Cloud ERP or On-premise ERP for E-Commerce

As you consider managing your e-commerce business functions within an integrated and centralized
system, you land up with a heap of choices for ERP software. Now the question arises – whether to
install on-premise ERP or a cloud-based ERP solution.
On-premise ERPs are ERP software installed locally in your organization using your infrastructure and
your IT department manages it. However, cloud-based ERP systems, which are also termed as SaaS,
or Software-as-a-Service, are managed centrally by the ERP provider and can be accessed using any
web browsers by users. Let us either look at some numbers and statistics to understand why one
should choose of the systems or move to cloud-based ERPs from the traditional ones.
According to Forbes, by the year 2020, almost 70 percent of software, services and
technology will switch to cloud-based
In 2018, the adoption rate of new customers choosing cloud-based ERP was 80 percent over
on-premise ERP
The rate of growth of investing in cloud computing has increased by 4.5 times in the last
decade
There are mainly two aspects, which clearly helps you differentiate between the two – type of
deployment and pricing. Some of the other key factors you need to take into consideration whether
to use on-premise or cloud-based ERP software is mentioned below:
Cost of Ownership
On-premise ERP system is charged as a one-off license fee by the service providers. Additionally,
they need a large investment for setting up a dedicated infrastructure to manage the software,
hardware, servers etc. You will have to bear the cost of hosting and maintenance. The IT team in
your organization has to be trained to maintain the system on a daily basis. If your company does not
have an IT team, you might as well have to invest to hire one. In the case when the ERP system
needs an upgrade, the IT team should be capable enough to redeploy, customize and integrate with
your existing systems at no extra cost. On-premise ERP is typically considered as a capital expense.
Cloud-based ERP systems are relatively less expensive. The initial cost is lesser than that of an onpremise
one as all you need to invest is on the software and a few computers with a strong internet
backbone. All other infrastructure requirements such as hosting are provided by the cloud-based ERP
provider. There is no need for an IT team in your company as once the system gets running, the
provider will maintain it and will ensure that data is secured or other daily operations are executed
smoothly. Cloud-based ERPs mostly offer pay-as-you-go subscription plan as per your number of
users. This helps you manage your cash flow and reduce unnecessary investments. Thus cloud-based
ERP is typically considered as an operating expense and it can be as much as 46 percent less
compared with an on-premise ERP system.
www.i95Dev.com | USA | Australia | India | Copyright © 2019. i95Dev. All Rights Reserved. 2