When considering a new enterprise resource planning system, you need to decide on whether to go for a cloud-based ERP or an on-premise ERP. Let’s lift the fog on a few of the main differences.
Cloud-based solutions have become increasingly popular in recent years. In fact, they’re now so popular that most ERP vendors are offering some type of cloud deployment in their services. A few vendors have even begun ditching on-premise services altogether, focusing instead on providing a comprehensive cloud-based ERP system for SMEs.
Despite the popularity of cloud ERP systems, there are still a few reasons why your business might choose a conventional on-premise solution. But how do you know which solution is right for you?
The pros and cons of on-premise ERP
ERP solutions that are deployed on-premise, comes with many similar features to that of a cloud-based system. However, there are a few components that differs between the two solutions.
We often see that on-premise solutions are easier and more convenient when it comes to initiating specific modifications. In fact, the ability to customize the system according to your company’s requirements is among the main benefits of an on-premise solution.
A prevalent issue, however, is the lack of mobile accessibility. A heavy and specifically tailored solution means that it’s often necessary to bring in a third-party in order to enable seamless communication between mobile devices and the ERP solution, thereby increasing the overall cost of the system. Given that mobile accessibility has become a significant form of system access, this can be a drawback for many ERP buyers.
While they are sturdy and reliable, an on-premise solution is not the right option for everyone – especially not as they often require a rather hefty upfront cost compared to its cloud-based counterpart.
This upfront cost can be risky for SMEs, especially when you add the additional software, storage room, IT costs and manpower it takes to run the solution daily. On the brightside, you’ll receive a solution which is more open to customization than a cloud-based one.
READ MORE: The Pros and Cons of Odoo ERP.
The pros and cons of cloud-based ERP
You’ve probably noticed that cloud-based ERPs are often considerably cheaper than on-premise solutions. This is arguably one of the main reasons behind its sudden increase in popularity.
But is it safe to store your sensitive data in a third-party server?
Plenty of security concerns have been linked to cloud-based ERP solutions. Recently, the concern for data security has slowly diminished as more reputable service providers have emerged on the market. These vendors are rather stringent when it comes to cybersecurity measures, and they have strict routines in place to ensure data security. To ease concerns, prospective clients can also opt for third-party security audits of the vendor in question.
Besides increased security, cloud-based ERPs often offer easy mobile accessibility, with many even providing native applications for Android and iOS. This enables you to have permission-based access to company data anywhere, at any time.
More accessibility often means less customization. Cloud-based ERPs are known to have less flexibility than on-premise solutions, which can be a drawback for companies with specific requirements. As SMEs tend to favour accessibility and cost over customization, this can often be more of a positive feature than a drawback.
Which ERP is right for you?
Well, that depends entirely on you.
On-premise solutions are strong and customizable, the perfect fit for any large organization with specific needs. However, they’re expensive and needs a certain level of maintenance.
Cloud-based ERPs, in comparison, are considerably cheaper, easier to maintain and with more accessibility. But they’re less customizable than their counterparts.
Your decision must be based on the requirements of your company. Which features matter to you? Which ones can you live without? Implementing an ERP solution is a way for your business to digitally transform and get fit for growth. Do you need a helping hand in choosing your next ERP? Get in touch with one of our dedicated ERP experts and redeem your complimentary consultation today.
What are you waiting for?