Cloud ERP or On-premise ERP for eCommerce (1) - PowerPoint PPT Presentation

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Cloud ERP or On-premise ERP for eCommerce (1)

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As you consider managing your e-commerce business functions within an integrated and centralized system, you land up with a heap of choices for ERP software. Now the question arises – whether to install on-premise ERP or a cloud-based ERP solution. – PowerPoint PPT presentation

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Date added: 29 October 2019
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Title: Cloud ERP or On-premise ERP for eCommerce (1)


1
Cloud ERP or On-premise ERP for E-Commerce
Category Integration, Magento 2.0
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  • As you consider managing your e-commerce business
    functions within an integrated and centralized
    system, you land up with a heap of choices for
    ERP software. Now the question arises whether
    to install on-premise ERP or a cloud-based ERP
    solution.
  • On-premise ERPs are ERP software installed
    locally in your organization using your
    infrastructure and your IT department manages
    it. However, cloud-based ERP systems, which are
    also termed as SaaS, or Software-as-a-Service,
    are managed centrally by the ERP provider and can
    be accessed using any web browsers by users. Let
    us either look at some numbers and statistics to
    understand why one should choose of the systems
    or move to cloud-based ERPs from the traditional
    ones.
  • According to Forbes, by the year 2020, almost 70
    percent of software, services and technology
    will switch to cloud-based
  • In 2018, the adoption rate of new customers
    choosing cloud-based ERP was 80 percent over
    on-premise ERP
  • The rate of growth of investing in cloud
    computing has increased by 4.5 times in the last
    decade
  • There are mainly two aspects, which clearly helps
    you differentiate between the two type of
    deployment and pricing. Some of the other key
    factors you need to take into consideration
    whether to use on-premise or cloud-based ERP
    software is mentioned below
  • Cost of Ownership
  • On-premise ERP system is charged as a one-off
    license fee by the service providers.
    Additionally, they need a large investment for
    setting up a dedicated infrastructure to manage
    the software, hardware, servers etc. You will
    have to bear the cost of hosting and maintenance.
    The IT team in your organization has to be
    trained to maintain the system on a daily basis.
    If your company does not have an IT team, you
    might as well have to invest to hire one. In the
    case when the ERP system needs an upgrade, the
    IT team should be capable enough to redeploy,
    customize and integrate with your existing
    systems at no extra cost. On-premise ERP is
    typically considered as a capital expense.
  • Cloud-based ERP systems are relatively less
    expensive. The initial cost is lesser than that
    of an on- premise one as all you need to invest
    is on the software and a few computers with a
    strong internet backbone. All other
    infrastructure requirements such as hosting are
    provided by the cloud-based ERP provider. There
    is no need for an IT team in your company as once
    the system gets running, the provider will
    maintain it and will ensure that data is secured
    or other daily operations are executed smoothly.
    Cloud-based ERPs mostly offer pay-as-you-go
    subscription plan as per your number of users.
    This helps you manage your cash flow and reduce
    unnecessary investments. Thus cloud-based ERP is
    typically considered as an operating expense and
    it can be as much as 46 percent less compared
    with an on-premise ERP system.

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Maintenance and Software Updates One of the major
drawbacks of using on-premise ERP is that when
your ERP provider releases a new update or
enhances the software it becomes a difficult task
for your IT team to upgrade to the newer version
as all your previously implemented customizations
wipe out. In that case, your IT team will have
to reconfigure it from scratch. This is a reason
companies are reluctant to upgrade their on-
premise ERP. They continue their business with
out-of-date technology. If you want to use an e-
commerce solution, you might have to purchase
from your ERP provider, as there will be a
compatibility issue for integration. Cloud ERP
solutions such as Dynamic 365 or Dynamic NAV are
continuously upgraded by the service provider.
This allows your ERP to be updated with the
latest version. In addition, the previously
configured customizations and integrations are
automatically carry forwarded after an update. In
this case, your IT team does not get involved as
the service provider maintains routine updates.
You can also integrate e-commerce system such as
Magento with your existing ERP. Deployment and
Implementation Deployment of ERP is
time-consuming, as it needs roughly a year to
plan, gather resources, build the required
infrastructure, and finally implement it
on-premise. Comparatively, cloud-based ERP such
as Dynamic 365 or Dynamic NAV takes lesser time
to deploy and implement. It does not require any
additional hardware and requirement or
infrastructure is also minimum. Within a span of
two to four months, a service provider can set
it up and you can use it for your business. It is
scalable and gives you the flexibility to add
new users as your business expands. For
on-premise ERP you need to invest in additional
hardware if you plan to scale it up. Connectivity
and Integration On-premise ERP will provide with
a set of features out of which most would be
useful to the business others you may not use
them at all. As these features are already
installed in the software, you will be unable to
integrate additional functionalities you
require. On the other hand, cloud-based ERPs are
designed to work with other systems using API
connections. So if your business requires
integration with an e-commerce system or custom
EDI functionality, cloud-based systems allow you
to achieve it. Security Data security plays a
vital role in any business. On-premise ERP
software has access to a limited number of users
within the organization hence many people find it
to be safe and secure. Although there is always
a risk of a security breach or even infiltration
in the workplace. However, cloud-based ERP
service providers take data security very
strictly and therefore use trusted platforms
such as Dynamic 365 and servers keeping your data
safe and secure. They also provide you
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4
with regular backup of data to keep the software
updated with the latest security measures. While
on-premise ERPs have contributed a lot to
industrial growth across the world and verticals,
they have run their course. Today, on-premise
users are stuck with their current platform.
eCommerce store owners must build their
eco-system to accommodate rapid growth. Contact
us to know more.
-x-x-
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