SaaS ERP vs On-Premise ERP: What are major differences? (Pros & Cons) Thumbnail

When you want to implement ERP solutions, you are stuck with many options to choose from. But, it is very important to choose the right ERP solution for your organization. It must be able to fulfill all the requirements.

However, the most initial decision will be choosing between SaaS ERP & On-Premise ERP. Both of these are a type of ERP system. But, they are quite different from each other. Based on the characteristics & properties, one is opposite to another.

It’s important to know about both of the ERP systems. So, it is easier for you to select one of them. That’s why we are going to explain what they are. But, most importantly, you will get to know about major differences between SaaS ERP & On-Premise ERP with their pros and cons.

What is SaaS ERP?

SaaS (Software as a Service) ERP refers to a type of cloud-based ERP software that runs on the vendor’s data center. The company users can access the software through the internet. For that reason, you don’t need to build infrastructure or purchase servers. Mostly, it is sold as a per-user monthly subscription.

What is On-Premise ERP?

On-Premise ERP is a type of ERP software that runs on in-house IT infrastructure at your desired location. It requires hardware and servers to be implemented. So, it is maintained at a physical office. An On-Premise ERP solution will provide control and security over the data.

SaaS ERP vs On-Premise ERP: Major Differences.

Now, you must know about what is SaaS & On-Premise ERP. But, they are quite different from each other. Let’s look at some major differences between SaaS ERP & On-Premise ERP.

Deployment.

Both of the ERP systems are deployed oppositely. There are major deployment differences between SaaS & On-Premise ERP.

SaaS ERP: SaaS ERP acts as cloud-based software. It is developed and implemented by the vendor. It is hosted on the vendor’s server. So, they are responsible for its maintenance. The users can access SaaS ERP software through a web browser with the help of the internet.

On-Premise ERP: On-Premise ERP is provided by the vendor. But, it is hosted on the company’s local server. The company needs to build an entire IT infrastructure on its physical office. So, the On-Premise ERP is implemented.

Pricing.

The second major difference between SaaS ERP & On-Premise ERP is their pricing models. 

SaaS ERP: Majorly, SaaS ERP is cloud software that is provided under a subscription-based price model. In it, you have to pay a monthly or yearly subscription fee to the vendor.

On-Premise ERP: When you implement On-Premise ERP, it is priced under one-time license fees. You have to pay those fees to get the on-premise software. But, there some hidden charges like training, support and updates.

However, there isn’t any difference between their prices. But, the On-Premise ERP will be of a high budget as compared to SaaS ERP. It is so because On-Premise ERP will require building IT infrastructure that includes different hardware and servers. In this way, implementing On-Premise ERP will be more expensive. 

On the other hand, SaaS ERP will have a low cost of entry. Also, there’s no need to spend money on hardware or servers. It is one of the main reasons why many businesses are adopting the SaaS ERP system.

Pros & Cons of SaaS ERP.

As SaaS ERP has its characteristics & properties. The majority of companies opt for SaaS ERP systems to gain flexibility and scalability. There are some pros & cons of SaaS ERP.

Pros:

  • Quick Deployment.
  • Remote Access.
  • Easy to Customize & Configure.
  • Automatic Data Backup & Recovery.

Cons:

  • Lack of Control.

Pros & Cons of On-Premise ERP.

On-Premise ERP has its benefits. Some businesses might find it a perfect fit for their requirements. It depends on the pros & cons of On-Premise ERP.

Pros:

  • Better Control and Flexibility.
  • Minimal Vendor Involvement.
  • Schedule Software Upgrades.

Cons:

  • High Project Cost.
  • Require IT Support.

Verdict.

Despite the major difference between ERP systems, SaaS ERP holds an upper hand in the ERP industry. Most businesses implement SaaS ERP as it has a low upfront cost and easy maintenance. You must have known till now about the major differences between SaaS ERP & On-Premise ERP. So, you might choose the accurate ERP solution for your business. It will optimize your business operations.

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