ERP solutions can offer great benefits to SME (Small and medium-sized enterprises) as well as established businesses if they can understand the importance of implementing them. Majority of the firms are investing in ERP software systems for business savings, whereas some are doing it for their business growth and improving productivity. Once you made your decision about implementing an ERP software in your organization, you face bewilderment for on-premise ERP versus cloud-based ERP.
An ERP system manages and handles all kinds of information including confidential one. Employee social security numbers, supply chain management logistics, accounting and expenses, and other business intelligence show meaningful value to outside parties. If you go for on-premise ERP, it will enable you to have a control on all kinds of confidential data and other things as well. For physical accessing control, you can implement security measures in case of on-premise systems. On the other hand, a workstation connected outside the network to cloud-based ERP is not secure.
On-premise ERP has higher upfront costs, but the total cost of ownership turns out to be less when you compare the costs involved in an ongoing subscription and support services on the cloud. For an on-premise ERP solution, you get the upfront costs out of the way, and the only ongoing costs are expenses such as energy and IT maintenance. So, it is important to clear about the total cost of ownership while choosing ERP solutions for your mid-sized business.
Even though cloud-based ERP solutions are impeccable when it comes to integrating them with popular third-party software and applications, they take a back seat in providing flexibility when you possess your own customized systems. Thus, go for an on-premise system for having customization options for including the apps as per your demand and needs.
When you select on-premise ERP, you have no dependency on an ERP vendor. It is upon you that what you need to do with your ERP system. In case of cloud-based solutions, several decisions related to technology are needed to be taken by vendors. ERP solutions are also often implemented for a long duration of up to 15 years. If the vendor goes out of business, you have nothing to show for it and will have to go through a lot of struggle to implement a new ERP solution.