Economic Arguments For Cloud-Based ERP

Cloud-Based ERP

If your business has reached the point where an ERP system is necessary and it’s time to decide which type of implementation is best for your business, there are a lot of factors to consider before taking the plunge. The two main discrete options for an ERP implementation are either an on-premise or cloud-based solution. On-premise solutions are privately hosted on your own local servers and network and managed by your internal IT resources.

Cloud-based ERPs are hosted online and the data, security, and infrastructure are all managed off-site and the system can be accessed from any location with internet access. Between uptime, security, accessibility, standardization, customization, and updates, both options have their benefits and drawbacks. But when it comes to cost, cloud-based ERP systems can have quite the advantage over on-premise solutions. Let’s take a look.

Lower Cost of Ownership

An on-premise solution has many costs associated with it that are at least partially absorbed by a cloud solution. On-premise ERP systems often require a large up-front purchase, the time and focus of IT staff, the cost of hardware, customization, training, maintenance, security, upgrades, and the general overhead to keep the lights on and your system running. Cloud ERP systems, on the other hand, are priced on a monthly or annual subscription that can take the pain out of the initial costs of implementation. This leaves a business with the freedom to cancel or choose a different level of service if necessary.

No Cost to Upgrade

Upgrades and patches, in general, can be costly and time-consuming. Where a cloud-based system comes with automatic updates, an on-premise system will require you to allocate the time of your IT staff to deploy the update in-house. A cloud-based ERP system provides you with the ability to redirect staff to focus on areas that bring the most value to your business.

Because these updates are online and automatic, and you are effectively subscribing to an ERP service versus purchasing the system up-front, you are not responsible for the cost of upgrades. Where upgrading an on-premise solution may require scheduling to meet budgetary needs and therefore leave valuable features waiting on the table that could benefit your business, a cloud solution offers these at the moment they are available, automatically and free of charge. This results in greater system stability and better opportunities to grow your business.

No Software, Security, or Hardware Maintenance Costs

When it comes to your business, security is paramount. With an on-premise solution, data is the responsibility of the organization. And it can be costly to maintain cutting-edge electronic and physical security layers.

In addition to security costs, an on-premise solution carries with it the cost of hiring an installation expert and purchasing enterprise-grade servers, operating systems, databases, and backup systems to support those servers. A cloud-based solution takes on these responsibilities and leaves your business more secure and less liable for the financial burden of additional maintenance and infrastructure requirements. A hosted solution also combines many of these costs at a lower overall rate. Most notably, cloud ERP provides your business with the ability to only pay for only what you need, whether it be number of users or amount of digital storage space.

Response to Business Needs

A cloud-based ERP system allows members of a business to communicate information in real-time, all the time. This improves collaboration and allows your business to adapt to any number of situations.

The standardization of a cloud-based ERP system means a reduction in time spent reconciling data, converting information, and bridging gaps between different systems at different locations. Whether it be customer questions or concerns, a need to adjust a line of supply to meet demand, vendor issues, or any other everyday requirement, a cloud-based ERP system can help provide clear, accessible, continuous communication.

Faster to Deploy Means Improved Time to Value

With an out-of-the-box solution, your business will spend less time on selecting the appropriate hardware, negotiating IT capacity, deploying software, training employees, and making the back-end adjustments and customizations necessary to ensure your solution is up to snuff and ready for business. A cloud-based ERP system means you’re up and running in no time, which reduces the often prohibitive costs of ERP implementation that can leave businesses pushing back their purchase and losing out on improved efficiency across all departments.

Guaranteed Uptime

 

Anyone who has had their servers go down knows that it can lead to a significant financial hit. On-premise solutions leave the business in charge of ensuring uptime and keeping IT staff on call in case of emergency. In addition, network and system downtime can cost a business much more than simple dollars per hour. It can also impact the reputation of a business, and leave doubt in the minds of consumers as to whether the company they are investing their time and money in is dedicated to running a reliable business. With around the clock technical support, cloud-hosted solutions mean no scrambling to find someone who is still in the office to handle a system issue, and no expenses for additional IT and other employee hours or replacement of hardware or software infrastructure.

The crucial decision in choosing the best ERP for your business should not come lightly. Managing your ERP on-site versus opting for a cloud-based solution brings with it many separate decisions. But when it comes to comparing the costs of each implementation, one can find a great deal of financial value associated with a cloud-based ERP deployment. These include faster time to value, low cost of ownership, quick and painless upgrades, and a lack of hardware, security, IT support, and maintenance costs. All of these benefits can help you and your employees focus on the big-picture initiatives that keep your business moving forward.

By Aaron Continelli

Dental Teeth Iot

The Revolutionary Transformation In Digital Dentistry

Transformation In Digital Dentistry 3D printing has taken the field of Dentistry by storm. This additive manufacturing technology has gained enormous popularity due to its many advantages, especially the ability to produce highly personalized prosthesis ...
Deepak Jayagopal

Leveraging DevOps Infrastructure as Code to Improve Cloud Provisioning Time by 65%

Improving Cloud Provisioning Time Infrastructure provisioning used to be a highly manual process for Digital Service Providers (DSPs). Infrastructure engineers would rack and stack the servers and will manually configure them. Then they will install ...
Karen Gondoly

Lessons Learned When Moving to the Cloud

Moving to the Cloud Lessons At Leostream, we work with organizations around the globe that are moving workloads to the cloud. These organizations span a wide range of industries, vary in company size, and typically ...
David Friend

Cloud 2.0 will not be Ushered in by AWS or other Cloud Giants

Cloud 2.0 Trends Amazon, Google, and Microsoft are all pursuing similar business strategies: they want it all. ‘It,’ in this case, means the entire IT infrastructure in their cloud. Furthermore, they want you to buy ...
Fig 2

Leveraging machine learning models for predictive maintenance of network services

Leveraging machine learning models As per lightreading's service assurance and analytics research study conducted with 100+ network operators and service providers, nearly 40% reported that issues around service assurance as a massive challenge. Service assurance ...
Bittitan

Episode 6: Cloud Migration: Why It’s More Important Than Ever

The Importance of Cloud Migration Moving fully to the cloud is still a concern for many companies, but with millions of employees working from home, there’s an even greater need to migrate. Mark Kirstein, VP ...