You know how ERP deployment can improve processes within your supply chain, and the things to keep in mind when implementing an ERP system. But do you know if cloud-based or on-premise ERP deployment is better for your company or industry?
While cloud computing is becoming more and more popular, it is worth taking a moment to assess both options to determine what is best for you.
There are a lot of considerations when it comes to ERP deployment. Need for flexibility, security requirements, cost, and even accounting practices can influence which avenue you choose.
Here are a few things you need to keep in mind when deciding how to deploy your ERP system.
Cloud Implementation Strategies
The Cost of the Cloud
It is true that ERP in the cloud is more cost-effective to implement in the short-term. It eliminates the need to procure and maintain servers. Additionally, your cloud ERP provider will have its own team of IT technicians to ensure your system is running smoothly and your data is safe, which can save you time and money in labor costs.
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But it also requires ongoing subscription costs, which can entail high annual costs and hidden fees. Be sure to calculate the true cost of the cloud solution you’re interested in before you sign off on it.
Accounting for the Cloud
Similarly, your company’s attitude towards capital investments versus expenses can have a big impact on whether cloud implementation is right for your company. CFOs who want to minimize capital expenditures will be more amenable to cloud deployment than will CFOs who prefer to make a capital investment in servers, which can be depreciated over time.
It is a good idea to ask your CFO for their perspective before committing too strongly to one method or the other, as the balance sheet may have more of an impact on your decision than you realize.
How Much Control Do You Need?
In one way, cloud ERP software is very flexible and easy to deploy, because it only requires the click of a button rather than physically installing software on physical servers.