Cloud creates an impression that it is a distant service, delivered over external networks to one's business. This is not entirely true, the cloud itself is a far wider concept, involving the very nature of how applications are built and operate.
Bernard Ford, One Channel CEO
Cloud is significantly more powerful, efficient and versatile than traditional systems. Most cloud services use a model where the subscribing business accesses applications across an internet connection.
However, cloud systems can work on-premise as well, providing they were designed for that purpose. One has a choice between a remote cloud service and one that operates within one’s business.
The real value of Industry 4.0
The real value of the Industry 4.0 revolution is not just being derived from networks and ad hoc services. Those can play an important role. But the true potential of these technologies is their ability to scale, the ease of accessing and using them, not to mention better management of costs.
A modern cloud ERP system, engineered for both online and on-site deployment, can offer all of that. This is a critical choice, particularly around a core business application such as an ERP. So how can companies make a confident decision? Let’s explore the two sides:
Shed the old technology
Avoid hefty infrastructure investment, it is time to shed the old technology and refresh the company’s infrastructure. But this is expensive and very hefty in up-front costs, requiring a lot of motivation for an appropriate budget.
A hosted cloud ERP sidesteps this almost completely, switching operational expenditure into capital expenditure. Investments are much easier to motivate and spending can be brought down to per-user or even ad hoc usage - without necessarily spending a cent on new servers.
Scale ERP in a fast-growing environment. On-premise, even a local cloud instance, is a magnet for complexity. That can be advantageous, but in many scenarios, it is unwelcome - especially in fast-growing businesses where stretched budgets and thin resources weigh heavily on forward-planning.
A hosted cloud platform can easily enrol or remove users as needed, with only the cost of adding and maintaining them. Also to this point: hosted cloud ERPs are faster to deploy than on-site cloud ERPs.
Many of today’s employees don’t follow the job, the job follows them. While on-premise cloud platforms can still reach those people and their devices, it requires a rock-solid network complete with thorough security and redundancy measures. A cloud host often does a lot of that heavy lifting, making it far simpler for the right information to reach the right people on the right device.
On-premise Cloud ERP provides more control
Using a hosted cloud ERP means company data will at times reside on off-site on third-party servers. Providing one scrutinises their credentials, certifications and one deploys secure data management/regulation systems, that shouldn’t pose any problems. But an on-site cloud ERP solution gives considerably more control over company data.
Furthermore, shedding legacy systems is often a motivation for embracing a remotely hosted cloud platform. But one may still have assets to sweat or other reasons to invest in on-premise infrastructure.
Perhaps one already runs a well-performing local system such as Microsoft Internet Information Server. In such cases, integrating an on-premise cloud ERP into those systems would make good business sense.
If one plans to make big customisations, hosted cloud platforms can be customised, but nothing to the extent of on-premise systems. Companies often find differentiation in the nuances of their ERP and many are reluctant to move to the cloud because it could limit this. But with an on-premise cloud ERP, it is possible to have the best of both worlds.
There is a significant difference between an on-premise cloud ERP (sometimes called a hybrid ERP) and a more traditional ERP solely designed for on-site use. But a cloud ERP designed to accommodate both hosted and on-premise flavours is a boon, no matter which one chooses.
Cloud is a massive evolution, it’s not an alternative to on-premise, but instead, an entirely new and better way to use business technology. Many people don’t realise one can still have on-premise controls and oversight along with the power of cloud architecture.
Cloud is not forcing your hand. You don’t have to use an online host, nor do you have to stick with outdated on-premise systems. But both are possible with the right ERP choice.
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