SAP Business One is one of the most recognized ERP solution for MSMEs today. Rightfully so as it has helped countless small & medium sized businesses streamline & automate their business processes, and pave the path to growth & success. It handles Finances, Sales, Inventory, Purchases, Customers & much more with ease, making it an indispensable asset for businesses.
I could go on about the myriad features and ways SAP Business One benefits businesses, but that’s not what we’re here for. We are here to discuss and focus on the business end of things. Sure, you’ve bought the license for the software. The next question and an integral one is – How are you going to use it? The “How” here refers to the two most popular approaches for the same – On-Premise and On Cloud.
Let’s get into the basic differentiators first. The very first is in the name itself. On-Premise means running the software locally, at your base of operations. The hardware for it is setup locally, either in your office or a space you’ve designated for it. The second is On Cloud a.k.a On Demand, which means it runs on the cloud. For cloud, you choose a vendor who can host SAP Business One for you on their servers in their data centers and give you access to the software via web browsers. It saves you from having to spend time & resources on the hardware, other local setup & maintenance expenses.
Going by the initial impression, it might seem that the choice is clear in the form of an On Cloud approach. But that is far from the truth as both, On-Premise & On Cloud, have their own advantages and disadvantages. So how do you decide the approach that’s the best for You? To help you with the dilemma, we are going to tell you about the benefits that matter in choosing between the two. By the end, it should be clear as to which approach is better suited to your particular requirements.

Merits of On Cloud Approach

Cost Effectiveness
In terms of the affordability, cloud is a more cost-effective option given that there are no hardware and upfront costs involved. Secondly, as it’s on the cloud, you also eliminate the need to have an in-house IT team for the maintenance and support issues as they’re be covered by your cloud host, further cutting costs. The payments differ, but widely, it is done on a monthly basis which is definitely easier on the wallet.

High Data Security
As cloud data centers provide services to multiple clients, high data security is a priority for them. In order to do so data centers have high-level physical & network security measures to safeguard your sensitive data. With those in place, your data is well protected in the cloud at all times and is much safer as compared to it being stored on-premises.

Scalability
One of the most important factors when choosing an ERP solution is Scalability. Same goes for the hardware & network support required to run the software. Growing businesses need equally scalable solutions to continue growth. In an On-premise approach, this might result in you having to spend significantly to cover the cost of upgrading hardware & network. On cloud however, it’s much easier and cost-effective as both hardware & network scalability is taken care of by your service provider.

Additional Resources
Cloud hosting frees up a lot of resources. There’s no need of investing in hardware or a special in-house IT team for the upkeep & security of the same. This in turn leaves you with additional resources at hand to utilize them to further grow and add value to your business. It also frees you up to invest in other assets or go for business opportunities which would’ve otherwise been impossible due to a lack of resources.

Merits of On-Premise Approach

Control
On-premises environment requires the deployment to be done in-house. This means that you have total control over the systems & the privacy of data. You also have the say if and when any changes or upgrades are done to your existing hardware & network configurations, giving you the control you would otherwise not have if the software is hosted on the cloud.

Customization and Integration
SAP Business One is highly customizable. And a customized business process is better supported in the On-Premise model as there are no restrictions or delays. You’re not required to request or wait. With the on-premise approach, you can customize the software & integrate third party upgrades or modifications at your own behest, giving you the complete freedom to make the software your own.

Extra-Sensitive Data Security
If you deal in sensitive data, then keeping it private and secure is of utmost importance. It can’t be shared with third party, which is the case when you’re dealing with cloud as it is shared with your hosting provider. On-Premise is the way to go as not only is your data with you, but the security you put in place to protect it is top notch as well, thereby ensuring enhanced security of sensitive data.

At the end of the day, the approach you choose depends solely on your requirements. However, it is an undeniable fact that cloud is fast becoming go-to choice and is the future for most software based services including SAP Business One.
Question remains which approach would you go for? On-Premise or On Cloud?