Choosing Between the Cloud and On-Premise
By Katie Foley
One of the most critical decisions in the ERP selection process is whether you want to deploy it in the cloud or on-premise. Cloud-based software is becoming more prevalent in the modern ERP world, with almost every ERP vendor offering a cloud-based deployment option. However, just because the cloud is popular doesn’t mean it’s the right choice for your organization.
Here’s a look at some of the factors in the battle between cloud ERP and on-premise ERP:
The cloud offers a cheaper upfront investment, which of course means less risk. Also, there is no need for additional hardware investments such as servers to store your on-premise solution. The downside to this “cheaper” monthly cost is that it adds up over time.
On-premise requires a larger upfront investment between license fees, associated hardware, and IT costs. However, over the long term this early investment may pay off.
Data security is in the hands of the vendor. This is great in that you don’t need to devote your IT team’s time towards data security. However, some organizations prefer to have total control over their business’ data and in that case on-premise would be a better choice.
This can be a double edged sword. It’s great that data security is in your own hands but if your IT team can’t keep up with the data security demands of an ERP system this could be a problem.
Although there is not usually as much room for customization, there is usually a shorter implementation time required for a cloud-based solution.
When it comes to on-premise ERP solutions, the implementation process is often longer, however the organization has more control over the process. There is also more room for customizations if that’s something your business processes require.
Our recommendation for choosing between cloud and on-premise is to list out your top priorities. For organizations with a smaller ERP budget, a cloud based option is a no brainer because of the low upfront investment. However, if customization is something your organization’s business processes require then on-premise is likely the better choice.