When you scale your business to a certain point, you need various software solutions to manage your operations smoothly. For example, enterprises use separate software for accounting, payroll, manufacturing, inventory, and customer resource management. However, it can get challenging to keep tabs on all these applications. Thus, it makes sense to graduate to an ERP solution that brings different applications together in a unified solution.
The term ERP arose in the early 1990s, with a direct connection to manufacturing processes. Since then, big manufacturers and other large enterprises have used ERPs to integrate a broad range of business processes.
Conventional on-premise ERPs required massive investment in setup and maintenance. But thanks to technological progress, ERPs have pivoted to cloud-based solutions. Let’s explore how conventional ERPs pale in comparison to cloud-based ERPs.
Downsides of an on-premise ERP
1. Requires a dedicated IT team
The primary difference between cloud and conventional ERP is that conventional on-premise ERP solutions are configured in your business’ local computers and servers. This means that you need to have a dedicated IT team to maintain the servers. Moreover, it’s your responsibility to constantly upgrade your ERP system to enhance its security.
You don’t need to face such hassles with cloud ERP solutions. Instead, the vendor bears the burden of deploying and maintaining the ERP solution. Moreover, the vendor is responsible for constantly patching the ERP to make it secure.
2. It’s expensive
On-premise ERPs have a reputation for being expensive. At first, you incur the upfront cost to acquire the hardware and software for setting up the system at your premises. Then you must pay the IT team for regular maintenance and debugging.
The cost is comparatively lower for a cloud-based solution as you can access it from your computer. All that you need is a stable Internet connection and a computer. As the ERP provider hosts and manages the IT infrastructure, you don’t need to buy fancy equipment to access the ERP. If you go with a cloud solution, you don’t need to incur the expense of having an IT team to look after the ERP.
A whitepaper by Netsuite compared the overall cost of ownership of cloud computing software to locally operated ERPs. The paper found that even if you increase the number of ERP users, still the overall cost is less with cloud-based services. The study revealed that in the case of 100 users, cloud-based options cost 50% less than on-premise ones. In the case of 200 users it cost 35% less.
3. Lacks accessibility
At a time when remote work is flourishing, it can be challenging to give access to users for on-premise ERPs. Cloud-based ERPs offer real-time data that can be accessed from any convenient device — be it a laptop or smartphone.
Moreover, as on-premise ERPs are deployed and customized locally, upgrading or integrating them with other tools can be challenging. Cloud-based ERPs are superior in terms of integration and scalability. They are flexible enough to integrate with the latest offerings, and the hassle of developing the integration is borne by the ERP vendor.
Try Cin7 to manage your business
We’ve discussed how on-premise ERP solutions are inflexible and expensive to implement. However, having a unified solution to gain visibility over your entire business operations can add a lot of convenience. That’s where Cin7 comes in. Cin7 offers a cloud-based ERP to gain visibility over your business processes.
As Cin7 is cloud-based, it can be accessed from anywhere, and the implementation cost is less than an on-premise ERP. Cin7 completely manages and updates the cloud-based ERP. The system also integrates with more than 700 business tools. Using Cin7 advanced configurations, our implementation team will configure Cin7 to meet your business workflows and unique requirements.
With Cin7, you can manage your production, inventory, warehousing, sales, logistics, and even accounting. You can easily integrate new sales channels and effortlessly manage them. Thus, you get better supply chain visibility and much-needed flexibility to outsmart your competition.With Cin7, you get real-time visibility of your inventory, which can help in timely purchasing and with evaluating performance. Cin7 allows you to automate sending your purchase orders to your suppliers, so whenever your inventory levels fall below a certain level, a purchase order is sent to the relevant supplier. Cin7 also comes with built-in EDI.
Cin7 provides a modern cloud-based solution at a fraction of the cost that must be paid for on-premise ERPs. Book a free call with our experts to learn more about our product.
