Why Choose a Cloud-Based ERP System Over On-Premises Software

As your business expands and evolves, you need powerful tools to help manage your growing operations. One tool you can look into is an enterprise resource planning (ERP) system. It provides a central platform for managing everything from inventory and purchasing to finance and accounting. But when it comes to ERP systems, you have two deployment options: on-premises software and cloud-based systems. Which one is better?

Today, we’ll make a case for cloud-based ERP solutions. Here are five incredible reasons a cloud-based ERP system may be the better deployment choice for your business.

1. Lower operational costs

Undoubtedly, one of the primary benefits of cloud-based ERP systems is cost savings. 

With on-premises software, businesses must invest in expensive hardware, software licenses, and ongoing maintenance and support. You may have to hire or designate an in-house IT team to manage the software and ensure its efficiency all year round. 

Cloud-based ERP systems, on the other hand, are typically offered as a subscription service, with no upfront investment required. This subscription model allows you to spread out the cost of the ERP system over time, reducing the burden of a high upfront cost. 

Additionally, cloud-based ERP systems typically require less IT support and maintenance. Often, the vendor is responsible for updates, backups, and security. That leads to significant cost savings that would be otherwise spent for IT staff to manage an on-premises system.

2. Better scalability

As your business grows and changes, your ERP software needs will evolve too. Say you’ve deployed on-premises software. Scaling it up requires hardware upgrades and configuration changes, which can be time-consuming and expensive. In contrast, cloud-based ERP systems can easily be scaled up or down as needed—with no hardware or configuration changes required.

Cloud-based ERP systems can also handle sudden spikes in demand more easily than on-premises software. This is particularly important for businesses that experience seasonal fluctuations or unpredictable demand spikes, as the system can automatically allocate or enable additional resources, tools, and features to handle increased traffic and workload.

3. Unparalleled accessibility

Cloud-based ERP systems offer unparalleled accessibility, allowing users to access the system from anywhere as long as they are online. It can be a huge advantage if you’ve employed remote workers who need access to the ERP system from different locations. On the other hand, on-premises software requires users to be physically present on-site to access the system. That can be inconvenient and limiting, especially if some of your staff work remotely. 

Plus, you can access cloud-based ERP systems from various devices, including laptops, tablets, and smartphones. That gives users the flexibility to work from anywhere at any time. This level of accessibility can improve productivity and collaboration, as your staff can access and update information in real-time—no matter where they are and which devices they use.

4. Enhanced security

Cloud-based ERP systems offer enhanced security features compared to on-premises software. Cloud vendors typically have robust security protocols in place, including firewalls, intrusion detection systems, and encryption, to protect customer data. They also have dedicated security teams to monitor the system and respond to security incidents.

In contrast, on-premises software relies on the security protocols implemented by the business itself, which may not be as comprehensive as those provided by a dedicated cloud vendor. So you must invest in security measures, including firewalls, antivirus software, and regular audits, to ensure your ERP is adequately protected from threats.

5. Rapid deployment

Lastly, cloud-based ERP systems can be deployed much more quickly than on-premises software. With on-premises software, you must invest significant time and resources into hardware setup, software installation, and configuration. This can take weeks or even months, depending on the complexity of the system and the size of your business.

Cloud-based ERP systems, on the other hand, can be up and running within a matter of days or even hours, as the system is already set up and configured by the vendor. This rapid deployment can be especially beneficial for businesses that need to respond promptly to changing market conditions or unexpected business opportunities.

Bottom line

In summary, many reasons can compel you to choose a cloud-based ERP system over on-premises software. Cloud-based systems offer cost savings, scalability, accessibility, security, and rapid deployment—all are significant benefits for businesses of all sizes. While on-premises software may be the right choice for some businesses, cloud-based ERP systems are quickly becoming the preferred option for many organizations today. If you’re considering a cloud-based ERP system for your business, you can have a sneak peek at its power, performance & benefits here at Kentro. Book a Kentro demo today.

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