Cloud enterprise resource planning (ERP) is a buzz in the information technology domain. Small and medium enterprises (SMEs) do not have the financial budget to invest in on-premise ERP solution. The use of cloud-based services for SMEs has led to widespread diffusion of technology. The two big stakeholders in the cloud ERP are cloud user and cloud vendor. This paper brings out the factors that are under the influence of these two stakeholders. Critical success factors that are influenced by the people in the organization are considered for the study. Compliance, network, and security are the concerns that are under the control of cloud vendor. This study shows the factors that have an impact on the successful implementation of cloud ERP. An online questionnaire was designed and data from 208 respondents belonging to SMEs were collected. Structural equation modeling was used for data analysis. It was found that people-related factors and compliance had an impact toward the successful implementation of cloud-based services. Network and security factors did not show any significant impact on the implementation of cloud ERP. Copyright (c) 2016 John Wiley & Sons, Ltd.