ERP Solution – Online vs Onsite

There are many questions you may need to consider when buying an ERP. The main ones are:

  • Does it do what I need it to do?
  • Should I buy an on-site solution or a ‘Cloud” solution
  • Do I buy a standalone product or  commit to a suite

Download the FREE ERP Checklist to help you discover the features ERP solutions need, it will also help you rank and compare the vendors.

Below are some ideas to consider:


Cloud ERP also known as on-demand or hosted  ERP, provides a simpler, faster, and more affordable way for businesses to take advantage of powerful technology tools that streamline and automate the way  interactions are managed across a business.

With Cloud ERP, all hardware and software components are purchased, installed, tested, and maintained by a third-party hosting provider at a remote site( sometimes overseas). The service provider also stores and manages all customer-related data. Companies need nothing more than a standard Web browser to access and utilise the ERP application and its features.

Cloud ERP can be known by other names:

Software as a Service(SaaS)– is a particular form of Cloud ERP where much of the hardware infrastructure is shared amongst many users rather than be dedicated to one company. These offerings are often sold on a rental basis at a Dollar/User/Month basis – some with time period contracts and some without.

Vendors in this arena include:

  • Microsoft Dynamics ERP from Microsoft resellers
  • NetSuite
  • SAP Business ByDesign

Hosted ERP

Another form of Cloud ERP is called Hosted ERP. In this case you will have a dedicated server at a datacentre that is managed by a 3rd party service provider. This is a common way for larger companies to operate and can apply for solutions such as Microsoft Dynamics, SAP and Siebel.

Note: Companies such as NetSuite only operate on a SaaS rental basis and so the On-site option is not available.

Cloud ERP Vendors: Find the Right ERP Vendor For Your Small, Medium Or Enterprise Business Here.


Cloud Computing

Cloud computing – a generic term for all applications that are used through a web browser and don’t hold data on the PC. Cloud ERP is one option and it can include other software categories such as Google Docs for office productivity. It should be noted that Cloud ERP has its limitations, based upon the amount of interactions with other systems. A Simple ERP can live in the Cloud, but if advanced manufacturing integration is required then an on-site solution is the more likely offering/


On-site ERP, also known as licensed, on-premise, or in-house ERP, is a customer relationship management application that is housed at a client’s location, and managed by its own employees. Internal IT personnel are responsible for installing all hardware and software components, integrating the solution with existing systems, deploying it to end-users, and storing all related data. System administration, upgrades, and other routine maintenance are also performed by IT staff.

This means that the software, servers, network, user management are managed by the IT department. This is the traditional way of implementing a system.

Options here include:

  • Microsoft Dynamics ERP
  • SAP Business One/SAP All In One
  • Sage, Attaché, MYOB

ERP Vendors: Find the Right ERP Vendor For Your Small, Medium Or Enterprise Business Here.


Cloud vs. Onsite

Here is a summary of the Pros and Cons of Cloud ERP and On-site ERP.

Cloud ERP Pros

  1. Faster time to value.
  2. Better accessibility from remote locations.
  3. Easy deployment.
  4. Frequent updates.
  5. Cost-effective.
  6. Often the only alternative for SMBs.

Cloud ERP Cons

  1. You need regular high-speed internet connectivity.
  2. Over time, the TCO (Total Cost of Ownership) can shoot up.
  3. Shifting to another vendor may not be easy.
  4. Data security.
  5. Customisation and integration is not always easy.
  6. Limited manufacturing and supply chain capability

On-site ERP PRos

  1. More flexibility
  2. Easier Integration
  3. Greater control of the system
  4. Tighter security
  5. Total cost of ownership of the solution
  6. Unlimited customisation potential

On-site ERP Cons

  1. Higher upfront costs
  2. Slower return on investment (ROI)
  3. Increased maintenance