8 Differences between on-premises and cloud ERP systems

On-premises vs. Cloud: 8 Key Differences

Choosing the right ERP deployment option can cause headaches, take much time, and put your business at risk. Check out Data V Tech’s eight significant differences between cloud and on-premises to ease your pain. With these insights, you can make an optimal choice for your business and avoid unnecessary disruptions.

Definition: on-premises and cloud ERP

On-premises ERP is enterprise resource planning software operating on in-house servers in a physical workspace at the locations under your control. Meanwhile, cloud ERP is a solution accessible over the Internet. The system can run on a cloud platform that belongs to your service provider or another third party.

8 Key Differences

Deployment

On-premises: The solution is implemented on the enterprise’s IT infrastructures, such as your computers and servers. The process takes place in-house. You can rely on your internal IT team or third-party support to maintain the ERP system.
Cloud: There are several cloud-computing forms, i.e., public, private, and hybrid clouds. Your service provider deploys the software on their server or a third-party server. They also take care of maintenance, upgrades, and other related processes.

Cost

On-premises: The initial investment includes the costs of server hardware, voltage management systems, HVAC systems, internet pipeline and cabling, and space to keep your IT infrastructures. The duration to establish all the equipment is also another cost to consider.
Cloud: The setting-up and running durations are relatively short compared to the on-premises option. The primary and long-term cost is the periodical subscription fee. Check your service providers’ pricing policies for possible price increases in the future.

Control

On-premises: On-premises deployment enables your absolute control over the system, including data. 
Cloud: There have been multiple measures to encrypt data. However, you might want to consider cloud outages due to the loss of power or network connectivity.

Security

On-premises: Some organizations, e.g., governments and banks, prefer on-premises ERP systems to ensure data security compliance. 
Cloud: Cloud providers have continuously improved and proved their platforms’ data security through various certificates. Yet, many people remain skeptical about giving another party authority over their data.

Compliance

Data policies vary between countries and regions. You need to consult with your legal department about regulations on authorship, data protection, and data sharing limits, among other issues.

On-premises: We highly recommend this option where strict data protection and privacy regulations are applied. 
Cloud: Numerous cloud ERP systems have reached specific data compliance standards. Check out their declarations on the subject matter for further information. 

Mobility

On-premises: On-premises ERP systems are remotely accessible. However, you might need third-party support, e.g., to install the software on a mobile phone. If you allow accessibility on personal devices, we recommend additional security measures.
Cloud: Cloud ERP systems facilitate work regardless of space and time. You only need an internet connection and a device accessible to the Internet. Mobility is one of the most robust features of cloud computing. 

Scalability

On-premises: On-premises solutions are scalable. Yet, you might need to invest in more IT infrastructures, such as some equipment mentioned earlier. 
Cloud: You can scale up very fast on a cloud-based server. The single significant change is an increase in the periodical subscription fee. 

Environmental impacts

On-premises: Modern software, such as Epicor ERP, aims to reduce costs. As a result, they increasingly apply AI in optimizing energy consumption regardless of deployment options.
Despite little discussion on on-premises ERP’s impacts on the environment, many corporates stay loyal to this non-cloud alternative.

Cloud: Cloud-based solutions are widely known for being environmentally friendly. Thousands of cloud users are believed to contribute to the global energy-saving efforts by sharing the same IT infrastructure. Indeed, your minimization of physical equipment certainly helps reduce energy consumption.

You can select on-premises ERP systems if absolute control over the system and data security is your most critical concern. Meanwhile, cloud solutions are ideal when you prefer more flexibility and greener operations.

Remember which option is more cost-effective hinges on the nature of individual enterprises, including their sizes and long-term growth plans.

Besides cloud and on-premises ERP systems, you can also request a hybrid alternative to leverage the pros of the solutions discussed above.

Content writer: Trang Vu

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Epicor Kinetic (ERP) is accessible on the cloud, hosted servers, and on-premises. It is flexible and personalizable to individual use, company practices, and multiple industries.

Data V Tech is Epicor’s Authorized Partner with over 20 years of experience in the Asia Pacific. We provide well-timed implementation with full support for software localization. As a one-stop shop, we offer complete solutions for manufacturing, trading, and distribution businesses, from mobile applications to e-commerce and direct machine data integrations to Epicor Kinetic (ERP) software.

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