You’ve made the decision to switch to an ERP tool that can help you to efficiently and immediately access data and information, but now you need to decide where to store that data. Should you choose the cloud, or do you feel more comfortable storing all of your data on-site?
Your data is valuable. According to a Forbes article from 2018, there are 2.5 quintillion bytes of data created a day at our current pace, a pace that is only accelerating with the growth of the Internet of Things (IoT). It was also reported, though, that ninety percent of that data was generated between the years of 2016-2018, meaning that four years later, that statistic is probably much too low. You need your data to help your business to run smoothly, and you also need to protect it from those who would try to manipulate it. Therefore, deciding between cloud and on-premise deployment for your software is an important choice.
There are several things to consider.
Cloud ERP systems are deployed on servers managed by your ERP vendor or a third-party provider, such as Amazon or other well-known organizations. Essentially, you rent space for data and the provider is responsible for keeping it secure. Your organization will have access to the data thanks to the internet and a browser, meaning that any employees needing information will be able to access it from anywhere. A downside, though, is that the provider also stores data for other organizations. However, all data is kept completely separate.
With on-premise ERP, only your data is on the server. Your data is kept on your servers on your property. Your in-house IT staff members keep them running and manage security and backups.
When going the route of the cloud solution, you will pay, usually monthly, for the services provided to provide access to your software, to house your data, and to manage the hardware as well as the database. These payments will continue for as long as you are “renting” the space.
Alternately, the on-premises solution usually requires a one-time, upfront purchase as payment for the license for the ERP system. You will also pay annual support fees which cover further system development, upgrades, bug fixes, and access to software support help desk. In addition, you’re responsible to purchase the required hardware (servers and network equipment), you’ll be paying salaries for your staff to manage the system and database, as well as being greatly involved when upgrades are necessary.
Eventually, there may be a break-even point when the initial cost of the on-premise solution is cheaper than a monthly fee. However, other factors may not allow for that to be relevant. For instance, do you have room on site for these servers? Do you have an I.T. staff that can maintain them?
Customization and Integration
When using the cloud, customizations and integration of new technology may be more complicated. When new elements are introduced, new security must be introduced. Also, if your own IT staff is not responsible for maintaining the data, the third-party provider may want to provide the needed connections and limit outside links.
On-premise systems maintained by your own IT staff may be customized and accessible for integration, since the server is yours. However, it is important to point out that customizations may later require a good deal of reworking to the software, assuming they are compatible.
Due to the monthly fee you pay the vendor or provider, help desk support is readily available to you. Your ERP system will automatically keep your system updated to the current versions. It will also alert you to bug fixes and software improvements. Regularly updated copies of your data can also be provided to you for training.
With an on-premise ERP, assuming you have opted to maintain the annual support agreement, you still have access to bug fixes and other improvements. The difference in support is that your IT staff is responsible for loading those upgrades. Your team can select which upgrades will apply to your business and bypass ones that are irrelevant.
As you can see, dependent on your circumstances, either solution may be a great choice. It’s important to take note that this comparison is meant to be an objective look about the basics of data servers. To better understand these options, reach out to the consultants at Godlan. They can help you understand how each option can work with your ERP and serve your company well. For more information, visit www.Godlan.com or call 586.464.4400 today.