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Cloud ERP Versus On-Premise Versus Hybrid ERP: Which is Right for You?

Cloud ERP versus hybrid versus on-prem

When it comes to the cloud, one option does not fit all. A good Cloud ERP provider will be agnostic about operating environments, working closely with you to analyze your needs, consider all available deployment options, and implement the best one for you.

Frequently, operating costs and implementation timeframes for the company decrease as the proportion of operational components managed by the cloud-solutions provider increases. So with that in mind, which cloud deployment option is best for you? Below are some options you should consider, with information about the implications (costs and timeframes) of each option for your business:

1. The Cloud ERP Option:

With the public Cloud option, IT resources are not made available internally, but are made available online by an external service provider. For example, companies lease the ERP system with the associated licenses and pay fees for the use of specific functional areas. You pay only for resources you actually use, so you avoid expensive, untapped capacity sitting around.

You might want to consider Cloud ERP if you need to deploy your new ERP system quickly

Software from the public Cloud is primarily a standardized solution that is shared equally between multiple users – thanks to dynamic management and the virtualization of resources.

Is Cloud ERP right for you

In a private Cloud environment, resources are dedicated to a specific organization and accessible only to its employees. This Cloud platform can be hosted and managed internally (using Cloud technologies at corporate data centers) or by third parties. This type of cloud computing delivers similar advantages to a public cloud, including scalability and self-service, but through a privately-owned/proprietary architecture. No matter what cloud service you decide upon, Cloud operators achieve economies of scale, which they can pass on to you in the form of cost (and timeframe) advantages.

Cloud ERP might best for your business if:

  • You’re looking for the lowest possible startup costs for your new ERP system
  • You need to deploy your new ERP system quickly
  • Your IT staff isn't up to date on the latest infrastructure technologies, security or backup systems
  • You want the flexibility and ease of use of an web-based interface
  • Your cash flow doesn’t allow you to pay a big up-front license cost, or you prefer a more consistent month-to-month expenditure
  • You have multiple locations that all need to use ERP simultaneously
  • You have a small or over-burdened IT staff
  • You need to integrate other web-based services or software
  • You can't afford to have a natural disaster like a flood, fire or storm, affect your up time

Cloud ERP in use in a warehouse

Maybe Hybrid ERP, which blends elements of Cloud ERP and On-Preimise installations, is the right option for you

2. The Hybrid ERP (part cloud, part on-premise) Option

A Hybrid ERP scenario combines the public Cloud and on-premise (more later on that) operating models. Companies continue to operate business-critical applications and applications that have very specific requirements or technical limitations, under their own control and in their own data centers, or in a private Cloud scenario.

Simultaneously, users can access other applications or application components from public Clouds, which helps reduce costs and implementation timeframes. Terms such as bimodal IT, which blends traditional and agile IT, are sometimes used regarding this hybrid approach. Implementation costs and time are generally somewhere between the Cloud (lowest costs and quickest implementation) and on-premise (highest costs and most time-consuming implementation) options.

Need help starting your ERP selection process? 
Dowload our Guide on How to Buy ERP in 7 Easy Steps

Hybrid ERP might be best for your business if:

  • You already have an on-premise ERP solution, but need to add some cloud features or mobile apps

  • You have one main location with several satellite branches or warehouses

  • Your staff needs mobile or web-based ERP apps to access their critical ERP functions on the go

  • Your ERP system needs to integrate web-based services or software

3. The On-Premise ERP Option

In this deployment model, companies run their applications on servers in their own data centers located on the company premises, or in a "private Cloud" – both under their own direct control. Software can be purchased or leased for a fee. In on-premise scenarios, the acquisition and operation of servers and storage, as well as the maintenance of software and hardware, are in the hands of the company, which obviously means higher investments (in cost and timeframes).

Make the most of Cloud ERP

On-premise solutions generally offer, and companies generally leverage, the capacity to tailor software to company-specific requirements. In the past, on premise used to be the most common approach to delivering and implementing business software, though that’s no longer the case today.

On-Premise ERP might be best for your business if:

  • You already have a robust IT staff capable of maintaining servers and enterprise software
  • You only have one location
  • Special regulations or compliance rules prohibit you from storing your data in the cloud
Which ERP implementation option fits your situation best - a Cloud ERP system, a Hybrid ERP solution, or an on-premise ERP solution? 

To answer this crucial question, Cloud ERP guideDownload the ERP in the Cloud guide or contact us to talk to an abas expert.

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