e2b Enterprise Blog
LinkedIn
Google
Twitter
Youtube
Facebook

ERP Deployment Recommendations

Like most of our competitors, we’ve been working with premise-based ERP for decades but we realize that technology is ever changing and there may be reasons why you are better served with a hosted or cloud ERP deployment. All of our ERP products are available in an on premise or hosted deployment. We strongly recommend Epicor Express for smaller manufacturers and distributors outgrowing Intuit QuickBooks and other general or entry-level ERP systems who are considering moving to the cloud but have found that most cloud ERP software has minimal supply chain functionality and are (at best) a modest improvement over their existing ERP software.
EPICOR ERP
EPICOR EXPRESS
SAGE ERP X3
SAGE 100 ERP
SAGE 500 ERP
Premise
Hosted
Cloud (SaaS)
Appliance


On Premise ERP

Historically, most businesses deployed their ERP databases on local servers within their firewall with installations of the application software on individual computers. Other companies have implemented virtualized environments using technologies from VMware, Citrix, or Microsoft. Many companies feel safer having the software and their data secured within their firewall but the truth is that on premise servers can be hacked as easily (or more easily) than most hosted or cloud systems. After all, small and midsize businesses don’t have the resources or the expertise to protect their systems like larger hosting companies such as Microsoft or Amazon.
The traditional ERP deployment model has worked for decades and is still alive and well despite what some analysts say about the future of desktop business applications and the proliferation of cloud business technology. Still, there is certainly an active movement with more and more companies moving to cloud or hosted ERP systems. The truth of the matter is that premise ERP systems have been around a long time and they are much more mature meaning that they have a lot more functionality than most of the newer cloud ERP software available today.
There are some pros to premise-based ERP. You control the software, you own the software, and you can customize and integrate the software to meet your needs. Another reason for deploying ERP on premise is the perception that it has a lower total cost of ownership. For example, let’s say you get a quote from two vendors – one premise and one SaaS – they are comparable products for your size company. What you’ll like see is that the cost of the SaaS ERP subscription compared to the purchased software license (including annual maintenance and support) will appear to show a break-even at around 30-36 months with premise ERP winning in the long run. This in fact is a benchmark that most SaaS vendors use when determining their pricing model and some will think that on premise ERP is the better long-term choice for this reason (and it may be). However, you also have to consider many of the hidden costs of on premise ERP. For example, you need to buy servers, you need database licenses for Microsoft SQL or Oracle, you will likely need more internal IT administration, and operating system licenses.
In our opinion, the total cost of premise ERP compared to cloud ERP are likely very similar and the decision to implement one over the other depends on your business philosophy, overall IT strategy, up-front investment costs, and the availability of required functionality (or integrated third party applications) to meet your current and future business needs.

Hosted ERP

Businesses that want to access their ERP software externally and prefer to off-load the administration associated with database back-ups and upgrades often choose to work with third party companies to host their ERP software in a private cloud. This is not cloud ERP in the truest sense but it is a popular option for many businesses. In a hosted model, the ERP database and application software is installed just like an on premise deployment of the ERP software but it is simply hosted by another company and made available through secured and trusted connections through the hosting provider who assumes the responsibility of maintaining the software and the database.
Some ERP vendors offer hosting services as an optional service but you are typically charged for hosting and you may have to buy the software license as well. Other ERP vendors offer their premise ERP software in a hosted environment and provide subscription pricing to make it feel like a true SaaS ERP deployment. There is little difference between hosted ERP systems available as a subscription compared with a true, ground-up cloud ERP system (SaaS).
With that said, most cloud ERP providers wrote their software to work exclusively in a cloud environment. As such, you will likely see increased performance with cloud ERP system and less compatibility issues with web browsers than you may experience with a hosted ERP solution. Further, in a multitenant cloud environment, product updates are deployed to many customers at one time which reduces administrative costs compared to a hosted environment where updates must still be managed for each hosted account.

Cloud SaaS ERP

The latest option available for ERP deployment is cloud or software as a service (Saas) ERP which was designed from the ground-up to run in a web browser connected to a hosted database. The ERP data is either hosted in a shared database (multi-tenant) with other company’s data or in a dedicated hosted database (single tenant or private cloud). You can think of multi-tenancy in respect to online banking. Your bank account information is likely stored in a database with hundreds or thousands of other customers but when you log in you only see your data. Cloud or SaaS ERP is typically sold as a subscription as opposed to an outright purchase of a perpetual license to the software. This pricing model typically reduces up-front investment costs. However, there is little reduction in the implementation costs which are about the same for premise, hosted, or cloud products which still need to be configured with data migration and end-user training.
Most cloud ERP vendors want you to believe they’re better because they’re in the cloud. While the technology has many benefits they don’t tell you that because they’re newer ERP products, that they lack many of the more advanced features found in more established premise-based ERP systems. For example, NetSuite and Intacct are two of the fastest growing ERP products on the market today but not in manufacturing industries. Why? Because neither one has manufacturing capabilities that even come close to traditional premise ERP systems from Infor, Epicor, Sage, or Microsoft (to name just a few examples). Further, it is very difficult (in most cases) to customize or to build custom integrations with true cloud ERP software compared to traditional ERP applications. Instead, you may be forced to live with the limitations of the software, change your business process, implement stand-alone systems, or purchase third party apps to fill in the gaps.

Appliance

Another deployment option is to purchase a turnkey ERP system already configured on a server. This package is called an appliance and includes the hardware, operating system, database, and pre-configured ERP software. All you do is plug it in and connect it to your network. Of course you still have to setup the software but the appliance option is attractive because the hardware, operating system, database license, and the ERP software come pre-installed and fine-tuned for optimal performance. The appliance option also eliminates costs associated with VPN and virtualization and includes data back-ups to a secured off-site location. This option is available for some ERP systems such as Sage 100 ERP and Sage 500 ERP.
Back To Top