What are the Advantages and Disadvantages?
Enterprise resource planning (ERP) software has the potential to revolutionise your organisation. By consolidating all business functions and processes into one coherent whole, you gain massive strategic and operational value and total control of your operation.
If you're planning on installing ERP software or revamping your existing set-up, you may wonder what is the best way to go. Conventional ERP software setups involve firms acquiring their own hardware and software and setting the system up locally.
However, web-based ERP is an increasingly popular option. It involves locating the system off-site and accessing it over a network via a web browser. Essentially, the browser becomes the client. Using such web-based ERP software delivers many advantages, but also some drawbacks.
Advantages of Web-Based ERP
The most obvious advantage is lower hardware costs, as there's no need for investment in powerful servers. And as everything can be done on a web browser, costly workstations are unnecessary. This means the initial investment in web-based ERP tends to be far lower than for the on-premise model.
Moreover, ERP set-up will be much faster, as hardware installation requirements are much reduced. You'll also experience less disruption to your business operations. What's more, your new system will be highly scalable, as your host offers virtually limitless capacity in his dedicated facilities.
The web-based model also allows business owners to take a more hands-off approach. The hosting company takes care of physical server maintenance, as well as maintaining the software through upgrades, service packs and security fixes. This obviates the need for the firm to keep its own IT staff to take care of the ERP system.
The other great benefit is that the system can be accessed from anywhere using any device with a web browser. Such devices include tablets, phones and laptops, as well as desktop computers, whether running Windows, Android, iOS or any other operating system.
This device independence offers great flexibility. A salesman in a client's office could fire up his iPad to get vital data for a sale, for example. Likewise, a factory manager could check and update cost figures in real-time on his smartphone.
In fact, firms can access web-based data from anywhere in the world. This is vital for firms with multiple locations, such as multi-national organisations.
Disadvantages of Web-Based ERP
On the other hand, deploying your ERP software system to the cloud has a few drawbacks. Most importantly, web-based ERP requires regular hosting fees for the hardware. Over time, these costs can mount up and eventually even surpass the investment costs of an on-premise system.
Another possible problem is reliability. Though today's networks are rock solid, slowdowns and outages do occur. Downtime could be disruptive and costly. Data security and integrity is another concern. Most data networks are extremely secure and feature powerful encryption, but breaches occur.
Finally, many organisations experience a feeling of loss of control by storing their data offsite. In such cases, the idea of off-site ERP might clash with corporate culture.
Local or Web-Based?
Ultimately, each organisation must consider its own circumstances when deciding whether to opt for local or web-based ERP. Factors to consider are the size of the organisation, number of IT staff, business model, corporate set-up, resources for initial investment, etc.
If you're facing this choice, the prime consideration should always be to identify a system that's right for your particular business, both now and in the future. This is best made in consultation with your ERP systems provider, who has the experience and technical knowledge to deliver the expert advice you need to make an informed decision about the right ERP software.
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