How the Cloud is Shifting ERP On-Premise

PostedOn: 2017-03-23 14:50:29

You would be forgiven for thinking on-premise ERP is a dead man walking. When it comes to software or services, the cloud is both the present and the future for most industries. ERP is no exception.  

But while the days of on-premise ERP probably are numbered, the cost, complexity, and centrality of ERP have meant that on-premise installations are hanging on better than most other types of software. Cloud ERP is gaining ground, but on-premise ERP systems still are alive and kicking and adapting as the cloud model takes over. 

ERP juggernaut, SAP, is a good example; the company offers both cloud and on-premise ERP solutions so it can meet any customer need the cloud, hybrid or on-premise. 

“Today, cloud ERP vendors market their products as if the cloud is the only way to consume business software for a rational and smart business owner,”. “This is very deceptive; it is like saying that people should only rent apartments or houses.”  

On-premise or a hybrid model still makes sense for industries that need extra flexibility, system control, strict security, advanced localization or have an appetite for capital expenditure and longer-term cost considerations, he suggests. 

“There is a future for both cloud and on-premise ERP deployments,” 

Still, rising adoption of cloud solutions has forced on-premise ERP to grow and adapt for continued relevancy. This is good for ERP customers. 

A More Nimble Elephant 

First, the cloud has pressed on-premise ERP toward greater pricing and deployment flexibility. With more options, including pay-as-you-go, there have never been more ways to buy and deploy ERP. 

ERP buyers now have “multiple options and pricing flexibility, which can only help the market overall,” 

Because consumption and management are easier with the cloud, on-premise ERP has also had to respond with easier deployment of what in the past has been tough software to role out. On-premise has taken a page from the cloud and is simplifying what it takes to get ERP systems rolling for customers. 

“Technologies that lead to more efficient deployment and management of solutions in the cloud are also becoming available for on-premise,”  

Further, maintenance releases and patches have gotten better with on-premise ERP systems as a result of the cloud model. When cloud solutions update automatically, the old patch and update model for on-premise ERP looks antiquated at best and dangerously vulnerable at worst. 

“On-premise ERP system vendors are now keen on considering possible technology updates while developing products,” says Jithin George at ERP solutions provider, ePROMIS Solutions. 

If the cloud makes pricing, deployment, and updates easy, on-premise ERP must follow. 

A Better ERP System 

The nuts and bolts of on-premise ERP systems also are changing as a result of the cloud, not just how the software is purchased or updated. One big change has been in the area of accessibility. 

“Accessing ERP from anywhere is one of the many great facilities cloud technology offers,”. “This made on-premise ERP solutions find workaround mobility options by integrating web technologies.” 

 “ERP on-premise solutions have become agiler by seamlessly integrating into cloud solutions,” 

Standardized APIs have become an important way for on-premise ERP systems to integrate with the cloud and provide greater connectivity than they did in the past. Even if an ERP solution is on-premise, it must interface with the cloud and be easily accessible from mobile devices. 

The cloud also has improved on-premise ERP standardization. Cloud-based ERP solutions are required to be “ready to go” business processes, which means a high degree of standardization. This has spilled over to the on-premise space, too. On-premise ERP solutions have needed to meet this standardization to keep up with the cloud, offer deployment simplicity, and remain accessible to other systems. Standardization is up because of pressure from the cloud. 

All this healthy competition has been good for on-premise ERP. It is safe to say that ERP has never been more connected or easier to use overall. 

Still, despite what vendors might prefer, that doesn’t mean on-premise can completely avoid the harsh realities of evolution. 

On-Premise ERP might not go away completely for some time, but the cloud is the future for most businesses when it comes to administration their enterprise resources.