If you’re considering an ERP system for your business, chances are you are becoming overwhelmed with the copious amount of options. As you consider the different possibilities for your business, one of the most imperative decisions that you will have to make is whether to select a cloud-based ERP solution or one that’s installed locally or (on-premise).
The basic difference between an on-premise ERP solution and a cloud-based ERP solution is that on-premise ERP solutions are installed locally on your company’s hardware and servers and then managed by your company’s IT team, while cloud ERP, which can also be referred to as Software-as-a-Service (SaaS) is provided as a service. With a cloud-based deployment, a company’s ERP software and its associated data are managed centrally (in the Internet “cloud”) by the ERP vendor and are accessed by customers using a web browser. If you have the ability to log into the Internet then you can access your data anywhere, any time via the cloud.
What many people do not know is that the type of ERP solution that you choose can have a significant impact across your business. Here are some key factors that you need to consider when choosing whether to use an on-premise or cloud-based ERP solution.
- On-premise ERP systems usually demand hefty upfront and ongoing investments to purchase and manage the software and the related hardware, servers, and facilities required to run it. On-premise systems require that your IT team spend a substantial amount of their time and budgets ensuring your system is up-and-running when you need it, including maintenance of hardware, server rooms, and more.
- Cloud-based ERP initial costs are usually much lower because you simply implement the software and then access it through the Internet. The cloud ERP provider hosts and supports the entire IT infrastructure for you, which allows your IT resources to focus on growing the business more efficiently. Cloud ERP also offers a pay-as-you-go subscription model that can make cash flow management and financial planning for your business much easier.
Solution Updates and Upgrades
- On-premise solutions do NOT have hassle free upgrades to the software. As your ERP provider releases new product updates and enhancements, your previous implementation customizations will be wiped out when you upgrade. Your IT team will have to start over and customize from scratch again. That’s the main reason that you hear of so many companies that avoid upgrading their on-site ERP software and just settle for running their business on out-of-date technology.
- Cloud-based ERP solutions are automatically upgraded by the provider, so you can be sure you’re always using the latest and greatest version of your ERP software. Some people refer to this feature as updates happen in your sleep because you do not have to worry about upgrades or product maintenance. In the cloud, your previously built customizations and integrations automatically update with the system and you do not have to rebuild or alter the application when the solution is updated.
Improved Solution Functionality and Accessibility
- A cloud-based ERP solution provides real-time data that can be accessed with the Internet anywhere, any time. This means that you can see accurate and up-to-date information on laptops, smartphones, and tablet devices while you travel or telecommute. Not only can cloud-based ERP provide better performance and accessibility, but better security as well. Many cloud-based ERP solution providers make securing their systems a top priority by providing strong, industry standard data security certifications such as compliance with PCI DSS and SAS 70 standards.
- Disaster recovery is also a big topic with choosing an ERP solution. With cloud-based ERP as long as you have access to the Internet you have access to your data. With on-premise solutions you cannot access your data unless you are physically in the office where your server is located. If there is some sort of disaster in your office like a fire and your server is destroyed then you lose all of your data.
- Cloud-based ERP does not require any additional hardware, so your business doesn’t have to waste time procuring and installing IT infrastructure like you would with an on-premise solution. Cloud-based ERP deployments typically take about 3-6 months compared to the 12 months that it normally takes to implement an on-premise solution.
Cloud computing is still a new concept and can seem like a bit scary. Many people are worried about the security of the cloud, but what they do not realize is that they may already be using the “cloud”. If you use online banking, then you are using the cloud. If you are using the cloud to handle your personal finances, then you can rest assured that the cloud can support your professional finances as well. Other cloud platforms that you may be using are most social networking sites such as Facebook, Twitter, Google +, LinkedIn, Instagram, and even email platforms such as Gmail. Cloud computing is the fastest growing technology in software. Don’t get stuck using old technology for your business financial management. If you are interested in learning more about a cloud-based ERP solution then contact us.