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Cloud Computing vs. On-Premise Systems: Which is Better?

  • Reading time:6 mins read

One of the main distinction between On-Premise (Legacy) and Cloud Enterprise Performance Management (EPM) software is how they are deployed and accessed by its users. While Legacy or On-Premise systems are housing on computers and servers, Cloud systems live on servers the software vendors own and are readily accessible through the web browser.

As an organization and business, you may be apprehensive of introducing new technologies for management of processes and data for many reasons. Let’s look at some factors to consider when choosing one EPM deployment method over the other.

What is Enterprise Performance Management?

Firstly, let’s understand what Enterprise (or Corporate) Performance Management is and how its tools help organizations analyze, report and better understand the business operations and performance. 

Common EPM processes include planning, budgeting, forecasting, and reporting on the financial results for the office of finance to see. Critical for managing a business, EPM software intersects both financial and operational data into insights to drive accurate decision-making and allow the organization to safely execute these calculated strategies and plans.

Cost Savings

Most Cloud software are often licensed to businesses as Software as a Service (SaaS). SaaS requires you to pay a recurring subscription fee for the vendor’s software license in order to utilize its features. On-Premise software requires businesses to purchase the software or hardware upfront and a skilled IT team to set up and maintain the system. In this case, the deployment of a Legacy system often involves hiring highly specialized experts or external consultants that understand how to deploy your specific application.

Although Cloud solutions are operating expenses and On-Premise as capital expenses, this does not necessarily mean its deployment costs less than an on-site (On-Premise) deployment. Take time to compare and calculate the cost of ownership over a set period to observe the actual comparison of the two options.

Customizations and Maintenance

The ability to customize and tailor your solution based on your organization’s requirements is crucial. For both Cloud and Legacy software, some business requirements may be more than a simple tweak, but you will need to enlist the help of the software vendor or an external consultant.

With Cloud updates, the vendor regularly provides maintenance and automatically applies changes to their platform as needed. However, the challenge of an n-premise system update is time and speed. From implementing an update on each computer to checking for systems errors, it takes time for a designated IT team to ensure all computers and servers are up to date. This can be a problem for business users as their work is contingent on accessing the system and data.

As your business is accountable for performing regular maintenance for their on-site system, it is common to skip or opt out of an update. However, if the system is left outdated for too long, your system risks becoming obsolete and unable to catch up to changes and the business environment.

Available Anytime and Anywhere

Cloud systems are easily accessible to your users with the web browser, given that your users have internet access. Additionally, Software vendors have also designed mobile applications for users to access data on a specific device.

In contrast, On-Premise systems are only available on-site as all computers rely on a centralized physical server. This means you cannot extend mobile access outside of your company’s office. Unless mobile access is necessary for your business users, you can set up this feature with additional tools and applications, requiring an added expense to your system.

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Security and Data Ownership

Organizations must be prepared with a security protocol to ensure data security and prevent any data breaches. A difference between Cloud and On-Premise software is the control and storage of data.

As Cloud systems are hosting on your vendor’s server, your company data is storing on an off-premise data center that you do not have complete control over. The physical restriction of a Cloud system can lower the risk of human interference by preventing unauthorized users from access sensitive company data. In the end, software customers trust and rely on the vendors to utilize encryption and apply various security techniques to keep sensitive data protected.

Legacy systems enable you to maintain complete control of your data and server. In this case, your organization is responsible for implementing the necessary resources and tools to protect company data. According to Cybint, 95% of cybersecurity breaches occur from human error. With servers housed internally, legacy systems are physically accessible, making it easier for unauthorized users to access the servers. In turn, your business must invest in extra security measures to prevent any personnel, visitors, and any unauthorized persons from retrieving your data.

Scalability

Growth and changes in the business environment are inevitable. As your organization’s headcount grows, your business must be ready to scale your system. Cloud and Legacy vendors charge your business based on the number of users that are using the system. Over time, you may discover that your business needs additional features and increased computing resources.

With a Cloud system, the vendor may charge you for the additional resources and features. However, they will take care of all the necessary hardware adjustments for its Cloud users. For an On-Premise system, you must ensure that your on-site hardware and specifications are ready to handle the additional workload and resource needs.

Get started with the right Enterprise solution for your business

Hopefully, this gives you a better outlook of Legacy and Cloud systems. The main takeaway is not deciding whether one deployment option is better than the other. It is making sure that the chosen application best suits your business’ requirements and long-term budget, and you have the right implementation team in place to deploy your solution. For more information on deciding which vendor or deployment option to go with, read more about our Vendor Evaluation Service.

If you have questions about whether an EPM deployment is for you, discover the right match for your business by connecting with one of our experts today at contact@prolyticsgroup.com

About ProLytics

ProLytics Consulting Group is a business and technology consulting firm that specializes in areas of Enterprise Performance Management and Financial Business Intelligence & Analytics. With decades of successful implementations, ProLytics understand and value that each company is unique. We are committed to working closely with each customer to to deliver value added technology solutions that solves their one-of-a-kind challenges.

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