Why do companies still want an on-premise ERP?

1. Investment and Maintenance

2. System Upgrade

3. Local Access

4. Security

5. Real-Time Performance Issues

What does the future hold?

Enterprise Resource Planning (ERP) is a kind of business process management software used by companies to manage, streamline and automate diverse business operations. The operations include sales, marketing, product planning, manufacturing and human resources. The ERP system allows companies to manage all aspects of the business operations in a well-synced manner. The concept of ERP became popular in the 1990s and has since grown to become a part of modern day-to-day business operations. Choosing a software solution or implementing a framework within your organization is never an easy task. When considering whether or not to implement an ERP system at your company, choosing the right type can prove to be quite tedious. While most business setup processes are performed online these days, businesses still cling to the traditional on-premise software solutions for the more significant processes. For some businesses, the convenience of resorting to tried-and-true, tested solutions seems more prudent than embracing emerging technologies. Cloud-based ERP s are used by a great many companies across the globe. But, despite their lure, a significant number of businesses still prefer on-site ERPs. They are definitely not without their reasons. The advantages offered by on-site ERPs are too great to overlook. Additionally, factors like budget, project scope and business size also play an important role in the selection process.It may appear that cloud-based ERPs do not need hardware infrastructures like the on-premise ERPs do; however, the reality is that most companies, regardless of size, already have some type of hardware infrastructure in place. So for them, deploying an on-site ERP is easier than transitioning to an online model that is entirely internet-reliant. Additionally, on-site ERPs have skilled manpower to tend to their hardware and network maintenance. It’s the small-business setups, where cost is a prime concern, where the owners opt for cloud-based ERP solutions.In cloud-based ERPs, system upgrades are handled by the service provider, which means the business has little to do. As it relates to customization, having an on-premise ERP is more prudent. A skilled IT and networking team, usually a necessity in large organizations, can handle the upgrade of software versions and backups. Taking good care of the system and its upgrades and related tasks is their responsibility.In cloud-based ERPs, nearly everything is performed online. The data being saved and accessed is stored on cloud servers. The same can be said about the data backups. In certain ways, this can be beneficial; however, most setups having local storage for data backup and access are considered more important than relying solely on the cloud. In on-site ERP setups, there is no need to rely on third-party service providers for backup or data modifications.Online security has improved by leaps and bounds of late and the security protocols deployed by cloud-based ERP providers have also improved. And yet many companies prefer having an on-site ERP because it provides them with the deployment options for multiple security levels. On-site data security is oftentimes more difficult to breach than online security because it is deployed by skilled professionals. Therefore, the possibility of a security breach is significantly lower in setups where an on-site ERP is deployed.While established software vendors like SAP SE and Oracle Corporation are constantly coming up with online software solutions, some of their biggest users are in no hurry to make the transition. This applies to applications that are associated with the core business operations. These users don’t want to switch to a cloud-based ERP for apps that are related to inventory management, billing, and logistics. Businesses that handle thousands of customers and ship myriads of products find it risky to deal with ERP apps that run entirely on the cloud when an internet service anomaly can result in things going off-the-rails. For some businesses, a system that remains out of order for more than a couple of hours can lead to a tarnished reputation. Sometimes, sluggish net connections can also affect workflow in such setups. Switching from an ERP system running in a corporate data center to a cloud-based ERP is like receiving a heart transplant.Despite large organizations who are willing to cling to an on-site ERP , the future of cloud-based ERPs is not too shabby! Many companies have already shifted a portion of their operations to the cloud. Several other companies are also opting for hybrid ERP solutions due to the fact that with organizational growth, a single ERP solution cannot match the requirements. However, the cost of ownership for such ERP solutions needs to be planned in advance.