4 PROS AND CONS OF CLOUD vs. ON-PREMISE BUSINESS MANAGEMENT SOFTWARE (ERP)

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Amongst the decisions to be made when choosing a business management software also known as ERP (enterprise resource planning) is, where will the system be hosted, is it to be hosted in the cloud or on-premise?

Irrespective of your choice, business management software (ERP) has created some type of level playing ground for both small and medium-sized businesses. In other words, they have a scalable tool that is used to efficiently and effectively run their businesses.

In the past, it was basically expensive and geared for large organizations, but cloud-ERP has changed the narrative. It is more common than before and it has seen more adoption, especially by small and medium businesses.

According to a report by Gartner:

·       About 50% of organizations have surveyed plan to move onto a cloud ERP system.

·       Service-centric industries, small and medium businesses are adopting cloud ERP.

All in all, it will be nice to do a review of both business management software to find out their pros and cons, so as to give room for a more informed allocation of resources.

PROS AND CONS OF CLOUD vs. ON-PREMISE BUSINESS MANAGEMENT SOFTWARE

1.  Deployment and Pricing

ON-PREMISE ERPCLOUD ERP
1.The ERP is basically on the company’s own computers and servers.The software is hosted on the software vendor’s servers.
2.The software is accessed through the organization’s server.The software is accessed through a web browser or application.
3.Its pricing is most times on a perpetual basis.The software is priced on a monthly or yearly basis.
4.It is costly because of the high initial cost of setup, due to purchase of hardware, assembling the right people, time-consuming, and so on.It is relatively cheaper to set up because of its pricing system. Mostly seen as SaaS (Software as a Service).

2.  Data Security

ON-PREMISE ERPCLOUD ERP
1.Data security is the responsibility of your organization.It is the responsibility of the software vendor.
2.It is considered more secured because skilled professionals deployed, maintains, and troubleshoot the software.You are at the mercy of your software vendor’s expertise and infrastructure.
3.Fewer security risks compared to cloud ERP.Security risks arise when employees access company files through their personal mobile devices. The files can be corrupted or the whole system to be hacked.

3.  Performance and Customization

Depending on your needs, performance is best with on-premise ERP compared to cloud ERP. A contributing factor to this is service outages and slower connections that can occur for organizations transferring large files.

In terms of customization, on-premise ERP gives you the flexibility to tweak the software to suit your organization’s needs.

4.  Implementation Time

Cloud ERP takes less time to implement compared to on-premise ERP, especially if there’s a lot of customizations to be done.

In conclusion, choosing your desired business management software (ERP) depends on what your organization wants to achieve. However, organizations using on-premise ERP are gradually shifting to a Hybrid system. This is when the organization buys a cloud server on a rental basis and deploys the business management software (ERP) on the cloud server. The cloud server is then accessed through a web browser or an application.

Tijani Olayiwola Ahmed:
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