An ERP system is a software tool that provides management of all enterprise resources. The main purposes of using such platforms are to automate business processes, coordinate the work of structural divisions and ensure interaction between them, promptly monitor the most important indicators of the company’s activities, and evaluate efficiency.
The modern world of the Internet and web technologies is impossible to imagine without the cloud solution. Online study, remote work, zoom meetings with friends. Large companies are transferring to the cloud ERP for the efficiency of all business processes.
Choosing between a cloud and local ERP deployment options can be challenging. In this article, we look at the key features and benefits of each type of solution to help you make the right choice.
Criteria for Choosing an ERP System: what’s the difference?
Cloud ERP solutions are a reasonable choice for most modern companies in the service and retail sectors. They provide flexibility and mobility, which is strategically important for business development and efficiency. Small companies and startups often prefer cloud solutions due to low initial costs and easy implementation. On the other hand large corporations with specific security and personalization demands often go for an on-premise ERP.
We have compiled the main considering factors on Cloud ERP vs on-premise ERP for you in a table below.
| Criteria | Local ERP | Cloud ERP |
| Total cost of ownership | High initial costs (CAPEX). Require large capital investments in purchasing equipment and software, as well as its support and updates. | Subscription fees (OPEX), initial costs are low. Usually have a flexible pricing policy, where payment is made only for the resources used. |
| Flexibility and scalability | High level of customization, but sensitive financial costs are required to upgrade hardware and software to expand functionality. | Provides broad opportunities to quickly scale resources depending on business tasks, allowing you to adapt to a changing business environment. Though allows limited customization. |
| Data Security and Privacy | Full control over data. High security. Requires your own resources and skills to ensure. | High level of security from providers. Less control over data. Easy access to advanced security technologies. |
| Accessibility and mobility | Limited to the company’s internal network. Requires on-site presence, which can be inconvenient for companies with branches or remote employees. | Accessible from anywhere via the internet, allowing employees to work remotely or outside the office. |
| Implementation speed and updates | Long implementation (from 6 to 18 months in general) and the need for manual updates. Dependence on internal resources. | Fast implementation, automatic updates managed by the provider. |
6 cloud ERP benefits
When switching to ERP in the cloud, users receive a number of significant advantages.
We have identified 6 main ones:
- Budget savings. The cloud version allows you to use the program without buying licenses and software – the company receives an official ERP system for rent. The cloud solution saves you from spendings on your own server capacity for data storing and ensuring fast system operation.
- Increased data reliability. Databases in cloud ERP are stored in Data Processing Centers (DPC) with different levels of protection (TIER). Unlike regular servers in offices, they can withstand heavy loads, are protected from hacker attacks, power outages and even abnormal weather conditions. Your data is saved in backup copies daily, which completely prevents the loss of important information.
- Remote workplace. Access to cloud ERP is available from any device: tablet, smartphone, laptop, PC. This provides flexibility in choosing the method and place of work. ERP in the cloud enables you to create and manage autonomous databases of different types and easily switch between them. The process becomes more convenient and transparent. For stable operation, the most common Internet provider rate is suitable.
- Technical support. Technical support for users is fully provided by ERP specialists and the company providing the cloud service. For example, our consultants are available 24/7 and start working at any time within 10 minutes after receiving the application.
- Flexibility of setup. The cloud system allows you to easily adjust the number of workstations depending on the needs of the company. You can pay an additional minimum amount for new employees, or reduce the budget when optimizing staff.
- Automatic updates. Service specialists ensure the relevance and security of cloud ERP, regularly installing updates for both the platform and the released configurations.
An individual approach to the optimal solution
ERP is a key tool for managing and optimizing processes in a company. The choice between a local and cloud ERP depends on many factors. Both systems offer unique business opportunities. Local ERPs provide a high level of data control, while among cloud ERP benefits there is quick implementation of new technologies. Take the time to carefully analyze your company’s needs and you will find the perfect solution to help you achieve your business’s overall goals.
