A cloud-based inventory management system (IMS) is a solution run on remote servers. All the functionality can be accessed from any location over the Internet. Inventory data is stored and processed virtually by cloud servers.

key features of cloud IMS

The top three peculiarities of cloud-based inventory management software are: 

  • Access over the Internet. IMS is installed on remote servers and can be accessed by using any device at any location. Software installation may not be required if an IMS is accessed via a web browser.
  • Vendor-managed infrastructure. A third-party provider fully maintains remote servers and hardware.
  • Top-tier security. A cloud-based infrastructure provides a high level of security. Also, data can be easily recovered in case of unforeseen disaster.
  • Seamless scalability. No additional hardware should be installed to increase the computing power and storage capacity.
  • Integrated tools and services. Cloud computing providers provide access to integrated tools that help optimize inventory management and data analysis.

In this article, you will learn about the key peculiarities of cloud-based inventory management, positive outcomes, and how to create a new IMS designed to solve unique business problems.

Build a cloud-based inventory management system with CodeIT


To fully understand the strengths of a cloud-based IMS, let's compare its key features with those of an on-premises solution.

Cloud-Based IMS On-Premises IMS
Installation and Setup Fast and easy remote server configuration. No hardware should be installed. Software and hardware should be installed physically. Also, it's required to establish a network.
Accessibility Stable and secured Internet access is required. Accessible within a configured network. It can work offline.
Maintenance Remote servers are fully maintained by a vendor. The entire infrastructure should be maintained by an in-house team.
Scalability Infrastructure can be easily scaled up and down by submitting requests over the Internet. New hardware should be installed to increase the storage or computing power.
Costs Subscription-based model. Pay only for the resources used. High upfront infrastructure installation costs. An in-house team of systems administrators is required to maintain an infrastructure.
Data Security Robust data security. Automated backup creation and disaster recovery tools. In-house specialists manage security and data backup.
Hardware Control 100% of the hardware is maintained and updated by a vendor. Full control over on-premises infrastructure.
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Let's explore the positive business outcomes and technical benefits of implementing a cloud-based inventory management system.

Business and technical benefits of cloud-based IMS

Business Benefits

Business benefits describe the improved financial and risk management outcomes of using a cloud-based inventory system.

  • Cost-effectiveness. No upfront installation costs. Moreover, businesses need to pay for the only cloud computing services they use.
  • Seamless scalability. The computing power and storage capacity can be easily scaled up and down in accordance with business needs.
  • Improved collaboration. The ability to access inventory management software over the Internet enables the opportunity to create an effective collaborative environment.
  • Effective risk management. Minimized system failure because of top-tier security. Also, cloud providers offer access to automatic data backup and disaster recovery tools.
  • Business agility. Fast system scalability and a large variety of integrated tools help rapidly respond to ever-changing business environments.

Technical Benefits

Technical benefits refer to optimized operations and technical solutions of cloud-based inventory management software.

  • Remote accessibility. Dedicated servers can be managed remotely. Also, the cloud-based IMS can be accessed from any device over the Internet. 
  • Integrated tools and services. Top cloud computing services providers enable access to advanced integrated solutions. They can be applied to improve workflows, analyze data, manage IoT devices, etc. 
  • Vendor-managed infrastructure. Remote servers are 100% managed and maintained by a third-party company.
  • Enhanced security and compliance. Cloud-based infrastructure enables top-tier security and data protection. Also, it provides the opportunity to better comply with regulatory requirements.
  • Seamless integration. Cloud-based inventory management software is easy to integrate with third-party software.
Want to switch to a cloud-based IMS?


The cloud-based inventory management software development process comprises six key stages.

Cloud-based IMS development

1.  Requirements Analysis and Planning

Analyze the specific needs of your business. Understand the main challenges of inventory management and if they can be solved by switching to a cloud. Also, it's required to form a business vision and long-term development plan.

Outline requirements for a new inventory management system. Compose functional and non-functional requirements.

Compose a software development plan. It should imply a backlog of tasks, user stories, the "definition of done" for features, and responsible roles.

Output artifacts Involved roles
  • Software requirements specification
  • Solution development plan
  • Business analysts
  • Stakeholders

2. Architecture and Design Creation

Develop the architecture of a cloud-based inventory management system. Choose the most optimal technology stack. Define a set of features that should be implemented and third-party systems to connect with your IMS.

Create the UI/UX interface of a new IMS. It should imply wireframes that outline interface components and placement.

