ERP Manufacturing Insights

The Benefits of Cloud-Based ERP

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The benefits of cloud based erp

When you’re shopping for the best enterprise resource planning (ERP) software, you’ll come across two deployment options: on-premise and cloud-based. Understanding the differences between Cloud ERP and On-Premise ERP and their individual benefits can help ensure that you get the best possible solution for your business needs, no matter your industry, budget, or operational goals. Since almost all of the top manufacturing ERPs offer both cloud and on-premise deployment, this will undoubtedly be a decision you have to make when you’re selecting new software. 

What Is a Cloud-Based ERP?

In short, a cloud-based ERP software, also known as a software as a service (SaaS) ERP, is an all-encompassing manufacturing software that is hosted on the vendor’s servers and is accessed via web browser. On the other hand, on-premise ERPs are integrated on your company’s servers and computers locally, so they require (sometimes costly) physical storage and ongoing maintenance. Generally speaking, on-premise software is paid through a large, one-time license fee, whereas cloud-based software is paid on a per-user, per-month basis.

The Top 5 Benefits of Cloud ERP Software

For the aforementioned reasons and those listed below, it’s unsurprising that cloud-based ERP implementation saw a 21 percent increase last year, according to a report by Panorama Consulting. Here are some more reasons why companies are racing to cloud-based solutions at a breakneck pace. 

More Affordable Up-Front Costs

The initial cost of implementing a cloud ERP software is lower than that of an on-premise software because it doesn’t require any additional server, infrastructure or hardware costs. Though you may pay more over time compared with an on-premise system due to perpetual licensing fees, you can expect what you’ll pay over the course of time and you get more flexibility should your system not meet your needs long-term.

Faster to Implement

Because these kinds of ERPs are web-based and require no lengthy, space-hogging installations, they essentially offer plug-and-play functionality. When you activate your license, you’ll almost always gain immediate access to the platform. It’s important to note that you’ll still need to spend time on training, customization and data transfer once you’ve chosen an ERP, but by and large implementation is speedier on the cloud.

Always Up-to-Date

Cloud-based ERPs are hosted on the web and therefore never need to be updated. Think of it like this: your browser-based Facebook page never needs updated, but your phone’s Facebook app occasionally does. On the browser, changes can be implemented in real-time, so you always get the latest version of the software without the need for time-consuming updates. 

More Flexibility and Access

Because of the fact that most cloud-based software is paid via a subscription-based model, it offers more flexibility in terms of growth and access. Need to add more users? Simply upgrade your subscription to include new licenses. No new hardware or installations are needed, even if you just onboarded several new hires. Need to access the software while you’re out of the office? Simply pull it up on any browser, mobile or desktop. Cloud services are always a premier choice for teams that need remote access and those that are rapidly scaling.

More Agility

We all know that for a company to be successful in the current digital landscape, agility is required, not optional. When you opt for a cloud-based ERP — or any cloud-based software, for that matter — you get next-level flexibility and analytics. This means you’re able to make faster changes in real-time to adapt to the ever-changing needs of your customers, clients or employees. The software itself is agile and constantly evolving (often, without you even noticing), much like your business.

When Is an On-Premise ERP Best?

For a good majority of businesses, a cloud-based ERP will serve every need and more. With that said, these systems do have a few drawbacks all businesses should consider. The fact of the matter is that though cloud software is actually very secure, your data is stored and managed by the software vendor offsite, so you have less control and visibility security-wise. You may also want to stick with an on-premise system if you want extra customization features or if you’re looking for the lowest long-term costs.

Still not sure which ERP is best for you? Fear not! Top 10 ERP exists for the sole purpose of helping match you with the right ERP, so feel free to reach out to us for expert advice, free demos and more.

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