Cloud ERP vs On-Premise ERP

If you’re considering an ERP system for your business, one important decision you’ll need to make is whether choosing a cloud-based ERP solution, such as Oracle NetSuite, or a locally installed one works better for your business productivity. 

The key difference between on-premise ERP and cloud ERP is simple. On-premise ERP solutions are installed on your company’s software and are managed by your IT staff. Cloud ERP, also known as Saas, Software-as-a-Service, is a provided service; meaning the data is managed directly in the cloud by the ERP distributor and accessed by customers via a web browser. 

Ownership costs, system upgrades and enhancements, improved system performance, and deployment speeds are all crucial factors to consider when choosing between on-premise and cloud-based ERP software. Let’s take a deeper look to make your decision easier. 

Ownership Costs

On-premise ERP systems typically require substantial deposits and ongoing investments to purchase and manage everything needed to run the system smoothly.

Maintaining on-premise systems relies on organized time and budget from your IT team to ensure your system is accessible without a problem. Additionally, if your company lacks a large or experienced IT staff, you might also need to invest in additional personnel training. 

On the other hand, beginning costs for cloud-based ERP are usually much lower since you only need to apply the software to your requirements and access it through WiFi. Cloud ERP handles IT infrastructure, security, maintenance, and seamless production, which inevitably allows your IT team to focus on innovation and business productivity. Cloud ERP also provides a predictable subscription model that helps cash flow management and future financial planning. 

Overall, a study has shown that cloud-based ERP can be 50% less expensive than on-premise ERP for a 100-employee company over four years.

System Upgrades and Enhancements

On-premise ERP software is tied to your current software and can be customized, however, it can be challenging to re-implement with future upgrades. New updated from the ERP server can often erase existing customization, requiring your IT team to start all over again. 

In contrast, cloud ERP solutions like Oracle NetSuite are routinely upgraded by the provider, ensuring the customer always has the latest version. Previous customization and integration are automatically applied with updates, avoiding extra investments. 

Improved System Performance and Accessibility

Cloud ERP often outperforms on-premise solutions. Cloud ERP is specifically designed for maximum network performance, ensuring better application availability than regular on-site ERP systems. Oracle NetSuite is a great example, guaranteeing 99.5% availability for its customers over the span of 12 months and giving real-time performance information. It also offers real-team data access from anywhere via web connections. 

Furthermore, Cloud ERP offers and prioritizes better security. Providers like Oracle NetSuite cling to diligent security standards such as PCI DSS and SAS 70 compliance.

Deployment Speed

Regardless of which ERP route you choose, deployment takes careful planning, but cloud ERP offers a fast speed of deployment. With no extra hardware needed, your company saves time on IT infrastructure ownership and installation. Cloud ERP can easily be rolled out across multiple regions, divisions, etc., reducing deployment time. 

Cloud ERP deployment usually takes 3-6 months compared to the 12 months needed for on-premise solutions. It is also easier to scale, providing you the ability to add users as your company grows, impacting your business productivity. 

If more information on ERP deployment and how it will impact your company is needed, be sure to contact us.