ERP systems are divided into two main types of software Cloud-based software and On-premise software. The choice of software to implement an ERP system is very important.
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Of course, ERP systems are suitable for all types of businesses. The question is what kind of software will fit the needs, costs, and future expansion plans of companies.
webgiaidap.com will evaluate and compare the characteristics of these two types of software, helping your business have an overview to choose the right ERP software for your business.
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What is Cloud ERP and On-premise ERP?
The definition of these two types of models is quite clear to distinguish, it is also the main distinguishing feature between these two types of models:
Cloud ERP: The system will be hosted on the enterprise’s server and accessed via a web browser.
On-premise ERP: The system is deployed directly on the enterprise’s own hardware and server.
Many online sources believe that On-premise ERP implementations are for large guesswork, as they have enough human resources and facilities to maintain.
But with businesses preparing or transitioning to data (Digital transformation), is choosing On-premise still good or deploying Cloud ERP will be more appropriate?
To see the difference clearly, we will go through the main differences or points to know to choose a suitable ERP software.
The priority while choosing the right solution for the business is the investment cost, here are the differences in pricing of Cloud and On-premise ERP:
Monthly fee (subscription model)Includes hosting, server, maintenance and software updates Additional costs: Deployment and support fees
Pay a large amount for the software and add a large amount of money to prepare the infrastructure (servers, team developers, etc.).Does not include hosting fees, servers, maintenance and software updates Costs Extra: Deployment fee and support fee
The main difference in the cost of these two solutions is the payment method:
Cloud ERP solutions are usually paid in a certain cycle (usually monthly). In contrast, On-premise solutions will usually charge a one-time fee (so the cost will be quite high for Vietnamese businesses).
Because of the different payment methods, On-premise solutions are often determined as capital expenditures (Capital expenditures, while Cloud ERP solutions are calculated as operating expenses).
Comparison between Cloud ERP and On-premise ERP
Just now is the initial cost to deploy two types of ERP system solutions, as follows:
These are certain characteristics of the two types of ERP solutions. In terms of implementation time is quite relative, there will be the first ERP software that calculates the deployment time for Cloud-based system about 6 months and for On-premise system it will be 12 months.
Of course, the implementation timeline has been greatly shortened thanks to the latest ERP software.
To find out how long it will take to implement an ERP system for your business, contact us.
Evaluate effectiveness and future scalability
In the pre-Internet era, the major players in every industry would update their software every 5 years, the cyclical performance evaluation would also correspond to the update time.
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But, with the explosion of the digital age, evaluating the effectiveness of business support software will have to have a shorter cycle.
Technology is constantly updated, it is optimal to apply an ERP system that is adaptable and scalable according to the company’s development momentum.
On average, an ERP implementation project will need about 6 months to install and customize to suit the needs of the business. Plus about 3 months to merge with other software (if any).
If you spend such a time implementing and perfecting the ERP system, you will be left behind with other competitors and your market competitiveness will be significantly reduced.
So the priority when implementing an ERP system is to have a clear implementation plan, you can rely on the advice of third-party software companies.
Cloud-based ERP software will be more suitable in this case. It is designed to be simpler, along with flexibility when businesses need to expand. Of course, upgrading this system will not waste time waiting or paying developers to update your ERP system.
The after-sales support between the two types of software will be slightly different. For On-premise systems, the enterprise controls the entire system, which means that it is up to the business to fix errors, maintain and update the system.
In contrast, for Cloud ERP, since you already pay a monthly subscription, maintenance, updates, and bug fixes are included in that amount.
As an additional note, when you deploy a Cloud ERP solution, you need to have access to the internal team that specializes in that software. No one knows the industry better than its internal employees.
Which solution should I choose?
Many large enterprises and corporations will choose On-premse ERP solution due to its security and initiative in controlling data, and spending a large amount of money on operating the system.
webgiaidap.com recommends readers to use Cloud ERP solution. This solution is priced to suit the needs of all types of businesses, has a short implementation time, and can be easily expanded according to the company’s growth in the future.
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To find the right ERP solution for your business, contact webgiaidap.com’s leading experts with 6 years of experience in developing technology systems for businesses to help you achieve your Digital Transformation goals. effective.