Choosing Between On-Premise and Cloud Hosted IT Infrastructure for Your ERP Project

Introduction

When embarking on an ERP (Enterprise Resource Planning) project, one of the crucial decisions you'll need to make is whether to opt for an on-premise or cloud-hosted IT infrastructure. Both options have their merits, and the choice you make can significantly impact your project's success. In this blog, we will delve into the considerations for both on-premise and cloud-hosted IT infrastructure, helping you make an informed decision based on your organization's needs, resources, and preferences.

On-Premise IT Infrastructure

On-premise IT infrastructure involves hosting your ERP system on your organization's own servers and data centers. Many companies prefer this approach for various reasons:

1. In-House Technical Resources: Organizations with a strong technical team, including employees or contractors skilled in managing networks and ERP deployments, often opt for on-premise solutions. They have the expertise to handle the complexities of maintaining the infrastructure.
2. CAPEX Expenditures: Some companies prefer capital expenditures (CAPEX) every 5 to 7 years for setting up new application and database servers. This allows them to replace aging hardware and maintain control over their infrastructure.
3. Control Over Updates: On-premise solutions offer greater control over updates and upgrades. Companies can plan and execute these activities at their own pace, ensuring minimal disruption to operations.
4. Complete Access: Organizations have full access to all essential elements of a network/client-server deployment, including backups, firewalls, and protection against viruses, spam, and ransomware.
5. Well-Defined Update Plans: Companies utilizing on-premise infrastructure typically have well-defined plans for software, workstation, and server updates, enhancing security and stability.
6. Access to IT Support: These organizations often have easy access to external IT organizations for hardware procurement, infrastructure software licensing, external monitoring, troubleshooting, and user support.

Cloud Hosted IT Infrastructure

Cloud-hosted IT infrastructure involves outsourcing your ERP system's hosting and management to a third-party cloud provider. This option appeals to many companies for the following reasons:

1. Resource Limitations: Organizations lacking the necessary in-house resources or those unwilling to hire and manage such resources opt for cloud hosting. This eliminates the need to worry about the technical aspects of infrastructure management.
2. OPEX Expenditures: Cloud hosting typically involves operational expenditures (OPEX), such as monthly or quarterly payments. This approach is often preferred for its cost predictability and flexibility.
3. Speed of Deployment: Cloud hosting enables rapid deployment of the required infrastructure, allowing companies to get their ERP environment up and running quickly, reducing time-to-value.
4. Scalability: Cloud environments offer scalability options, allowing companies to start with a multi-tenant setup and potentially graduate to a single-tenant environment as they grow.
5. Hands-off Maintenance: Cloud hosting providers handle backups, updates, and hardware changes, relieving organizations of these operational burdens.
6. Leveraging Cloud Giants: By choosing cloud hosting, companies can take advantage of the vast resources and expertise offered by major cloud providers like AWS, Azure, or Google Cloud.

Making the Right Choice

Both on-premise and cloud-hosted options are viable for ERP projects. However, the choice often comes down to the specialization required and the range of responsibilities involved. It's essential to make an informed decision based on your organization's unique circumstances.

We recommend partnering with a web hosting provider that specializes in your ERP application and database. A knowledgeable partner can not only set up and manage your infrastructure effectively but also provide excellent service and support to your users.

Conclusion

In conclusion, selecting the right IT infrastructure for your ERP project is a pivotal decision. Whether you opt for on-premise or cloud-hosted solutions, ensure that your choice aligns with your organization's technical capabilities, budgetary considerations, and growth aspirations. With the right infrastructure in place, your ERP project will be better positioned for success.