Enterprise resource planning software has revolutionized the business world by providing simple and easy to access options for managing most of a company’s backend needs. This has made it easier to give employees the power to make changes to their information with less delay, it helps with process management and resource allocation. Most importantly, it puts all of your technological resources into one ecosystem, where they can cross-reference one another to increase efficiency even more.
Shopping for an ERP provider means understanding the key differences between different models and thinking for a moment about the ways those differences will create or eliminate costs and benefits for your company. There’s no one right way to set up enterprise resource planning for a business, but there are ways that are more or less effective for your business, and until you understand all the choices, it will be difficult to make a choice with confidence. Read on or view this infographic to learn more about the key differences between cloud and web-based ERP systems.
Cloud-Based ERP Systems
Cloud-based systems are praised for their ease of use and for the way they condense your expenses into a single line-item. They typically contain costs well, but their average monthly cost of operation is also frequently higher than the cost of various web-based systems. This higher cost may be offset by the fact that you do not need to buy any equipment other than workstation terminals to operate cloud-based ERP systems. That also means you do not have to worry about the electricity overhead, the staffing overhead, or the repair and maintenance budget they bring, but your business will not own the software or hardware. The cloud-based system is essentially a leased piece of technology that employees can access via the web or through terminal access at their workstations.
Web-Based ERP Systems
Web-based systems typically involve greater investment in resources like equipment, but not always. They have a one-time cost, though, so they might have a higher upfront investment that might have to be financed if the company lacks the ability to cover its cost from cash reserves, however there is no recurring subscription fee. The upside of a web-based system is that you have options concerning where you want to host it and how you want to control the data.
- On-Premises Systems involve a substantial investment in hardware resources and the staff needed to maintain them, but they come with the greatest amount of security, and the ongoing IT costs can always be folded in to other IT expenses if there are other in-house technology services. Similarly, if you already self-host any technology resources for other projects, expansion into self-hosted ERP is not as expensive.
- Third Party Hosting: This organizational method involves less up-front investment in equipment than an on-premises system would, but it has more recurring expenses over time since you will need your own IT resources to work with the software, updating it and maintaining it, and you will also have to pay for hosting.
- Vendor-Hosted Software: Some ERP providers include hosting for an indefinite period on their servers with the license cost. Depending on the provider, it may even be possible to find vendor-hosted software with automatic updates and other system maintenance provided.
The key to finding the right ERP software is looking at what your company’s current level of technology investment looks like and what resources you have and then finding the best solution for your overall bottom line. There’s no one system that guarantees the best performance or the lowest cost for everyone, so consider your options carefully.