Cloud vs On-Premise: What’s Better for Your Retail Business?
Remember a time when the cloud was a simple reference to the white puffy things in the sky? Us neither. And in today’s hyper-connected world, living outside of the cloud feels almost more obscure than living within it. This is particularly true for businesses, with expectations for at least 50% of IT spending to be cloud-based by the end of 2018. Retailers of course are not immune to the effects of the cloud and the overall management of daily operations and long-term planning stand to be encompassed as part of this number.
ERP solutions in particular are moving more and more in the direction of the cloud, owing to rapid advances in technology and also to a customer that expects more - in real time - which a cloud-based solution is able to provide. In this post, we’re looking at the major differences between a cloud and on-premise ERP solution and some of the benefits associated with a cloud solution for retailers.
On-premise vs Cloud
The major difference between these two implementations can be seen from the start. An on-premise solution requires that everything is installed locally on company’s hardware and servers and is then managed by your internal IT staff. Alternatively, a cloud solution is considered to be SaaS and the ongoing management and maintenance of the service is completed by your vendor.
Some key differences you must consider when choosing between the two include:
Ownership and startup costs: Getting started on-premise requires a substantial upfront and ongoing investment to be effective. Depending on the skill and size of your IT team, you may have to invest additional funds in their training and they’ll likely experience a shift of responsibilities to include ongoing maintenance and upgrades.
In a cloud environment, the cost is predictable and recurring - and remains consistent. An independent study also recently found that the total cost of ownership related to a cloud-based ERP can cost up to 50% less than it’s onsite alternative over a four year period. Not to mention the simplicity and sanity it’ll save your employees too.
Deployment ease: Choosing the right solution and the right partner for your implementation can make getting started with an ERP a hugely smoother process. As a cloud based solution won’t require that you get additional hardware in multiple locations and is scalable in a way that on-premise options simply are not.
Your team will thank you too - as a cloud-based implementation takes way less time to complete, meaning less disruption and risk for all involved.
Performance and accessibility: One of the biggest problems associated with an on-premise option is related to the ability of your staff, no matter where they may be, to be able to respond quickly and accurately based on real time data. With an on-premise option this can get very complicated; with problems such as delays or multiple versions of truth that lead to mistakes and oversights down the line.
A cloud solution intrinsically avoids this because it has been designed to do so (not to mention the added flexibility of a solution that can detect increased levels of operational activity and allocate resources accordingly).
System upgrades and improvements: With an on-premise option, the amount of customization that you can achieve is limited to your current environment and will be difficult and expensive to upgrade at a later time. This leads to many companies running their businesses on out-of-date solutions; and all of the problems that can accompany it.
In the cloud, your vendor is consistently working to ensure that all the latest and greatest in upgrades will continue to be at your service.
Benefits of the Cloud for Retailers
The unique needs of retailers mean that they stand to benefit more than many other industries from a cloud-based solution. Some of the key ways include:
Faster order fulfilment and tracking: if you have real time data, you can streamline the experience for customers and employees and get a much better overall understanding of your processes and how it can be improved.
Improved organization: retail is often seen as a seasonal industry and a cloud-based solution can help retailers not only plan based on data, but also to quickly shift resources to meet the changing needs of their customer and business.
Better inventory management: the more locations you have, the more essential this becomes. This is particularly true for those who are looking to support their omnichannel efforts - meaning that knowing at all times exactly how much of a product is available, where it is, and how to get it to the right person at the right time.
Improved communication: From logistics to accounting, there are a million growing pieces in your retail business - so why not simplify things if you can? A cloud-based ERP can collect your data, organize it into a useful report, and send it to the right stakeholder - without your employees having to do a thing. And better communication leads to better decisions - and an improved bottom line for your business.
Choosing the right ERP and vendor has never been more important - but the positive impact of such a change is incredible. On-premise options may seem to be the traditional and straightforward solution, but it is clear that for retailers to be competitive, they must have the necessary online tools to get it done - many of which are located in the cloud.
If you want to know more about how to get started with a cloud ERP solution, make sure to contact us today for your complimentary consultation.
Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of Systems Limited, or any other entity related to Systems Limited.