Traditionally, Enterprise Resource Planning (ERP) software’s were located on premises, that means that responsibility for purchasing, housing, and maintaining the software and all related hardware comes to the own company. Whereas cloud ERP is a software that is accessed through the Cloud using the Internet to access servers that are hosted remotely from your business locations.
Many small and medium-sized business (SMB) leaders aren’t thinking about what their on-premises ERP solutions cost the company. They have other more important financial issues to worry about such as the price of fuel, health care costs and tax increases. Except, if you really think about it, knowing the cost of your on-premises system is critical, especially if there are tools out there like cloud ERP systems that could save significant time and money for your business.
It is important for SMBs to know the hidden flaws about on-premises solutions. For example, who supports the system after the consultant has set it up? And how much does it cost for that support?
Here are some hidden costs that every small-medium-business executive should consider before buying or significantly upgrading an on-premises ERP system which will result in increasing your P&L balance considering following points.
- Support & Maintenance: In cloud ERP all the maintenance and its support work are covered in the regular subscription/maintenance charges, unlike on-premise ERP in which there is always an additional costing raised for all the issues to get resolved at every time apart from the regular ongoing support billings.
- System upgrades and updates: Talking about the system updates and its upgrades it is very difficult to handle the existing data and talking in the real sense it feels like a new and fresh implementation is started whereas in cloud ERP it is completely handled by the service provider vendor. The update is done in such a way that all the existing data and other stuff are untouched.
- Physical system (Hardware and extensions) Support: In the on-premise ERP for any business update or the enhancement in the system implementation partners or vendors directly clarifies that this will cost you some additional charges, but in the cloud ERP if the enhancement is something which will be helpful for multiple businesses then this enhancement is considered as the System update and it will be felicitated to you in the next system update without any additional costing or additional efforts. For eg. barcode scanning/printing or additional print options.
- No additional IT resources: For on-premise ERP there is must have an IT resource for maintaining the system activities, but in cloud ERP all the maintenance is handled by the ERP service provider company. You don’t need to have any additional resource to look around your system.
- Data backup: It costs money to store information, restore it or back it up. You don’t want to lose even a day’s worth of data. Buying a terabyte backup drive and plugging it into your basement server is just not going to cut it as a safe backup method.
So the conclusion is considering above points cloud ERP can save you both time and money and hence is an integral part of both small and large businesses alike to manage things better. Cloud ERP keeps provisions open for future growth of the company. In essence, it provides all the available options found in any legacy ERP solution and is way more advanced and is feature rich when it comes to keeping a real-time track of the ongoing business deals under one roof. The cloud based ERP solution will ensure the increase in the efficiency of the business at hand by leaps and bounds and would go a long way in ensuring a smooth running of the business.