Cloud ERP VS On-Premise ERP

Cloud ERP VS On-Premise ERP: Which One Is Better?

Choosing the right software system for your business

Now you have started a business, employed staff, and you have been able to gain a few clients to startup with–but one thing remains to install into your business. The right software for your business–and of course! You would consider an ERP (Enterprise Resource Planning) system that would fit in perfectly for your organization. One thing you should ask yourself is, “Do I need an installed software solution, or I outsource with Software as a service company? Read on, and you would understand the difference between the two for a proper choice.

Choosing the right ERP software for your company is all about choice–it has to be fused rightfully with your company’s values and culture. If you decide to go with the wrong choice, it could destroy many things in the long run. You wouldn’t want that happening to your business. So opt for the right choice to avoid further problems that may arise because of going with the wrong software installation in your organization. The two software types that would be talked about are cloud ERP and On-premise ERP.

Cloud ERP

This is a solution that is hosted on an external server and accessed through a web browser. This solution also stores the data on the vendor’s server, not on your server. This is very important for flexibility and enables your organization to scale for maximum and exponential growth. Your data can be accessed anytime and anywhere, improving mobility costs for your team members and your organization at large. This type of service has a low cost of entry, and it is paid for monthly.

On-Premise ERP

They install this type of software locally–on a company server and computer. They are equipped to fulfill your organizational need and goals, making them highly customizable to fit into a company’s program. The On-premise ERP works especially; They charge you a one-time fee for perpetual licensing. But the downside for this kind of software is the high cost of maintenance and managing in-house server hardware and the IT team of professionals that will always oversee the company’s day-to-day activities.

So, looking at the two types of software systems, you acknowledge one is much more expensive to run and manage while the other has a low-cost operational fee. But, do not be too quick to judge and make a choice–as some companies would still prefer to choose the On-premise ERP system to the Cloud-based ERP depending on the type of work they do. Whichever one suits your organizational goals and culture is what you should stick to. Let’s look at some major differences between the cloud-based ERP and the On-premise ERP.

Cloud ERP VS On-Premise ERP
Cloud ERP VS On-Premise ERP

Differences between the Cloud ERP and On-premise ERP

The major difference between the cloud-based ERP and the On-premise ERP is the way they are being deployed and accessed. But there are basic characteristics  we’ve highlighted below for better understanding.

  1. The Cost and Time

The cost of running the On-premise ERP requires a higher investment upfront to cover all expenses before doing anything else. When looking at the cost of maintenance and management, the bills will always run up because of the cost and time managing such a system.

The cost of running the cloud-based ERP is low – being that the system is already set up and deployed on the cloud. All you have to do as a business is pay the subscription fee for both the hardware and software costs.

  1. Data security and Ownership

Using the On-premise ERP system gives you total control and power over your data in data security and ownership. But this stands to be at risk if it is not properly managed; it could lead to an attack being placed on your system.

In the cloud-based ERP, your data is hosted on the vendor’s cloud, which can be accessed through the web browser. To safeguard their data, companies would encrypt the access to enhance security.

  1. Integration and Scalability

With the On-premise ERP, it takes time to integrate into working with new versions with the existing version on the system. Most times, it goes void because the integration is not done well. But the best cloud ERP system takes total control over the integration.

 

In scalability, it depends on the flexibility of your business and the ERP system you are using. The cloud-based has a very flexible system, while the on-premise ERP doesn’t offer such flexibility. Most times, it requires added software to work with it.

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