Determining an IT infrastructure that fits your business is a herculean task. It’s never easy because there’s no perfect software. As you evaluate ERP systems, you’ll encounter two different deployment options: cloud ERP and on-premise ERP.
The cloud is basically a software hosting service, meaning a remote computer or server is doing the heavy lifting. The organization gets the end-product, without investing in expensive infrastructure. You can run powerful software in the cloud that would’ve otherwise taken a powerful in-house computer to host.
Cloud software architecture targets for maximum performance. As such, you can expect a smooth end-user experience. Cloud service providers also employ strict security protocols in safeguarding your data. They provide universal access, don’t require installation and are relatively simple to rollout.
Another option similar to cloud that you might consider is software as a service (SaaS), which is a type of cloud computing where you pay for access.
There are internal and external issues that can limit cloud applications. Cloud outage can be devastating if your organization requires uninterrupted access to customer information and financial data.
Security is another contentious issue for cloud applications. To your advantage, cloud computing makes your data accessible anywhere with an internet connection. To your disadvantage, it’s within reach of hackers.
With the number of cyberattacks recently, you may not be confident uploading business data on the internet. You may not even be confident trusting someone else with your data. However, it should be noted that cloud software providers are addressing this issue head-on, spending massive amounts on bolstering security.
As for external issues, your Internet connection will be a point of contention. No Internet, no cloud service. Furthermore, it may not be viable to run a performance-intensive application over the cloud. It would most likely mean you have to subscribe to a more expensive SaaS plan or internet package.
One other factor worth noting is that many cloud applications aren’t as flexible as on-premise solutions. If you depend on offering unique services, these cloud applications may seem rigid and not permit the flexibility your business demands.
Where Cloud and On-Premise ERP Meet
Let’s talk about the costs. Is the cloud as affordable as providers claim?
While you may not pay for new infrastructure or hefty licensing fees, SaaS subscriptions still command considerable costs. When compounded, the costs may equal what you would’ve spent on on-premise ERP.
There’s also data transfer costs, which is primarily about outbound transactions. Most cloud providers charge on a GB basis. If you regularly download documents, those are expenses on top of your subscription fee.
In the end, it’s not always an either-or situation. One platform doesn’t offer everything, while the other may be too expensive for SMBs (small-to-medium business). Convenience and streamlining aren’t the only things that matter, because you’ll be sacrificing an awful lot to possess these software qualities. This is why hybrid systems exist.
While each deployment model has its strengths and weaknesses, you must consider which best fits your organizational vision and objectives.
You can do is to confer with an independent consultant, like Panorama Consulting, to help you identify a suitable solution for your business. Let us advise you whether cloud applications, on-premise ERP, or a hybrid system works best for you.