar Ali
Khan and Madiajagan, 2012; Binu and
Meenakumari, 2012; De Maria et al., 2011; Elragal
and Haddara, 2012; Hao, Juell-Skielse and
Uppström, 2012; Kiadehi and Mohammadi, 2012;
Lenart, 2011; Mangiuc, 2011; Symonds, 2012;
Raihana, 2012; Sunder, 2011; Salleh, Teoh and
Chan, 2012; Saini et al., 2011; Saeed, Juell-Skielse
and Uppström, 2012; Vimalkumar, Rajamani and
Jayasubramanian, 2012) attempted to define cloud
ERP and its characteristics. Salleh, Teoh and Chan
(2012) claimed that most of the definitions are
vendor-driven, and it is very important to think
cloud ERP from academic and industrial
perspectives.
Theoretically, cloud ERP is package software
delivered by the Internet. It consists of all the
solutions to manage simplified and standard
business flows on a web-based architecture (De
Maria et al., 2011). It is very easy and simple to use,
deploy and maintain (Makkar and Bist, 2012; Binu
and Meenakumari, 2012). User can simply lease and
access services which are related to their business
through the cloud (Salleh, Teoh and Chan, 2012)
based on the pay-as-you-go model. This means the
users should pay based on the processing power or
memory usage (Appandairajan, Zafar Ali Khan and
Madiajagan, 2012; Kiadehi and Mohammadi, 2012).
Therefore, service provider is responsible for the
operation, upgrading and maintenance of the
software relevant technology (Saini et al., 2011;
Raihana, 2012; Makkar and Bist, 2012).
A true cloud ERP is multi-tenant, that is, all the
users are using the same application but in different
instances. Users only need to know the endpoints to
access cloud ERP’s capabilities, which include all
storage, computing, database and other resources,
through a single application instance and expect it to
support their unique business. Moreover, user can
scale up and down the resource consumptions,
depending on their dynamic business needs (Sunder,
2011; Saini et al., 2011). Any changes or updates
need to be effected only once and immediately to all
subscribing users (Sunder, 2011). It is interesting
that users may or may not know that the ERP
application is built by the resource from multiple
services and potentially from multiple locations
(Saini et al., 2011; Raihana, 2012).
3 METHODOLOGY
In this paper, literature review was employed as the
research methodology. By reviewing high quality
research literature can accumulate existing
knowledge and contribute to a cumulative culture
desired in any research field especially in
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186
Information System (IS) (Salleh, Teoh and Chan,
2012).
Harzing’s Publish or Perish software was used to
find out which are the most cited publications
concerning the subject of this paper. A general
citation search was made by using the phrase
“CLOUD ERP” with double quotes to ensure the
search condition. This study aims to synthesize the
review of past literature on cloud ERP spanning
from a period of the last decade, so the Year of
publication is between 2000 and 2013. The literature
was searched extensively in different resources in
the disciplines of business, management, industrial
production, information system and technology, etc.
As a result, 124 papers were found by 20
September, 2013 (cut-off-date). By eliminating non-
English papers and reduplicate papers (35), only 89
validated articles were left. For the sake of
rigorousness, bachelor/master/PhD thesis, textbooks,
unpublished working paper were excluded. Only
peer-reviewed journal, conference and book of
chapter (conference proceedings) were included.
Therefore, only 40 articles were carefully selected
after refining to synthesize the literature and grasp
an understanding of cloud ERP phenomenon. The
literature included publications by numerous
publishers, in particular Elseriser, Emerald, Springer,
etc. As cloud ERP is a relatively new topic, such a
small number is unsurprising.
When the year of publication is considered, it
becomes clear that this subject of study is relatively
recent, as shown in Table 1. For example, only 1
article published before 2011. The sudden increase
of publication between years 2011-2013 indicates
the boom of cloud computing and applications of
SaaS.
Table 1: Number of articles on cloud ERP between 2000-
2013 (as of 20/09/2013).
2000-
2009
2010 2011 2012 2013
Number of
Publications
0 1 8 20 11
Figure 1 presents the distribution of reviewed
articles in past 4 years (2010-2013) from different
publication outlets. The majority of the literature (20
articles, 50%) is published in various international
journals while 37.5% (15 articles) is from
conferences. 5 papers (12.5%) are chapters of books.
The detailed information of journals, conferences
and book chapters are presented in the reference list.
Figure 1: Number of articles in different publication
outlets between 2010-2013 (as of 20/9/2013).
4 CLASSIFICATION OF CLOUD
ERP
A thematic analysis was developed to exam the
themes of reviewed literature. The results are
presented in Table 2 (all articles are arranged
alphabetically by authors’ surnames).
