Small and medium businesses in Sri Lanka find it hard to choose an appropriate Enterprise Resource Planning software. Should you select On-Premise ERP or Cloud ERP?
Both alternatives lead to improved productivity and business process automation. But they have different implementation procedures, expenses, and benefits. In the last section of this document, the various cost-related benefits of both Cloud ERP and On-Premise ERP will be elaborated.
What Is Cloud ERP?
So, what’s Cloud ERP all about? Imagine a super handy software system that doesn’t live on your computer but instead hangs out on the vendor’s servers—somewhere out there in the magical “cloud.” You just hop online to use it whenever you need. It’s like renting a cool, flexible tool that grows with you and doesn’t need you to fuss over the upkeep. Easy, right? For example, Blue Lotus 360 is a cloud-based ERP for SME.
What Is On-Premise ERP?
Now, On-Premise ERP is a bit different—it’s more old-school. This one sets up camp right on your company’s own servers, and your IT crew takes care of it. You’re the boss of the whole setup because you own both the software and the hardware. It’s like buying a house instead of renting an apartment—you’ve got full control, but you’re also the one fixing the leaks.
Cloud ERP: Pros and Cons
Pros of Cloud ERP
Cost-effective initial purchase: No need to purchase expensive server hardware, just a monthly subscription of $50 to $200 per user.
Cloud ERP: Provides a practical way to contribute to sustainable development by making it easier for companies to tact on additional users or functionalities as the company expands.
Cloud ERP: It boosts productivity as workers can access the system wherever they are as long as there is a stable internet connection.
Low Maintenance: The supplier looks after all security risks and updates, which frees up time and IT resources.
Cons of Cloud ERP
- Subscription fees only increase over time,
- If there’s no internet, there’s no access.
- Adaption to certain business needs can be an issue with cloud solutions.
On-Premise ERP: Pros and Cons
Pros of On-Premise ERP
Full Control: The system is owned and can accurately be tailored to the requirements of the SME.
Data Security: Sensitive information is kept in-house, minimizing reliance on vendors.
One-Time Cost: Initial investment typically ranging from $10,000 to $100,000+, but has zero subscription fees.
No Internet Needed: Guarantees uninterrupted access as it works offline.
Cons of On-Premise ERP
- Hardware, software licenses, and even setup tend to be on the pricey
- Updates, fixes, and backups are time-consuming plus expensive.
- Expansion requires more hardware and administrative effort.
Which Is Best for Your SME?
Choose Cloud ERP for SME if
You’re a growing SME with limited IT resources. Besides, you need flexibility or prioritize remote access. It’s ideal for startups or businesses with tight budgets.
Choose On-Premise ERP if
You have specific needs and prioritize data control. This solution is ideal for established SMEs with in-house IT expertise seeking greater customization and ownership of their ERP system.
Final Thoughts
Choosing between Cloud ERP and On-Premise ERP is a critical decision for SMEs in Sri Lanka. Each option comes with its own set of advantages and limitations, and the right choice depends on your business’s specific needs, budget, and growth goals. Cloud ERP offers affordability, flexibility, and easy accessibility, making it ideal for growing SMEs with limited IT resources. On the other hand, On-Premise ERP provides complete control, data security, and customization, which may suit established businesses with dedicated IT support.
At Blue Lotus 360, we provide tailored Cloud ERP solutions designed to empower SMEs with the tools they need to enhance productivity and streamline operations. Contact us today to discover how our ERP solutions can support your business’s growth and help you achieve long-term success.
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