With the emergence of the Cloud as a viable platform for collaborating on business projects, older technology models and methods are fading into the distance. One example is with ERP software, which was once solely offered as an “on-premise” solution, but has now firmly entrenched itself in the Cloud. In fact, Cloud ERP software has become more popular than on-premise ERP software for a variety of different reasons. It’s no surprise that on-premise ERP software is dying a slow death.
ERP Software 101
ERP, or “Enterprise Resource Planning” software is business software that is used to store data on a common database, making information accessible throughout an entire organization. The main feature that compels businesses to purchase ERP software is its ability to integrate all transactions, across departments, with a single accounting core.
There are two basic types of ERP software; On-premise and Cloud ERP software.
On-premise ERP is physically installed on a company’s computers and servers, while Cloud-based ERP software is hosted on the vendor’s or a managed hosting company’s servers, then accessed through a web browser. Amazon Web Services (AWS) is one example of a secure, managed ERP host.
The Question of Security
When many people hear the word “Cloud”, the first thing that comes to mind is security. It’s easy to assume that on-premise software is more secure, but the way many major corporations are gravitating to the Cloud for ERP software shows that the security is more than capable. When it comes to the Cloud, professionally managed hosting providers often invest handsomely in resources and take extra measures when it comes to putting security controls in place. Today, many feel that Cloud ERP software even more secure than software installed on your own premises. With security concerns abated, on-premise ERP software is dying a slow death.
Pricing is one of the benefits of Cloud ERP software that enables many companies to use it in the first place. On-premise software is typically considered a capital expenditure as a large, one-time investment upfront, while many Cloud-based systems are available with monthly SaaS (Software as a Service) pricing, and can be classified as operating expenses. With a considerably lower entry cost and reduced spending required for IT maintenance, many smaller companies are able to get a Cloud ERP system up and running right away to help streamline their business processes. The huge up-front and maintenance expense of on-premise ERP is one of the factors driving it to its grave.
Mobility is another relevant element of modern computing, and Cloud ERP software delivers it much more seamlessly than on-premise software. Typically, on-premise software requires a third-party to communicate between the mobile device and the software, while Cloud-based ERP software makes mobility easy because it can be accessed from virtually any device.
One big reason that on-premise ERP software is dying a slow death is that it is more difficult to scale during periods of growth. Cloud ERP software can be upgraded quickly and new releases can be introduced much easier, without a great deal of expense. Forward-thinking businesses that have an eye toward growth find this benefit of Cloud ERP software just makes good business sense. And, should your business suffer a temporary downturn, Cloud ERP software scales down just as easily as it scales up: companies just purchase fewer licenses.
Following in Proven Footsteps
The old thinking that Cloud-based software and applications were risky propositions has been replaced with thinking of it as an opportunity to make your company better. Companies like Microsoft and Adobe have given up selling packaged and installed software, opting instead to lead the charge and show why Cloud solutions are far superior to their antiquated on-premise counterparts.
If you’d like to learn more about the benefits of Cloud ERP software, and how it can help transform your business, get in touch with us at ADS Solutions today.