ERP - SME groups on cloud computing.

I read with interest a recent news article in a leading daily about a cluster of garment making unit in Tirupur, India, predominantly SME joining together to go in for Enterprise Resource Planning through cloud computing.

'Cloud computing' is one where in the application is used over Internet, where the customer pays only for the services of using the application and he does not pay for the cost of owning the application (software), hosting the application on the server, both of this can call for a huge investment.

'Cloud computing' service provider will own the software (application) and host the application on the server and upgrade both hardware and the software from time to time, so that business using cloud computing should not need to worry about the same.

I believe this should be best suited for SME's (small and medium sized) enterprise, particularly if the SME's are from same business verticals.

Like in the case, of Tirupur, garment manufacturers have joined together toward using ERP through cloud computing. Being from the same business vertical, the business process is going to be almost same (Procurement through Pay or Order through Cash receipts) or common, which would benefit the group from overall cost & resourcing prespective, they can even explore the possibility of shared service centre. Probably, the associations can have tie up with cloud computing vendor so that it benefits more business entities within the association.

Now, that ERP's offer multi-org facility, meaning, there is a privacy and confidentially of data being ensured even, if data or transaction reside on the same data base, it would really benefit if ERP is used under cloud computing by a group.

Good business initiate, which is worth exploring by cloud computing vendors, associations or groups of same business verticals!!.