The classification of cloud ERP was based on the
literature introduced in this review and the interest
of cloud ERP research. Currently, cloud is gaining a
considerable attention in Information System (IS)
literature, therefore the existing classification
schemes of IS (Barki, Rivard and Talbot, 1993) was
selected as a base of themes classification.
It is difficult to divide the articles by different
themes, especially when there are no fixed rules for
this division. Therefore, this division is only made to
simplify the research findings and make it easy for
readers to follow. One research paper may
contribute to several of these themes.
Business theme indicates the impact of cloud
ERP on business strategy, i.e. the company’s
competitive advantages or disadvantages, etc. since
the combination of cloud and ERP is quite new and
receives increasing attention, technology is seen as
the highly debated topic. Because cloud is an
alternative way to develop software, development
becomes a major topic in this research area. Some
articles related to end users belong to practical topic;
therefore they are included into usage theme.
Cloud-basedEnterpriseResourcesPlanningSystem(ERP)-AReviewoftheLiterature
187
Table 2: Classification on themes in cloud ERP.
Articles
Business
External environment impact
Khajeh-Hosseini, Sommerville and Sriram, 2010;
Lenart, 2011; Saeed, Juell-Skielse and Uppström, 2012;
Saini, Khanna and Kumar, 2012
Internal organization impact
Al-Johani and Youssef, 2013; Appandairajan, Zafar Ali
Khan and Madiajagan, 2012; Binu and Meenakumari,
2012; De Maria et al., 2011; Duan et al., 2012;
Gheorghe and Lupaşc, 2012; Grabski, Leech and
Schmidt, 2011; Iqbal, Juell-Skielse and Uppström,
2011; Keshwani and Sharma, 2013; Kiadehi and
Mohammadi, 2012; Lenart, 2011; Makkar and Bist,
2012; Mangiuc, 2011; Okezie, 2012; Purohit, Jaiswal
and Pandey, 2012; Raihana, 2012; Saeed, Juell-Skielse
and Uppström, 2012; Saini et al., 2011; Salleh, Teoh
and Chan, 2012; Saini, Khanna and Kumar, 2012;
Salleh, Bohari and Khedif, 2013; Suciu, Ularu and
Craciunescu, 2012; Shukla, Agarwal and Shukla, 2012;
Symonds, 2012
Technology
Cloud Environment
Al-Johani and Youssef, 2013; Clohessy and Acton,
2013, 2; Duan et al., 2012; Gheorghe and Lupaşc, 2012;
Hao, Juell-Skielse and Uppström, 2012; Kiadehi and
Mohammadi, 2012; Keshwani and Sharma, 2013;
Lenart, 2011; Mangiuc, 2011; Makkar and Bist, 2012;
Raihana, 2012; Saini et al., 2011;Salleh, Teoh and
Chan, 2012
Data Management
Appandairajan, Zafar Ali Khan and Madiajagan, 2012;
Keshwani and Sharma, 2013; Saeed, Juell-Skielse and
Uppström, 2012; Sunder, 2011
Security
Appandairajan, Zafar Ali Khan and Madiajagan, 2012;
Binu and Meenakumari, 2012; Gicev, Atanasova and
Pehcevski, 2013; Iqbal, Juell-Skielse and Uppström,
2011; Lenart, 2011; Suciu, Militaru and Todoran, 2012
Development
Lifecycle
Gheorghe and Lupaşc, 2012; Hao, Juell-Skielse and
Uppström, 2012; Okezie, 2012
Implementation
Al-Johani and Youssef, 2013; Appandairajan, Zafar Ali
Khan and Madiajagan, 2012; Duan et al., 2012; De
Maria et al., 2011; Grabski, Leech and Schmidt, 2011;
Lenart, 2011; Mangiuc, 2011; Kiadehi and
Mohammadi, 2012; Okezie, 2012; Suciu, Militaru and
Todoran, 2012; Suciu, Ularu and Craciunescu, 2012
Functionalities
Al-Johani and Youssef, 2013; Castellina, 2011; Elragal
and Haddara, 2012; Lenart, 2011; Mangiuc, 2011; Saini
et al., 2011
Usage
Education &Training
Dykshoorn and Nemani, 2013; Hao, Juell-Skielse and
Uppström, 2012; Purohit, Jaiswal and Pandey, 2012
Use cases
Al-Johani and Youssef, 2013; Clohessy and Acton,
2013; Clohessy and Acton, 2013, 2; Musaeva and
Petrochenkov, 2011; Okezie, 2012; Purohit, Jaiswal and
Pandey, 2012; Shukla, Agarwal and Shukla, 2012;
Suciu, Militaru and Todoran, 2012; Sunder, 2011;
Suciu, Ularu and Craciunescu, 2012
5 CONCEPTUAL FRAMEWORK
OF CLOUD ERP
Following the initial literature review, a conceptual
framework has been developed for identifying areas
of research concern with regards to cloud ERP and
the relationships among different themes, as shown
in Figure 2.
