Summary: In this blog post, we will cover what is cloud ERP software, how it is different from on-premises ERP software, and which one is suitable for your business. You should know which software to choose to streamline all your operations with ERP.

SMBs and large businesses want to keep their ERP system updated and reduce its downtime. Having new and improved features always makes a business of any size leave a positive impact. Therefore, businesses are always searching for new ERP software so they can stay ahead of the curve in this competitive market.

Therefore, the Enterprise Resource Planning (ERP) Software market is rising continuously and is expected to rise at 11% CAGR (Grand View Research). But most businesses, especially small and medium-size businesses, are unable to unlock their true potential.

But, the question is why they are unable to do so.

Well, they will be able to gain momentum and increase overall profit margins by hosting the ERP software in the best environment (Cloud or On-Premises). The cloud market has risen rapidly in the past few years and reached USD 72.2 billion in 2023 (Markets and Markets). However, the debate for which environment is best, cloud or on-premises, continues.

Let’s understand cloud ERP software and on-premises ERP

Cloud ERP is the Enterprise Resource Planning Software that is available to use over the internet and is stored on the ERP-providing vendor’s server. It is popular for providing a single source of data which is helpful to deliver real-time visibility of inventory levels. Anyone from the business can access its information online just with the presence of a stable internet connection and a compatible device.

Due to the multiple benefits, the cloud ERP market is expected to rise by 15.5% CAGR (Fortune Business Insights). Here, no business owns the software, instead, they can access it for the tenure of their subscription (annual or monthly). It is a perfect fit for both SMBs and large businesses, especially those with less budget.

A cloud ERP can transform a business ecosystem with inventory management and syncing of crucial data to all files in real-time. It shows that Enterprise Resource Planning Software on the cloud isn’t just software, it is a growth accelerator for a business.

On-premises ERP software is a system that runs on an in-house self-hosted server. This software’s functionalities can’t be used outside the premises of the server’s location. It enables a business to manage and integrate important operations like sales and marketing in one place.

A business can get the benefit of having complete control over the server. Moreover, it allows a business to do heavy customizations for all parts, including privacy and security.

A business operating with a single, yet powerful software located in the back office provides crucial business information. This software has vast information, including inventory records, financial transactions, and employee schedules. To provide updates, a business should manually install updates and should be present at a particular location to access a file and update it.

Understanding crucial differences between on-premises and Cloud ERP software is essential for any business to make an informed decision. This decision directly impacts a business and its operations. Moreover, it also plays a crucial role in correctly allocating the budget for a business of all sizes.

No business wants to invest in anything that doesn’t add value to it. Businesses generally make informed decisions, especially when it comes to selecting the cloud vs on-premises ERP Software. Software hosted on-premises requires a business to make a large upfront investment.

On-premises enterprise resource planning software makes an IT team of a business spend a significant part of the budget. It allows them to keep their software systems up-and-running.

A cloud-based ERP software requires a lower cost because you pay for the software according to your business requirements. Moreover, this software is hosted and maintained by the cloud provider so that a business can focus on innovation for effective business growth.

To streamline operations and enhance business operations, businesses need updated enterprise resource planning software. For this, it is mandatory to customize that software without disrupting business operations. This customization capability allows a business to keep its ERP system updated. It helps to 2x the capability of a business.

However, updating the system requires both high-cost and on-premises ERP software. These are the primary reasons why 2/3^rd of mid-size businesses (NetSuite) avoid upgrading their on-premises enterprise resource planning software and run outdated software.

On the contrary, cloud-based enterprise resource planning software doesn’t require high cost and time. Moreover, it enables an ERP provider to help a business release new products or service updates without high cost. A provider continuously upgrades by the provider so you can be sure you’re always using the latest and most advanced version of ERP software.

Businesses can increase the performance of the system by reducing the system response waiting time. It is helpful to make a business stand apart and improve its ROI. When we are talking about on-premises ERP software, it requires installation of additional features. However, these add-on features are often expensive to implement.

Unlike on-prem, cloud-based ERP software delivers better performance. It provides performance as per the unique business requirement. Cloud-based software provides 99.99% uptime to a business, making it stand apart from its customers.

Moreover, cloud ERP software enables businesses of all sizes to present real-time that can be accessed via internet, anytime, anywhere. It enables all of the employees of a business to access information or data from any device. irrespective of the location.

Every business needs to deploy software to accelerate project management or any other crucial operation for a business. Every deployment of ERP software (either to add or upgrade it) requires proper planning and time. The time, resources, and money are required, especially in the case of on-premises or on-site software.

However, deployment speed is comparatively lower in cloud software than on-prem. The primary reason for it is the non-requirement to add extra hardware which results in saving both time & money.

Now, you may be thinking about which ERP software is best for your business. Below are the points that help to decide a business about which one to select.

Considering the advantages which a business gets through cloud or on-prem enterprise resource planning software, the best solution depends more on your specific business requirements.

However, the benefits and unique features of cloud ERP software provide it with a clear weightage.

Launched its first cloud-based system in 1998, NetSuite is a market leader with over 40,000 customers worldwide. This cloud-first system enables a business to integrate crucial organization functions as one. It allows a business like yours to gain visibility into large business data.

Moreover, it makes a business store its crucial business data and manages it without any hassle of upgrading it by installing separate hardware. The following are the important points that make NetSuite cloud ERP a top-notch choice for SMBs and large businesses.

A business of any size can choose a new enterprise resource planning system according to its specific requirements. Both cloud and on-premises ERP software are useful for a business, depending on their needs.

However, most of the businesses go for NetSuite ERP when they want to select the best and the most reliable enterprise resource planning software.

To implement it, the best way is to leverage the expertise of a qualified and reliable NetSuite Solution Provider like NetSuiteExpert. It has a team of qualified and reliable NetSuite consultants to help a business embrace growth in this digital age.