ERP Solutions On-premise SaaS

Comparison: SaaS vs On-premise ERP Solutions

Apr 11, 2022

0 Comment by Viewers

SaaS vs On-premise ERP SolutionsWhen expanding your business globally, opting for an on-premise solution may be your preferred choice due to its significant control and adaptability. Traditionally, organizations licensed enterprise software, then implemented it “on-premise”—in their own or controlled physical location—and provisioned the hardware, infrastructure, and support to set it up and keep up with it for representatives. On the other hand, a SaaS solution refers to software that at least one supplier owns, conveys, and manages remotely.

The supplier provides software with a set of common code and information definitions that are consumed in a one-to-many model by fully contracted clients, either on a compensation-for-use basis or as a subscription-based service based on purpose measurements. However, before you succumb to this temptation, you should contemplate whether a different solution would better fit your business needs.

SaaS vs On-premise ERP Solutions


Before getting started, the benefits of the SaaS (software-as-a-service) solution are as follows:

  • Reduce upfront costs.
  • Improve business agility.
  • Simplify forecasting of future costs
  • Strengthen security
  • Accelerate the time to market.


There are several reasons to choose a SaaS solution over an on-premise solution, including initial and ongoing costs, deployment, security, and support.

SaaS vs. On-premise ERP: Pay for What You Need

With a SaaS solution, you only pay for the services you need, eliminating the need to purchase hardware for your new applications. Rather than relying on limited internal resources to install and maintain the software, the SaaS vendor provides all the necessary hardware and implementation services, handling a significant portion of the work to ensure the software is operational for you.


Additionally, the pricing structure for a SaaS solution is typically very flexible, depending on your needs.


  • Monthly recurring fees
    • Monthly fees are all-inclusive of maintenance and service, which often lowers the cost compared to on-premise software.
  • Implementation
    • Implementation fees for a SaaS solution can be significantly lower than those for an on-premise solution because of the SaaS model’s outline.


This flexibility in pricing can make a big difference in the ability of sales or marketing to budget, afford, and get approval for a specific application or tool.


Cash Flow, Timing, and Accounting

SaaS and on-premise solutions have essentially unique funding models. Traditionally, we have treated on-premises as a one-time capital expense, automating it over the assets’ lifetime. So it generally requires an upfront payment, either straightforwardly from the actual company or through a lease or loan from the company.

Cloud computing offers a unique model that treats on-premise expenses as ongoing operating expenses. The on-premise expense approach often provides opportunities for investments that can revolutionize the business. However, a cycle continues many years after you submit, so understand that this was in your plans.

SaaS software also provides you with the advantage of predictable costs, both for the subscription and somewhat for the administration. Indeed, you can visually estimate costs as you scale. This allows for considerably more accurate planning, especially when compared to the costs of internal IT resources required to manage, maintain, and upgrade issues for a claimed instance.

Scalability and flexibility

A SaaS solution enables you to scale rapidly compared to an on-premise solution. Assuming that you’re hoping to expand to different domains or in a rapid development mode, SaaS can essentially add more servers and capacity according to your needs, taking into account your network load as well. Conversely, if your peak-to-average load ratio is high, on-premise would necessitate a substantial infrastructure investment to manage the peak, an investment that would largely remain underutilized.


SaaS - Cloud Computing



Generally, on-premise software is more customizable than SaaS because vendors have built more comprehensive software development kits (SDKs) for these systems. Most companies customize their software to some extent to meet the needs of their business. This is changing somewhat, with SaaS more configurable today than it was 5 years ago, but still not to the level of on-premise. The flip side of this is that companies using SaaS can standardize their business processes and often see performance improvement since the new processes are generally more up-to-date with best practices over time.


Less deployment time and a better user experience

The time to a functioning solution is almost always a lot more limited with a SaaS versus an on-premise option. The traditional on-premise model could take months for an organization, but the SaaS model reduces that time to weeks, days, or even hours. This is due to the time lags associated with internal IT provisioning software and necessary hardware, as well as competing projects for IT’s time. Consequently, your application setup falls behind schedule.

“SaaS solutions typically offer seamless, automatic, continuous upgrades as part of the ongoing subscription charge. As these upgrades happen more frequently and incrementally than on-premises solutions, they typically have significantly reduced testing, end-client acceptance, and training costs.”


Ensure Security

Since the vendor facilitates the software under the SaaS umbrella, they assume general responsibility for its maintenance and upgrades, ensure its reliability, and meet agreed-upon service level agreements by maintaining the application and its data at the highest level of security.

While you may stress over security outside of the enterprise walls, the possible truth is that the vendor has a much higher level of safety than the client’s enterprise itself would provide. Many SaaS providers offer long-term air instances in highly secure data communities across various geographies. Additionally, the vendor automatically backs up the data, providing additional security and peace of mind. Furthermore, the data-focus facilitation gives you the added benefit of at least some disaster recovery.


Easy access and more flexibility

Clients can access SaaS software via cell phones from any connected location, thanks to its facilitation in a private cloud and Internet accessibility. Cloud applications’ global accessibility may enable more flexible work schedules. You shouldn’t bind your family to a physical office or VPN. That being said, there may be locations where wifi or Internet access isn’t reliably available; however, these situations will generally become rarer as time passes. If so, an application that is only available online could be a masterpiece.


Vendor Viability

Lastly, any business should consider the stability and long-term viability of any software vendor, both on-premise and SaaS. When it comes to on-premise software, you have control over the software on your infrastructure, which allows you to continue using the application for a considerable amount of time before transitioning (although there are some drawbacks). For SaaS, the gamble is substantially more pronounced than should be considered. On the off chance that your SaaS vendor disappears, there is no guarantee of continued support for your application, no matter what the transition plan may be. A few key points can ensure the continuous operation of your SaaS solution. Understand your vendor:


  • Does it have the skills and solidarity to keep the business in a serious market in the future?
  • What is the company’s size?
  • What different sorts of clients do they have?
  • On the off chance that you see different companies like yours on their client list, this will, in general, decrease risk.

Leave a Reply

Your email address will not be published. Required fields are marked *