Figure 2: Cloud ERP diamond conceptual framework.
This framework is defined in terms of four
fundamental domains of cloud ERP research which
we have labelled: Technology Innovation, Business
Model, Development Method and Usage &
Assimilation. Each of these domains suggests
different research orientations as well as provides a
theoretical foundation for future research. This
framework could also be used to identify research
gap and develop research agenda to address this gap.
5.1 Technology Innovation Leads to a
New Business Model
Nowadays, progressive organizations are evolving
towards a more agile business model which must be
supported by advanced technology. This change will
drive impressive business outcomes and increase
competitiveness. Cloud computing is a catalyst for
technology innovation and also is an innovation in
itself.
Unlike the old ERP with many constraints in old
technologies, for today this new cloud ERP solution
should look at deeper and further business scope and
actions. In order to fully comprehend the capabilities
afforded by cloud, it is necessary to explore the
innovation potential (Clohessy and Acton, 2013, 2).
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The next phase of cloud technology evolution is
expected to be a more networked solution which
enables the communication across different
organizations. In this sense, cloud ERP service will
extend to wilder business impact. Furthermore, the
usage of cloud ERP should be expandable regarding
to the business.
Kiadehi and Mohammadi (2012) emphasized
that cloud impacts the business strategy and
optimizes the business by providing more agility,
business & IT alignment, service flexibility and
industry standards.
The future of cloud ERP is to encourage cross-
functional cooperation and to solve business
problems. There is a commitment to the
establishment of consistent baseline performance
information across a number of functional areas
(Clohessy and Acton, 2013, 2). More and more
companies are now recognizing that the business
model is changing to be more agile, productive of IT
and available (Suciu, Ularu and Craciunescu, 2012).
5.2 Technology Innovation Affects the
Development Method
Cloud can reduce the cost, complexity and time
required to realize the IT services. The use of the
term cloud implies that the technologies include
virtualization and load balancing technology and
these technologies allow applications to be deployed
across multiple servers and database resource. The
success that has been achieved in other enterprise
systems development needs to be replicated in cloud
ERP development. Cloud ERP can address cross-
organization planning, coordinated implementation
on many business and organizational levels. In some
cloud ERP solutions, a certain degree of
customization and industry-specific support is
needed.
The development lifecycle will definitely be
changed with the emergence of new technologies.
This is due to the fact that cloud computing will
shorten and change the activities of the lifecycle. It
is very fast to go to market. The customer demands,
globalization and quick information flow require
cloud ERP works at a high speed.
With an ever-growing list of cloud ERP vendors,
there will be more options for enterprises. On the
other hand, although the implementation time is
reduced, enterprises have to invest much more time
into pre-implementation activities, such as selection,
negotiation, customization, etc. However, it is
difficult to evaluate the quality of cloud ERP
vendors. They have own set of pricing, billing,
flexibility, support and other important parameters.
5.3 Business Model and Development
Method Jointly Change the Usage
and Assimilation
Cloud ERP has dramatically changed how users
utilize ERP services and conduct their business.
These changes in business and technology also
affected the way people work. Cloud ERP enables
people working from multiple locations in a simple,
convenient and flexible style. The usage of cloud
ERP will improve people’s commitment to the
company and productivities (Dykshoorn and Nemani,
2013). The ability to work flexibly reduces
communication time greatly. Because of the
characteristics of cloud ERP and the fact of different
development methods, there are obvious differences
in usage compared with traditional ERP.
Obviously, without proper implementation and
business decision, this cloud ERP may not provide
the promised value. Assimilation means that
companies progress from understanding cloud
ERP’s potential and functionalities to mastering and
deploying them in their key value chain process
(Pishdad and Haider, 2013). After cloud ERP is
implemented in a company and its usage becomes
routinized and embedded within the companies’
work processes and value chain activities, it leads to
institutionalization of cloud ERP.
After all, it is very important to pay attention to
post-implementation activities. Proper usage of
cloud ERP not only results in greater levels of
organizational performance, but also increases users’
satisfaction and motivation.
5.4 Research Gap
Obviously, cloud based solution impacts not only
the IT industry but also customers’ industries. From
the business perspective, the real potential of cloud
is to improve the alignment between IT and business.
Only when approached correctly, cloud can offer a
new set of benefits.
However, it is essential to understand that cloud
is not a solution for every company. The decision
and selection depend on resource availability, IT
infrastructure, functional requirements, total cost of
ownership for the software, and delivery options to
the specific company.
Cloud ERP can enhance the business
productivity hence the companies can deliver
business value much sooner. However, cloud ERP
has not gained strong business adoption as we
Cloud-basedEnterpriseResourcesPlanningSystem(ERP)-AReviewoftheLiterature
189
expected mostly due to lack of knowledge about
how to align cloud ERP strategy to business strategy.
