On Premise ERP

What is On Premise ERP?

Selecting and deploying a new ERP system is the best thing any company can do. If you plan to do this, perhaps you are stuck between on-premise and cloud ERP. We will discuss on-premise ERP as our main topic in this article. You will then use our information to decide if an on-premise ERP is the best choice.

Additionally, you will learn how on-premise ERP software differs from cloud ERP and off-premise ERP. In-depth knowledge about your ERP options will assist you in selecting the best business software for your needs. If you are ready, let us proceed to the next step.

Features of On-Premise ERP

Most ERP suppliers provide cloud deployment solutions. Hence, it is easy to think that on-premise ERPs have lost their meaning. It is not so because some SME companies still run these ERPs, and others want to install them. On-premise enterprise resource planning tools stay in an in-house server.

On-premise is a traditional ERP system offering less flexibility than any cloud-based system. By learning the features of an on-premise ERP platform, you can accept it or proceed with Cloud ERP.

  • Deployment – The software vendor installs the on-premise ERP on local servers and computers.
  • Pricing – The on-premise ERP system works under a perpetual license fee. The vendor determines this fee according to the company size and the number of software users. This software type is expensive because the company bears all maintenance and upgrading costs. It also does necessary pieces of training during the software deployment process.
  • Accessibility – On-premise ERP software is not accessible from anywhere via mobile devices. Communication can fail unless there is a third-party client to help connect a mobile device and the on-premise ERP software. Although a company can solve this problem, it is one of the disadvantages of this ERP type.
  • Modules – An on-premise ERP software platform will traditionally have different modules. The on-premise software system can be full of helpful features from accounting to warehouse management. That is the purpose of installing an enterprise resource planning tool anyway. If you do not add these features early, it will be harder to do it later. On-premise ERPs are inflexible and not fully customizable.
  • Maintenance – As on-premise ERP is in the company’s servers and uses its IT resources, the vendor does not maintain it. It is up to the company to employ professionals who can do software repairs, maintenance, and upgrades. Thus, on-premise ERP’s TCO (total cost of ownership) is higher.

Benefits of On-Premise ERP

On-premise ERP software is not so popular nowadays. Nonetheless, it has its advantages. First, the company has complete software control. It hosts the software in its servers and does not give any third party a chance to control or manipulate it.

Thus, it can use the best techniques to ensure robust software and data security. A legacy ERP is more secure than any cloud ERP. It also depends on cloud vendor and the service accessed hosting Cloud ERP. Moreover, IT professionals can customize the software based on the requirements and goals of the organization.

It can be the best software for organizations that run in less-crowded and unique industries. On-premise ERPs are perfect for large-scale companies with enough capital and a stable infrastructure to host, upgrade, and secure data.

Selection criteria for on-premise ERP

It seems that everyone wants a cloud-based ERP platform. However, it does not mean that all companies need Cloud ERPs. Some organizations can run legacy ERPs with some cloud software properties. When considering the best selection criteria, you should focus on the following:

  • Capital resources – Installation of on-premise ERP is a capital-intensive project. It should not surprise you that only companies with a robust financial foundation can install and maintain an on-premise ERP system. Additionally, a company needs a complete infrastructure system to ensure it can host, support, and protect its valuable data.
  • Carry out on-site upgrades – It is essential to assess your ability to maintain and repair your legacy software on-site. Again, you must employ the best information technology technicians to help the company run its ERP servers and other networks. It is an extra cost your organization should tackle.
  • Inflexibility – It is good to understand that on-premise ERP lacks flexibility. In other words, introducing a new product or service is not easy. Cloud solutions offer more flexibility and agility than legacy solutions. Hence, they can stop you from penetrating new markets and adding new channels. Most vendors provide a static on-premise ERP system, which is hard to customize.
  • Visibility – Can you handle limited visibility? The whole point of introducing ERP is to increase the real-time visibility of various business activities as they happen. Most ERP vendors providing on-premise software provide batch data rather than real-time data. Batch data slows decision-making because it is impossible to analyze the information as it arises.

FAQ

1. Difference between On-Premise ERP and Cloud ERP

The deployment technique is the main factor differentiating on-premise from cloud ERP. While the former stays in an internal company server, the latter remains in an internet-based third-party server.

Another difference concerns the upfront cost of setting up each ERP type. With on-premise, the upfront fees are high as the company provides the entire infrastructure and money to purchase the software license.

In contrast, a cloud ERP is a SaaS-based subscription software package. Lastly, the company maintains its on-premise software while the vendor upgrades and supports the cloud-based ERP solution.

2. Is on Premise considered Cloud?

Typical on-premise software works on a company’s server, not the internet. However, a company can choose a hybrid cloud solution by hosting a private server.

3. What is On-Premise vs. off Premise?

A software solution hosted in an internal computer server but getting support from a third party is an on-premise solution. A solution living on a third-party server and receiving support from another entity is an off-premise solution.

4. Is Private Cloud the same as on-Premise?

No, there is a difference between a private cloud and an on-premise server. A private cloud stays in an offshore location or internally within the premises. An on-premise cloud is usually within the business premises.

An on-premise vendor allows companies to host a private cloud in their internal data centers. Only one company can own and use a private cloud ERP and its infrastructural resources.

5. Is Cloud more secure than on-premise?

A cloud ERP solution is not as secure as an on-premise one. On-premise ERP is an internal solution with no interference from third parties. So, it is hard for anyone to tamper with sensitive data.

A cloud solution does not offer robust security because the software vendor maintains the software. Customers have no complete control of some of their data.