TYPES OF SOLUTIONS
These solutions are accessed via the Internet and are paid for on a subscription basis. The software itself is not owned or licensed by the end user but is provided as a service – which is why cloud solutions are also known as Software-as-a-Service (SaaS).
Cloud technology is a game-changer in the ERP and accounting software industry. It suits many organisations because it offers enterprise-level software at an affordable monthly price and the flexibility to easily scale up and down.
This means the software is installed on a server physically located at the customer’s business premises. Most licenses are sold on a perpetual basis and are treated as a capital expense.
This is where the software is installed on a server hosted by a third party. It could be installed on a dedicated piece of hardware or on a piece of hardware shared by multiple tenants.
Sometimes with this deployment method the software is delivered to the end user on a subscription basis.
WHICH SOLUTION IS BEST FOR YOU?
Do you have an existing server?
If your server is relatively new and was a significant expense to your business then it would make sense to continue to use it and try to get a return on your investment.
If you don’t have an existing server for your ERP or accounting solution to run on then cost of purchasing and setting up could exceed $12,000-$20,000, depending on specifications.
Do you have a reliable internet connection?
Cloud solutions can remove the necessity for an expensive server but they do rely on a reliable internet connection for any users. Having the connection drop out periodically or having no connection for even one hour can affect productivity considerably.
Do staff members need remote access?
Cloud solutions offer unprecedented accessibility. This has huge benefits for team members who need access on the road. Having sales teams access inventory levels, images and sales history when they call into a client can not only boost sales but encourage customer engagement. Having a sales person remember which team their client supports in the AFL can go a long way to building bridges.
Other factors to consider include:
Upfront costs of on-premise solutions verses the ongoing subscription of cloud solutions.
Solution updates and upgrades
On-premise solutions tend to have more complex upgrade processes with remote login required in many cases. Cloud solutions can simply push out batches of updates.
Cloud solutions mean no issues with infrastructure if users, entities or modules are added. Ensuring your server has the capacity to grow with you comes at a cost.
Cloud solutions have a tendency to allow simple integration with other cloud solutions such as cloud CRMs, cloud data storage and file sharing services.
Having your data backed up in real-time and offsite has huge benefits. Cloud solutions lend themselves well to this. On-premise solutions will need to have services like this set up manually for them.
On-premise systems will have the database and software application housed on a server or servers located at the business’s premises. The ability of the server infrastructure to respond to increases in demand for processing power will diminish as it ages.
Ease and speed of installation
Cloud based solutions can typically be installed without the need for a technical consultant etc. On-premise will often require knowledge of SQL and networks etc.
Impact on IT resources
Cloud solutions have a far smaller impact on you’re your IT resources as there’s no server or major IT infrastructure to maintain.
For companies who regularly update their server infrastructure, the total cost of ownership of an on-premise solution will over time be similar to or greater than the sum total of monthly subscription payments for a cloud solution.
If a company stays with an old server infrastructure, then the long term cost of an on-premise solution will tend to be less over an extended evaluation period than an equivalent cloud solution deployment.