If you want to implement ERP in your organization, you might be confused with the several choices available in the market. During the evaluation of an ERP, one of the key metric that should be consider is whether to select cloud based solution or on-premise one.
If you want to implement ERP in your organization, you might be confused with the several choices available in the market. During the evaluation of an ERP, one of the key metric that should be consider is whether to select cloud based solution or on-premise one.
One thing that keeps you in dilemma is whether to choose on-premise or cloud based solution, but aware this decision will show notable impact on your business process. These are few key metrics that you should consider when your decision juggles between on-premise or cloud based solution.
On-premise ERP usually needs huge investments to purchase and maintaining the software and the related hardware, servers, and facilities required to run it. You must have experienced IT team or else you should invest considerable amount of time and money to train them. Even more importantly your IT team should ensure your system is up-and-running daily basis, includes operational cost of hardware, server rooms etc. When it’s time to upgrade your existing ERP system, your IT department must redeploy the system across all devices and re-implement all existing customizations from previously installed system.
For cloud-based ERP, initial implementation cost is low and you can simply access it with your device through Internet. The cloud ERP provider hosts and maintains all of the IT infrastructure required to you, assure the system is always in-up & data is secure, and product new versions can be updated easily to your solution without compromising your existing customizations. Eventually, this triggers your IT team to focus on innovation and assist grow the company more effectively, instead of investing a huge amount of their time on maintaining and managing your on-premise ERP. Cloud ERP also presents pay-as-you-go subscription method that can make cash management and planning much easier.
If you observe the total cost of on-premise system with the cloud based solution , a technology consulting firm Etag found that cloud-based ERP solution will cost 55 percent less than the on-premise ERP for a 150 – employee based company in the scale of 3 years.
On-site solutions can be customizable, but those customizations are tightly integrated with existing software and you can’t be able to add existing customizations with future product versions easily and your IT department should start customizing from scratch again. That’s the valid reason for many organizations reluctant to upgrade their on-site solution and just settle with legacy system. In fact 45% of manufacturing companies using legacy systems because of the same reason.
In contrast, cloud ERP system will be easily upgraded by the vendor so you can use the current and modern technology available in the market easily. Notably your existing customizations can be reflected in the new product versions.
Cloud ERP efficiency is better than on-premise ERP. Cloud system can be adaptable to your market conditions and needs. If you observe sudden hike in your business, it can automatically adjusts resources based on the demand.
Cloud based solutions allows the users to access the real time data at anytime from anywhere, which is not possible in on-premise solution. A cloud based solution also ensures better security.
Each ERP Implementation consumes time and requires careful action plan. As cloud ERP needs no add-on hardware, you don’t need to invest time & resources to install IT infrastructure. By cloud ERP, it’s easy to roll-out across multiple locations and plants of your company.
Cloud ERP implementations to Go-Live usually take 90-180 Man/days compared to the 365 Man/Days that it usually takes to implement an on-premise ERP.
Cloud-based systems will give you the flexibility to add more users easily. On premise ERP needs additional hardware requirements to do the same.
Every company business process is unique and challenging to fit with any of the ERP available in the market .To know which ERP system will be best fitment to your particular industry have a no sales obligation consultancy from Etag Team.
