ERP solutions: on-premise vs cloud the pros and cons

Posted by Tiffany Leung on 3 Sep

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Enterprise Resource Planning (ERP) systems are a fantastic tool for your business. From managing supply chains and production to customer relationships, product data and much more, they help keep your business highly scalable and industry-leading. In 2014, 69.1% of larger firms (1000+ employees) used ERP software, making it a popular choice. When choosing whether to have an on-premise or cloud ERP solution, there are some key factors you need to consider. Let’s take a look at the pros and cons of both options.

Cloud ERP - pros 

With a cloud ERP solution, your technical support will come from your provider, offering you reliable and high-quality services. If you’re operating outside of the standard 9 to 5, this could be beneficial with IT support on call when you need it. Additionally, using a company who specialises in ERP ensures your company has higher levels of IT security.

Furthermore, with a set subscription rate, there is cost transparency with cloud ERP systems, and you can scale them up or down with ease to suit your business needs. They are usually quick to implement too. These solutions are great for small or medium businesses with predictable cash flow and minimal IT infrastructure.

Cloud ERP - cons

There is less room for personalisation with an external service provider offering you an ERP solution. Some providers come with a set template to fit your business into, causing a hindrance to larger firms needing control over their productivity applications. So, if your company has niche or specialist requirements, it might be worth considering an on-premise or hosted ERP solution.

Additionally, with a cloud-based service, you lease rather than own the software, meaning you can end up spending more money over the system’s lifespan. You’re reliant on your internet provider offering a secure connection which is variable depending on your location. These are all factors you need to consider in deciding what kind of ERP you need for your business.

On-premise ERP - pros

If you’re a larger company with direct hardware control, then an on-premise ERP solution might be for you. In these systems, you store all the data within the organisation, which is great for sharing this information with other internal systems you may be running. If you’re dealing with sensitive information or are concerned with data protection, keeping this information in-house could benefit your business. In this line, they’re much more straightforward to modify, making them great for specialised manufacturers and unique production processes.

Plus, with one higher up-front cost, you could save money on monthly subscription fees in the long run.

On-premise ERP - cons

Unless you have sufficient on-site maintenance for your hardware and IT systems, on-premises ERPs can be costly in the long run. They require upgrades that you will need to carry out on-site, meaning that more significant investment up-front can come with additional costs you didn’t account for in initially.

Also, if you’re concerned about data security, then a cloud system might be better for you. With 4,500 successful attempts to hack small to medium-sized businesses in the UK every day, it’s something to bear in mind. If you are concerned with cybersecurity, ERP software might be more in line with your needs.

At WinMan, we offer ERP designed to support your optimal business processes and maximise profitability. Find your all-in-one ERP solution today by getting in touch with WinMan’s expert team.

>> See WinMan's ERP software functions here

Topics: ERP Software, Business Management Software, Business Efficiency, Productivity, Cloud ERP

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