Cloud or on-premise ERP? Get the best of both worlds with hybrid ERP System

2 Minutes

Use the ERP system on your own servers or would you prefer a cloud version? For many food companies, this is the crucial question when it comes to business software. But more and more often both are possible.

On-premise software, i.e. the use of software installed on local servers of a company, has long been considered the optimum solution. However, cloud computing is becoming increasingly important as it provides users easy and elegant access to data and applications irrespective of their location. Its benefits are clear, particularly for applications accessing data sources on the internet. It is therefore not surprising that software for marketing, sales, and logistics was the first to be moved to the cloud. According to a recent IDG survey, 35 percent of the respondents said that “access from everywhere, and with mobile devices” is the main reason for using a cloud ERP. Another 35 percent expect cost reductions in the IT infrastructure. Especially for service companies, cloud ERP systems provide many advantages.

To date, the situation in production is quite different, because primarily data sources from within the factory, such as machines or warehouses, are processed here. Data from the internet does not need to be available in real time, whereas factory data is critical. Cloud ERP in production is not an easy feat due to the risks related to availability and security. Only 20.3 percent of the respondents in the IDG survey claimed they had no reservation about the cloud technology. In most cases, cloud ERP systems do not cover the entire range of functionalities nor do they offer a comparable high degree of customization.

Today, the prevailing opinion is that data should best be processed as close as possible to its origin and application, keyword: edge computing. In some cases, decentralized is better than centralized - in particular, when it’s a question of data availability and security. As the IDG survey indicated, 25.5 percent of the cloud skeptics “feel exposed”, and just as many of the respondents do have concerns regarding security. Nearly one quarter (24.5 percent) refer to “giving up control”, while 15.1 percent see the high degree of standardization in cloud ERP as an issue.

On-Premise ERP still the right choice for food companies

For most companies in the food and beverage industry, not moving their ERP system to the cloud, and continuing to rely on an on-premise software instead, may therefore be the right choice. Web solutions, portals, or mobile apps can then supply and process the information and data that is required when you are on the move. Typical examples of this include management reporting, field service applications, and subsidiary management portals.

On-premise ERP systems have now evolved into hybrid ERPs. Today, on-premise ERP software uses modern web technologies to combine the best of both worlds: processes for the field service or for customers are running on web portals, reports are available on mobile devices, and mobile apps complement the powerful applications. Business-critical IT services remain within your own company. This approach has been chosen by 12.6 percent of the companies, according to the IDG survey. Combined with the traditional strengths concerning security and availability, companies using hybrid ERP systems can benefit from the advantages of cloud computing without having to accept its drawbacks.