True-Cloud or Cloud-Hosted? Why a True-Cloud ERP is Right for You

Cloud-based ERP (enterprise resource planning) systems have recently become increasingly popular. This is due to their numerous benefits, such as cost-effectiveness, scalability, and accessibility. These systems allow businesses to manage their resources more efficiently by integrating functions like finance, human resources, and supply chain management into a single platform. When choosing the right type of cloud-based ERP for your business, you may come across two terms: true-cloud and cloud-hosted.

True-cloud ERP systems are designed and built specifically for the cloud, offering scalability, flexibility, and automatic updates. In contrast, cloud-hosted ERP systems are traditional on-premises solutions adapted to run on cloud infrastructure. This adaptation can result in less seamless integration and performance, potentially causing inefficiencies. 

Choosing a cloud-hosted ERP means you might miss out on true-cloud solutions’ full benefits. For instance, true-cloud ERPs provide automatic updates. This ensures your system is continually updated with the latest features and security patches. We jokingly compare cloud-hosted systems to FaceTiming your grandparents, who try to show you something on their TV! In comparison, true-cloud systems are like Netflix, constantly updating and providing updated content to enhance your experience. 

Understanding these differences is crucial for making an informed decision that fits your business needs. This blog explores the differences between these two types of cloud-based ERP systems. Read on to learn how we can help you determine which is best suited for your business needs. 

Understanding True-Cloud ERP 

A true-cloud ERP solution operates entirely within a cloud environment. Here’s what you should know: 

Pros: 

• Scalability: Easily scale resources based on demand, whether to expand during peak times or reduce during slower periods. 
• Cost Efficiency: The pay-as-you-go model helps reduce upfront costs, allowing you to allocate your budget more effectively and avoid unnecessary expenses. 
• High Availability: True-cloud ERP’s built-in redundancy ensures minimal downtime, providing consistent and reliable access to your services for all users. 
• Managed Maintenance: Providers handle updates and security patches, allowing your team to focus on core business activities and innovation. 
• Quick Deployment: New features and updates are quickly and seamlessly deployed, enabling you to stay competitive and respond rapidly to market changes. 

Cons: 

• Less Control: The ability to customize infrastructure and tailor specific hardware or software settings to unique business needs can be limited. 

Exploring Cloud-Hosted ERP 

A cloud-hosted ERP involves hosting an ERP system in a cloud environment dedicated to a single organization. 

Pros: 

• Customization: Greater flexibility to tailor the ERP system to specific needs, allowing businesses to adapt the software to their unique processes and workflows. 
• Enhanced Control: More control over configurations and settings, enabling organizations to fine-tune the system to better align with their operational requirements. 
• Dedicated Resources: Resources are not shared, leading to consistent performance and reliability, as the system’s resources are devoted solely to your business operations. 
• Security: Potentially more robust security measures tailored to your requirements, providing more protection for sensitive data and reducing the risk of breaches. 

Cons: 

• Higher Costs: Cloud-hosted ERPs often require more investment due to dedicated infrastructure, including hardware, software, and physical space. These expenses can add up quickly, impacting the overall budget. 
• Manual Maintenance: Your IT team needs more hands-on management, including routine checks, updates, and troubleshooting. This can lead to increased labor costs and the need for specialized skills. 
• Scalability Challenges: Scaling may not be as seamless as true-cloud solutions, often requiring significant planning and resource allocation. This can result in delays and increased complexity in managing growth. 

Making the Right Choice 

When deciding between true-cloud or cloud-hosted ERP, consider the following questions to make an informed choice: 

• What are your scalability needs? Suppose your business requires rapid scaling to accommodate growth or seasonal demand. In that case, a true-cloud solution might be better suited due to its inherent flexibility and ability to scale resources up or down quickly. 
• How much control do you want? A cloud-hosted option could be ideal for businesses seeking more customization and control over their ERP system. This allows for tailored configurations and dedicated resources, providing more autonomy in managing and maintaining the system. 
• What’s your budget? It’s crucial to assess each option’s total cost of ownership, including upfront costs, ongoing subscription fees, and potential hidden costs. True-cloud solutions often have predictable, subscription-based pricing models, while cloud-hosted solutions may involve more variable expenses. 
• Do you have an IT team capable of managing the system? True-cloud solutions require less hands-on management since the service provider handles most of the maintenance and updates. Conversely, cloud-hosted ERP systems might demand more involvement from your IT team for system management, updates, and troubleshooting.  

These considerations will help you align your ERP choice with your business needs and capabilities. The team at BrainSell also has a wealth of experience to help you make the right decision.

Ready for True-Cloud ERP?

Both true-cloud and cloud-hosted ERP solutions offer unique advantages. True-cloud solutions are inherently scalable and accessible, allowing real-time updates and seamless integration across various devices. On the other hand, cloud-hosted ERP solutions provide greater control over data and customization options. This is often more suitable for businesses with specific compliance requirements. 

By understanding your business needs and weighing the pros and cons, you can select the solution that best aligns with your goals. Would you like more insights on deploying ERP solutions? Our team of experts is ready to guide you through the decision-making process, ensuring you choose the right system for your business’s unique needs. Contact us to learn how we can help you make the right choice.