The Pros and Cons of Cloud ERP over On-Premise ERP

Enterprise Resource Planning (ERP) is a vast domain which encompasses numerous modules such as inventory management, product planning, sales, marketing, shipping, and many such functional areas of a business. Since ERP deals with an enormous amount of data, the question of where it would be stored and accessed from arises. Many organizations choose to keep data at a physical location, i.e. on their premises which can be easily accessed by them. This gives them more control over the data.

However, there has been a gradual shift in how companies are handling their ERP systems. They are moving their data to the cloud and finding it a lot easier to manage than traditional ERP systems. There are, of course, apprehensions when it comes to managing your data on a server which isn’t controlled by you. Nevertheless, cloud ERP is becoming more relevant and apparent.

To understand why cloud ERP should be preferred over on-premise ERP, take a look at the benefits it offers.

1. Better security: It is difficult to trust a third-party to keep your business data secure. But as organizations began to embrace it, they understood cloud vendors use state-of-the-art technologies and tools when dealing with sensitive data. They also offer enhanced security by regularly testing and patching systems.

2. Greater scalability: You can easily scale ERP services on the cloud no matter you grow or downsize the business. All you have to do is deal with the license size which can be increased or decreased as required.

3. Cheaper: Upfront, the investment in cloud ERP is cheaper than its on-premise counterpart. You also do not have to invest in extra hardware such as servers to store data.

Despite these advantages, cloud ERP has a few drawbacks.

1. Less customizable: Cloud ERP systems are handled by third-party vendors and hence are not easy to customize. Thus, its implementation time is reduced.

2. Associated costs: While the initial investment in cloud is cheaper, associated costs over the system’s life cycle may be more.

3. Data control: Your data is in the hands of a vendor rather than someone from the organization. Thus, there still some skepticism when it comes to cloud ERP.

With ERP on the cloud, the benefits outweigh the drawbacks. But, it is imperative you choose the right fit for your business based on your specific requirements. Reputed vendors of ERP software in Singapore will partner with you and provide the necessary support and maintenance of your data storage solutions.