Cloud ERP vs On-Premise: What’s the Right Choice for SMEs?

Thinking about implementing a new Enterprise Resource Planning (ERP) system? Choose wisely.

Selecting a cloud ERP suite or an on-premise system is the most crucial decision that can make or break your ERP game.

In a survey of IT decision-makers, 53% claimed that cloud ERP was an investment priority. In fact, in recent years, there has been a visible shift where companies prefer SaaS and cloud ERP compared with using on-premises systems. So what’s the right ERP system for your organization–a traditional on-premise system or a cloud-based one? Let’s look at each of these in the sections below.

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The Key Differences Between Cloud and On-Premise ERP Systems

Understanding the key differences can empower decision-makers to make an informed choice and drive productive business’ outcomes. The primary difference between both lies in recognizing how they are deployed.

3 key differences

 

The Advantages and Disadvantages of a Cloud ERP Suite and an On-Premise ERP System

The Takeaway

The final verdict? 

On-premise ERP systems have always been a popular choice among organizations. However, cloud ERP is starting to gain momentum due to several factors, including:

  • Better ROI and reduced costs due to availability of pay-as-you-use subscription model, which eliminates budget planning unpredictability and reduces chances of hidden costs
  • Faster issue resolution as experts handle the software (as opposed to the organization)
  • Improved business intelligence due to access to analytics-driven insights that pave the way for powerful decision-making
  • Effortless and faster deployment as traditional on-premise systems may take up to 12 months to be fully operational whereas, cloud-based systems can be deployed in three to six months
  • Universal data accessibility, encouraging collaborative working on-the-go
  • Faster decision-making–encouraging time savings 
  • Strong data protection and lower chances of data duplication
  • Enhanced data visibility in real-time
  • Access to rich integrations and customizations leading to improved business outcomes

Needless to say, cloud ERP systems are a better, cost-effective, scalable and agile alternative to traditional ERP systems. To make the most of the cloud-based ERP software, businesses should automate processes on the cloud ERP system to avail the following benefits:

  • Organized data: A completely paperless option, automating the ERP process makes the enterprise’ data entry structure more efficient and organized.
  • Improved productivity: ERP can integrate isolated business processes, ensuring error-free and accurate data devoid of duplication and discontinuity.
  • Cost-efficiency: Deploying an automated ERP system enables organizations to prevent expenses on data correction as the data is not entered manually.
  • Real-time access to process reports: Automated ERP systems provide access to high-quality reports on business performance and empower leaders to drive business processes in an informed and organized capacity.

A cloud-based ERP system is well worth the investment, as it enables organizations to perform better, move with increased flexibility, and drive a collaborative working style that contributes to peak levels of business performance. SMBs that invest in the cloud, automated can see at least a 25% growth in revenues and up to 2x increased profits, according to researchClearly, automated cloud ERP is the logical and most profitable way forward for growing businesses looking to solidify their growth.