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Benefits of an On-Premise ERP
 Benefits of an On-Premise ERP

Benefits of an On-Premise ERP System

ERP solutions may sound like something reserved for large companies, but despite the name, mid-sized business have a significant amount to gain from implementing ERP solutions. Fifty percent of companies implement ERP for cost-saving measures, while 21 percent of companies find ERP promotes business growth. After deciding to implement ERP within your company, you're often faced with the question of on-premise versus cloud-based ERP. While many companies immediately look at SaaS options, the on-premise solution also provides advantages.


Data control:

An ERP system deals with business information of all types. Everything from employee social insurance/security numbers, accounting and expenses, supply chain management logistics, and other business intelligence would provide significant value to outside parties. When you host your ERP on-premise, you control everything, including the security measures used to physical access control. You won't be left at risk because a workstation connecting outside the network to the cloud-based ERP is insecure, or an employee at the cloud provider jumped ship with as much data as possible.

Less vendor dependency:

While cloud-based solutions are often touted as being highly flexible, your ERP gets locked into many technology decisions made entirely by the vendor. This includes some very important issues such as upgrade cycles - which is of particular importance if your ERP system is integrated into 3rd party solutions, extended or is customized. ERP solutions are also often implemented for long-term periods up to 15 years. If the vendor goes out of business, you have nothing to show for it and a lot of scrambling to do to implement a new solution. On-premise ERP removes the vendor dependency, so you can change different aspects of the system as needed.

Limit on-going costs:

Upfront costs are sometimes higher with on-premise ERP, but the total cost of ownership is almost always lower for on-premise, as ongoing subscription and support services on the cloud add up quickly. Generally, the break even period is approximately 3 years between the two types of deployments, after which on premise solutions quickly become less expensive. For an on-premise solution, you get the upfront costs out of the way, and the only ongoing costs are expenses such as energy and IT maintenance. When selecting ERP solutions for your mid-sized business, look at the total cost of ownership instead of being put off by upfront costs.

Foundation for future hybrid cloud expansion:

Just because you implement in-house doesn't mean the cloud is completely off the table. When you start with a solid on-premise base, you can incorporate cloud components and applications as desired to fill in ERP gaps without compromising on critical issues such as security. You get the best of both worlds with this configuration, which is one reason why it's popular for mid-size and enterprise-level companies.

Easier customization:

While cloud solutions are excellent at integrating with certain third-party applications and software, they aren't so good at providing you with flexibility when you have your own customized solutions. Instead of throwing away useful applications tailored to your business, an on-premise system provides you with customization options for working these applications into your workflow.

Choosing an on-premise or cloud-based ERP solution isn't as simple as it may seem. It's important to consider many factors, from the security comfort level to the potential for customization, before making your decision. ERP solutions help streamline and automate many back-office business processes, allowing your mid-size business to operate efficiently, productively, and with a focus on current and future growth. Your ERP solution can be a primary driver of competitive advantage. Keep that in mind. 

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