The adoption of an enterprise resource planning (ERP) system presents numerous benefits for a company, integrating the sectors and optimizing its management. Knowing all these benefits, you are eager to invest in an ERP system, but don’t you know which one is best? Choosing the right kind of ERP software for your company is rather a challenging task. At this time, it is very important to consider your needs and make the right choice. Among the many options available, one feature that may raise questions is the decision between a cloud or local cloud computing solution. Here are some advantages and disadvantages of each system to help you with this choice.
What is local or cloud ERP?
The basic difference between the local ERP system and an ERP in the cloud is very simple. A local ERP is installed on the company’s own servers and computers. In this case, the company is responsible for its management and maintenance. In the case of cloud ERP, the system is accessed over the Internet and paid on a subscription basis. The software itself is neither owned nor licensed by the end user, but is provided as a service. Cloud technology is a watershed in the ERP industry because it offers enterprise-class software at an affordable monthly price and greater flexibility. The type of ERP solution you choose will have a significant impact on your business. In the end, the functionality of the system is what determines which system you choose. Here are some considerations when choosing between a local or cloud-based ERP solution:
A local ERP typically involves larger investments to purchase and manage software and hardware, servers, and related facilities. This type of system also requires IT resources to keep the system running. The initial costs of the cloud system are usually much lower because there is no technical installation required. The cloud ERP provider hosts and supports, giving you all the IT assistance you need. Generally, these systems work for a prepaid subscription model.
Software updates for local solutions are not always straightforward. When it’s time to update your software, your IT staff may have to restore your custom settings and install a newer version of the database. This causes some companies to avoid updating their ERP software, rendering the technology obsolete. Cloud ERP solutions are automatically updated by the provider, so you’re always using the latest version. In the cloud, regular updates do not affect your customizations and integrations.
The security of the data in a local ERP depends on the procedures and equipment of the own organization, being it adopting protection tools in relation to virtual attacks and frauds in the system. You will also need storage for backups. In the case of cloud ERP, the system provider is responsible for security. These systems typically integrate recovery and backup services.
As mentioned earlier, cloud ERPs have an advantage over accessibility because they can be accessed at any time, on any device, as long as there is an internet connection. Although more laborious, you can configure remote access on local systems. This will require the installation of virtual private network (VPN) software on each device, seeking access to the ERP. If you have multiple offices or branch offices that require access to the on-premises ERP system, you may need to configure a secure WAN infrastructure.
The customization feature is easily available on a cloud system. You can choose the one that offers the best facilities and meets your needs and business requirements. You can also customize and integrate the local system, but this includes an additional cost, and requires rework in software development.