Cloud ERP vs On Premise ERP - Advantages and Disadvantages

SME companies are beginning to revitalize their IT strategies moving forward. Gaining an edge over the competition, while remaining fiscally prudent has become a necessity. IT strategies are one place many companies and their financial executives aim to save the big bucks. Cloud computing has gained massive interest among SME companies for its versatility and overall impact. Yet, certain companies still stick with their On Premise ERP and are conveniently pleased with its work. It is time to assess the pros and cons of each in relation to their impact on SME companies.

Cloud ERP

Let's begin by sifting through and assessing the pros related to cloud computing. Does it hold the overall advantage that many companies are proclaiming? Is it an excellent idea that is difficult to implement? The pros begin with the lack of maintenance required to keep it running. Many financial executives are seen drooling over the prospect of saving money that has gone into IT strategies in the past. This money can be reinvested into other aspects of the business and lead to growth. All server maintenance issues related to the business are handled by cloud computing services.

Cloud ERPNot only is maintenance handled when something goes down and issues arise. A lot of office space will be saved in the short and long-run. Servers that were being carried on premise are now shifted into cloud computing and away from the building. This is one of the biggest positives involved with the entire concept. Utility bills will often begin to rack up with on premise ERP and this is not the case with cloud ERP. Electricity will not be reserved for servers in the office because there are no servers to take care of. Everything is done through cloud computing and this is a major plus point.

Monthly expenses are easier to handle than an initial cost involved with setting up multiple servers. The office has to be equipped with these servers and other related equipment right away. This is tough for SME companies that are tight on their budget, but know a decision has to be made. Cloud ERP focuses on ensuring all expenses are paid on a monthly basis. This is much easier to handle for all parties involved and will lead to better cash flow in the end.

The cons involve long-term expenses. This is an issue that continues to plague cloud computing in front of On Premise ERP. Since, the monthly payment will continue to happen, the chances of saving long-term funds become minimal. Sure, the initial investment will be higher with On Premise ERP, but it usually makes up the difference in the end.

On Premise ERP

Let's turn our focus to the other contender that continues to show up in SME companies. The On Premise ERP has been around for a long time and continues to be loved by many companies. It is a more 'traditional' method of handling IT strategies and has proven to be effective.

The pros of On Premise ERP begin with the idea of nothing being leaked outside company walls. There is a lot of secure data saved on these servers and most companies do not want them going into the wrong hands. Of course, with the In House ERP, all data remains as secure as possible as it is guarded by the company. As long as the company is able to trust its security processes, the data will remain safe. This is one of the largest concerns with cloud computing as the safety of the data is not as guaranteed. Many developments are occurring with cloud computing and changes are being made in regards to security.

On Premise ERPThe data is always nearby and in control of the company. Many companies will require immediate access and there is minimal delay with the On Premise ERP. This is a huge deal for SME companies that are continually dealing with their data and want constant access. Cloud computing will provide immediate access, but it is not as local as one would want it to be.

The cons associated with On Premise ERP can be highlighted back to the positives associated with Cloud ERP. The costs are heavy during the initial stages and no one wishes to deal with those early on in their venture. There are a lot of maintenance fees involved in the process that can be avoided through implementing cloud computing.

Concluding Thoughts

In the end, the option lies in the hands of the financial executives of each SME company. Are they willing to go with cloud computing or want to stick with the tried and tested method? Each method has its own pros and cons that continue to be brought up in debates. It is best to focus on the company's needs and wants before progressing forward.

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