Understanding the difference between On-Premise ERP, Cloud-ERP and SaaS ERP

If you’re a key decision maker in your organization who has recently started planning to implement an ERP solution in your business, you might come across the terms On-Premise ERP, Cloud ERP and SaaS (Software as a Service) ERP. You would already know that all the 3 integrates all the essential pillars of your business. However, are you well-versed in the difference between them?

On-premise ERP vs Cloud ERP vs SaaS ERP

Without knowing the difference between the three method of implementation, you have no way of knowing which method of implementation will work for you. Choosing and successfully implementing the right ERP is not so easy. It can be complicated and confusing process to decide. Let’s fix that. Continue reading to understand the difference and how each one can benefit you. We’ve compiled the information so you can take better decision.

What is On-premise ERP?

On-premise ERP software are installed on your organization’s internal hardware and servers, and it is managed by your own IT professionals. Software license are usually a one-time cost, upfront purchase based on the number of modules and users who will be using the solution.

It includes optional software maintenance cost to the vendor to receive regular support and upgrades.

What is Cloud ERP?

The Cloud ERP software is hosted on the cloud in an offsite data center and your organization manages the software, including upgrades and other maintenance. It is similar to on-premise ERP deployed with the cloud-based technology.

The application is customizable, flexible and economical. But, IT infrastructure is entirely outsourced and need to rely on the service provider to install update, modify system features, bug fixes and to conduct regular maintenance based on the service subscription.

What is SaaS ERP?

SaaS ERP is a subset of the Cloud ERP, and the terms are sometimes used interchangeably. SaaS ERP is managed by the software provider and it typically runs on a multi-tenant system. In other words, all the vendor’s customers share one instance of the software and use the same IT infrastructure.

The SaaS ERP software doesn’t require you to hire any IT professionals to install or manage the software. It can be accessed or used by directly paying monthly or yearly subscription fees. The application can be accessed from anywhere through internet.

Benefits of On-premise ERP, Cloud ERP and SaaS ERP

Flexibility and Scalability

In an On-premise ERP, when you need to expand the storage and number of users, you can deploy additional hardware infrastructure based on your business growth. Whereas in cloud-based and SaaS based system, the subscription option need to be upgraded to scale up the operations to support your business growth.

Privacy and control

When the ERP is hosted On-premise, you have great control over physical access and can prevent accessing of your sensitive data from outside. In Cloud ERP and SaaS ERP, the service providers ensure the enterprise-level security, privacy and compliance.

Upgrades and Enhancement

Both the on-premise and Cloud ERP provides more options for customization of the application, and it can be tailored to your own business workflow. But, in SaaS ERP, the application is less flexible to customize the software to accommodate your unique requirements. The enhancements and upgrades are provided by the vendor and can be accessed based on the subscription levels.

Deployment Speed

Every ERP implementation takes time and resources. With on-premise implementation, the organization needs to handle the complete IT infrastructure. Depending on the required features, installation may take a little longer than usual cloud implementation. If you chose a cloud-based ERP system, your business doesn’t need to waste time on procuring and installing IT infrastructure, avoid associated cost, save significant time and rollout across multiple regions within 3-4 months. Whereas in SaaS, you can choose from the features the vendor is providing and get started using it without configuring hardware or servers.

Which ERP will be right for you?

The best ERP hosting is unique for each organization. Start by categorizing your goals to best understand which ERP hosting configuration is right for your business. Review the compliance and performance needs that your ERP system must meet to compare on-premise, cloud and Saas solutions.

Horizon EBS - an ERP of your choice can be deployed either on-premise or cloud based on your business needs. If you need to know more, you can contact us via email at sales@fit.ae or call us at +971 4 353 3727

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