No doubt a question that has crossed your mind if you’re in the market for an ERP update. Maybe, even if you’re not! If there’s any talk of Industry 4.0 or SMAC (and let’s face it, there’s a lot!), talk of Cloud computing certainly follows – so it would be understandable if it has crossed your mind. We at K3 Syspro are guilty of being firmly on board the Industry 4.0 bandwagon, but try to remain objective. The Cloud is great, but it’s not for everyone.
The quick answer would, unfortunately, be another question: “How big is your business?” One vague question leading to another. Although both are valid questions, they are only the starting point. Manufacturing firms of all sizes are beginning to seek the flexibility of the cloud so, to answer the question fully, more than just the size of your business needs to be taken into consideration. Particularly as the decision isn’t just a toss up between cloud or in-house server, but between in-house, SaaS, IaaS, PaaS or even hybrid! An on-premises, private cloud with public cloud services.
The cloud has seen massive growth over the past couple of years and is a fantastic resource for SMEs or rapidly expanding firms as it generally provides a more affordable solution with faster implementation than a dedicated server. However, this does not mean your decision should be based on turnover alone. Something to definitely consider is time scale. Is it a short term solution or are you looking for a long term investment?
The overall cost of a cloud-based ERP solution is dependent on which cloud service you choose, as different subscription fees apply to different models. In most cases, a cloud solution will break even with an in-house solution around the five to seven years mark. After this, it becomes the pricier option. This, however, doesn’t make an on-premises implementation the more desirable option for every business. Some would rather pay extra for the convenience of having their ERP provider take care of everything. You just supply the data and they’ll do the rest. Think of it as like the difference between leasing or buying a car. It’s cheaper to obtain and maintain, but in the long run, will cost you more.
The scale of your business is also something to consider. Are you forecasting rapid expansion? Or is your business seasonal so an increase and reduction in production is predictable? Hosting your ERP in the cloud allows you to alter your RAM, disk space or CPU with just a few clicks, taking only a fraction of the time upgrading a dedicated server would take. Juxtaposed to this however, a dedicated server in most cases will have surplus space already, allowing for expansion without barriers. Another reason to consider the cloud would be if you are a multi-site operation. Rather than have several dedicated servers in each location, you could host the data in the cloud! Again, saving you money on multiple ERP installations.
Nothing connected to the internet is perfectly secure and cloud hosted ERP is no different. This doesn’t necessarily mean it is more secure than a dedicated server however. Cloud providers such as Amazon and Microsoft are making huge efforts to make their clouds secure, after all, it’s their reputation on the line and any breaches reflect upon them badly, damaging their entire business. Furthermore, the collective spend of hundreds of users and experience of correcting their problems means a hosted ERP is probably much more secure in their hands than those of an I.T dept. This isn’t to say though, that an in-house SYSPRO server leaves your data accessible for all to see. SYSPRO alone, without additional security from the host, is incredibly secure. SYSPRO can be tailored to be as finely tuned as your operating environment requires, meaning your data is always as safe as it can be.
The Future of ERP
Currently, everything ERP has to offer can be run either in the cloud or on-premise, however, this may not be the case in years to come. The advent of Industry 4.0 demands a more agile and intuitive business software, with instant access to data on the move – something that the cloud platform is better suited to. Subsequently, many vendors (SYSPRO included) are focusing their time and resources on building enterprise software specifically for the cloud, rather than a compromise to work on both platforms. This doesn’t mean on-premise ERP will become a thing of the past though, K3 Syspro pride ourselves in providing support for all our systems. If on-premise is the right deployment method for your business, we’ll support it – no matter how many cloud based updates the future holds.
Selecting an ERP system is a tricky enough process, without also having to think about the deployment method too. Cloud hosting has opened up the world of ERP to many SMEs over the past few years as a more accessible option, but this doesn’t mean you can be too big for the cloud, or too small for a dedicated server! An ERP solution is unique to every business. SYSPRO have a wealth of experienced staff from development to sales to ensure you get the correct solution for your business. We treat every customer with professionalism and honesty, so you can trust K3 Syspro never to oversell and to always provide the solution you need.