Cloud ERP should be aligned with the
organizational environment and gain social approval
(Pishdad and Haider, 2013). Aligning IT to the
business goal is the highest ranked cloud ERP
priorities and challenge. It is extremely important to
companies which are considering cloud ERP
adoption. We noticed that no such research indicates
cloud ERP and business alignment or their
relationships. Therefore, we suggest more research
efforts should be conducted to fulfil the research gap.
Presenting on Figure 4, the arrow is only one
way from technology innovation to the business
model. Actually, it should be two-direction arrow
and it indicates that the cloud ERP are used to
support the IT and business strategy alignment.
6 CONCLUSIONS AND
REMARKS
ERP system has come a long way in its evolution.
Now we move to the era of cloud and we are using
cloud for business-critical application, such as ERP.
Every revolutionary paradigm shift brings along new
business opportunities. We have recognized the
benefits of using cloud ERP. In this review paper, a
comprehensive literature review on cloud ERP was
conducted based on a vast amount of papers
published. A methodology, which consists of 3 steps,
was followed:
Selecting and accumulating the papers pool
Setting up filters to collect the target papers
Classifying all the papers by common themes
Our study reveals 40 publications from journals
and conferences. With regards to the overall
reviewed papers in this paper, we draw some key
points:
1. Many of the early cloud ERP research papers
are relatively simple, descriptive studies of cloud
ERP. Majority of the papers deal with the problem at
the conceptual level, and also the papers pool is
small since many of the reviewed papers are written
by the same group of authors.
2. It lacks longitudinal studies, so it is difficult to
report the long-term effects of cloud ERP. The
literature is mainly in the period 2011-2013. There
could be some bias in such a short time booming.
3. The current research of cloud ERP in these
papers fairly focused on “cloud technology” and its
business benefits. It is scant of practical and
empirical research directly pointing to cloud ERP.
Definitely, cloud ERP research needs greater focus
on theoretical support and theory development to
explain findings.
Additionally, a conceptual framework has been
developed for cloud ERP research areas based on the
classification of themes of all reviewed papers,
according to the topic of interest. Four domains were
identified: Technology Innovation, Business Model,
Development Method and Usage & Assimilation.
The contributions of this framework are twofold:
For managers, it can assist in creating an
understanding of the broad spectra issues of
concern that one has to take into consideration
in regard to cloud ERP.
For researchers with an interest in cloud ERP,
the conceptual framework can be used for
positioning their research and interests, and it
helps in creating an understanding of the
broader context of cloud ERP related research.
Based on our literature review, we present some
research opportunities and implications as follows:
In most of the literature, the term cloud ERP is
perceived differently by authors. Some
authors perceive it as SaaS ERP, others define
it as ERP as a service. There is a need to
establish a common definition, accepted by
both industries and academia. We expect an
exponential growth in the number of cloud
ERP research in a near future. A unified
definition and a set of technical standards of
cloud ERP are expected.
The current literature lacks focus on cloud
ERP implementation and development. We
were not able to find any article that directly
addresses cloud ERP strategy and its
implementation phase.
Furthermore, literature lacks cases that using
cloud ERP in the organization and
comparisons between “on-premise” and “on-
demand”. This kind of comparison might be
fruitful for cloud ERP literature.
Moreover, the usage of cloud ERP in
organization had scant attention. Only few
articles examined cloud ERP post-implement.
Many research focus on cloud ERP business
impact and technology, but seldom on post
implementation impact. This highlights a
critical research gap and the needs of careful
attentions to activities such as education and
training.
In general, majority of the existing papers are
from vendor’s perspective, and it lacks paper
from user’s perspective. It could be beneficial
if researchers can study from both
perspectives; therefore different stakeholders
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may avoid previous pitfalls.
Even though this article reports all the articles on
cloud ERP without any constraints, more selection
criteria can be applied to reduce or increase the
number of articles for a different kind of review
report or research depending on the nature or the
research question. For instance, the research on
different kinds of organizations using cloud ERP is
meaningful.
This paper has limitation. Our sample was
mainly based on academic publications. As cloud
ERP is industry-driven in nature, many good
professional articles may also embrace this
phenomenon. This may hinder the ability of the
present paper to delineate a complete picture for the
current development in this domain.
In the future, the field of cloud ERP will
certainly continue to mature and even more in the
extension period. As significant market share will be
gained with the implementation process, different
topics such as the importance of using cloud ERP
and the assessment of cloud ERP values seem to be
becoming of interests to both the researchers,
businesses and industrial organizations as they are
potential areas for future research. It might be a time
for scholars or academia to reflect on their
experiences and begin publishing for common good.
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