Output artifacts Involved roles
  • IMS architecture
  • Tech stack
  • System design
  • Wireframes
  • System architect
  • Designer
  • Project manager

3. Cloud Provider Selection

Select a cloud service provider. Analyze the top services offered, prices, scalability options, integrated features, etc. The top three cloud service providers are:

  • Amazon Web Services (AWS)
  • Google Cloud
  • Microsoft Azure
Output artifacts Involved roles
  • Cloud platform comparison report
  • Best provider reasoning report
  • System architect
  • Software engineers

4. IMS Development

Onboard a team of software engineers and share all the documentation. The involved specialists should:

  • develop a prototype and collect feedback
  • create the MVP of an inventory management system
  • refine the developed product by releasing new features incrementally
  • test the product and fix detected bugs
  • deploy the inventory management system on a cloud server
  • prepare technical documentation and user guides

Additionally, software engineers may be required to:

  • connect the IMS with other services and tools used by a company
  • migrate inventory data from a previous IMS
Output artifacts Involved roles
  • Prototype
  • MVP
  • IMS deployed on a cloud server
  • Technical documentation
  • Software engineers
  • Database administrators
  • System administrators
  • Project manager
  • Technical writer
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5. Testing

Onboard quality assurance (QA) engineers. They need to conduct manual and automated software testing. Detected bugs should be documented. Software engineers are responsible for fixing identified bugs, security issues, and other problems.

Output artifacts Involved roles
  • Bug and test reports
  • Stakeholder feedback
  • QA specialists
  • Project manager
  • Stakeholders

6. Deployment

Configure a remote server and release the cloud-based inventory management solution. Test the application in a real-world environment and maintain the cloud infrastructure to ensure the maximum IMS uptime.

Output artifacts Involved roles
  • Configured cloud-based server
  • Deployed cloud-based inventory management software
  • Software engineers
  • System administrators
  • Project manager
Build an IMS perfectly tailored to your business needs


The CodeIT team has developed an innovative cloud-based inventory management system. It works in web browsers and mobile devices.

CodeIT expertise IMS development


The client wasn't satisfied with the functionality of the existing inventory management system. Our team was hired to optimize the system and implement new industry-specific inventory management features.


Our team has thoroughly analyzed the existing solution. Our tech specialists have conducted a technical audit. We've prepared a detailed project reboot plan to implement a new cloud-based inventory management software that is fully aligned with the client's business needs.

Following the approved plan, we developed a new inventory management, implementing all the requested features. The solution is tailored for managing medical products and inventory. The three apps created by the CodeIT team include:

  • Web app
  • Mobile app 
  • Mobile barcode scanning app

Want to learn more about CodeIT's input to the cloud-based inventory management system development project? Read the detailed case study.

Case study:


Cloud-based inventory management software is installed on a third-party company's remote servers. The five key characteristics of a cloud-based IMS are:

  1. Access via the Internet
  2. Vendor-managed infrastructure
  3. Top-tier security
  4. Seamless scalability
  5. Integrated tools and services

The usage of cloud-based IMS helps businesses spend money efficiently and eliminate upfront infrastructure installation costs. Also, it enables seamless system scalability, hassle-free server management, and software access from any location over the Internet.

Let's discuss your inventory management needs
What is cloud-based inventory management software?

The term cloud-based IMS defines software that is installed on remote servers. It can be accessed via the Internet from any location and device. Inventory data is stored on remote servers as well. A third-party vendor fully manages cloud-based servers.

What are the characteristics of a cloud-based inventory management software?

The key peculiarities of cloud-based inventory management software are:

  • Access via the Internet
  • Server is maintained by a vendor
  • Top-notch security and automated data backup
  • Easy to scale up/down
  • Integrated tools and services

What are the benefits of a cloud-based inventory management system?

The benefits of switching to using a cloud-based solution for managing inventory include the following:

  • Remote accessibility
  • Integrated tools and services
  • Vendor-managed infrastructure
  • Enhanced security and compliance
  • Seamless integration

The business benefits of using cloud servers include:

  • Cost-effectiveness
  • Seamless scalability
  • Improved collaboration
  • Effective risk management
  • Business agility
How do I develop cloud-based inventory management software?

The six steps of building a new cloud-based inventory management system from scratch are:

  1. Requirements analysis
  2. Planning and design
  3. Cloud provider selection
  4. Inventory management system development
  5. Testing
  6. Deployment

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