When it comes time to choose an Enterprise Resource Planning (ERP) solution, one of the most important questions to ask yourself is: How will I deploy it? Do I want an on-premise system or a cloud-based ERP? To fully understand the differences between these two deployment models, let’s take a step back and note some key differences.
Cloud ERP – also described as a Software-as-a-Service (SaaS) model, is provided as a Service that does not have to be managed or serviced by your company’s IT staff. With this type of software deployment, a company’s ERP software and its associated data/information are managed centrally (in the Internet “cloud”) by the software vendor and are accessed by users and customers using a web browser.
The cloud ERP provider hosts and maintains all of the IT infrastructures for you ensure the system is always running, that the data involved is secure and safe, and those product enhancements or upgrades are rolled out painlessly to your solution. Ultimately, this allows your IT resources to focus on innovating and helping grow the business more effectively.
Cloud computing architecture is designed from the ground up for maximum network performance, meaning cloud ERP tools can deliver better performance and better application availability than traditional on-premise ERP systems. And finally, since cloud ERP offers no additional hardware, the deployment time is way less than on-premise systems. Your business doesn’t have to waste time procuring and installing IT infrastructure, instead, you can easily roll it out across multiple divisions.
Some of the top benefits of cloud-based ERP solutions include:
- real-time analytics
- more informed (therefore better) decision making
- low operating costs
- service support
On-premise ERP solutions are installed locally on your company’s hardware and servers, then managed by your IT staff. They usually require a large upfront investment to purchase and manage the software and related hardware/facilities necessary to run it. Most people who prefer on-premise ERP tools like it because of the data security and control that comes with having the ERP system in the office. On-premise ERP software can also be customized much easier than cloud solutions, which offers greater advantage for more niche companies in specific industries.
Some of the top benefits of on-premise ERP solutions include:
- capital expenditure – meaning one large investment upfront (vs. cloud-based systems which are considered to be operation expenditure)
- data security
- more control over the implementation process
IES Internet eBusiness Solutions, a leading business software reseller, development, implementation, and business process consulting firm dedicated exclusively to Microsoft Dynamics, presents us with a short, 13-slide presentation discussing the benefits and possible drawbacks of cloud ERP vs. on-premise ERP in order to help you sort out the controversy.
Looking for more? Download our ERP buyers guide for free and compare the top-24 products available on the market with full page vendor profiles. The guide includes four key capabilities to look for in an ERP solution, plus five questions to ask yourself and five questions to ask the software provider before purchasing. It’s the perfect resource for anyone looking to find right ERP for their business/organization.
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