At a Glance
For manufacturers, on-premise ERP delivers control, customisation, and compliance but demands higher upfront costs and IT support. Cloud ERP offers scalability, remote access, lower initial costs, and vendor-managed updates. The right choice depends on budget, security, growth needs, and the complexity of operations.
Why Choosing The Right ERP Matters for Your Manufacturing Business
Choosing the right ERP system is one of the most critical decisions your manufacturing business can make. The type of ERP solution and environment, on-premises or cloud, can also make a huge difference to the way your business operates.
Some manufacturing setups are drawn to the scalability of the cloud, while others are attracted to the low latency of an ERP on-premise. But which one is right for your organisation?
This guide compares both ERP environments and highlights the advantages of each for manufacturing setups, making it easier for you to make your decision.
On-Premises vs Cloud ERP for Manufacturing Businesses – The Key Differences
A cloud ERP is a system hosted on remote servers that users can access over the internet, whereas an on-premise ERP is a system hosted on your company’s internal servers.
Let’s understand how each ERP system compares across various key areas.
Implementation
On-Premises ERP
Setting up an ERP on premise requires in-house servers and IT staff to manage installation, updates, and troubleshooting.
Cloud ERP
In a cloud setup, no physical resource is needed, and all the updates, maintenance, and security patches are handled by the vendor.
Point to Consider:
A cloud-based ERP solution is more convenient and needs fewer resources for implementation, setup and ongoing maintenance.
Cost
On-Premises ERP
An on-premise ERP attracts a large upfront investment and a one-time perpetual license fee depending on your organisation’s size and number of concurrent users. Some vendors also offer subscription-based models. There are recurring fees for updates, maintenance and security patches.
Cloud ERP
On the other hand, a cloud-based ERP offers a monthly or annual subscription with recurring fees for updates, support, and training.
Point to Consider:
Most manufacturing SMEs may find the cloud-based model more flexible and cost-effective.
Scalability
On-Premises ERP
Scaling up may require major hardware upgrades and investment.
Cloud ERP
It’s easier to scale as your business grows. Add users and modules effortlessly.
Point to Consider:
With a lower upfront investment, opting for a cloud-based ERP is a predictable operating cost where scaling up and down is easier.
Accessibility
On-Premises ERP
Access is limited to the premises unless the right customisations are made for remote access.
Cloud ERP
Quick and easy to access, anytime and anywhere with a reliable internet connection. This feature can be invaluable for manufacturing operations in multiple locations.
Point to Consider:
Having a cloud-based ERP solution for your manufacturing setup supports your modern, mobile workforce and allows you to make more decisions on the shop floor in real-time.
Customisation
On-Premises ERP
In general, on-premise ERP systems are easier for manufacturers to modify, especially when they serve niche industries with specialised manufacturing processes.
Cloud ERP
The ability to customise may be limited or more complex, and depends on the vendor.
Point to Consider:
A cloud-based ERP solution may be considered as a more “out-of-the-box” solution for manufacturers. However, a cloud-based ERP like Microsoft Business Central is customisable with add-ons and extensions to suit the needs of your business.
Security
On-Premises ERP
In terms of security, an ERP that is on-premise puts more control in the hands of your organisation.
Cloud ERP
With continuous monitoring and automatic backups, a cloud-based ERP can provide good, if not better protection for business data.
Point to Consider:
Security was the key reason in favour of an on-premise ERP; however, cloud-based ERPs have significantly raised the bar on their security, investing in far more encryption, access controls, redundancy and monitoring systems.
Which is the Best ERP for Your Manufacturing Company?
The answer to this question can be determined with the following considerations:
- The size and complexity of your business’ operations
- Budget constraints in the short and long-term
- IT resources and expertise
- Security and compliance requirements
- Scalability needs for future growth
If lower upfront costs, remote access, and scalability are your priorities, then a cloud ERP is ideal. But an on-premise ERP may be a better fit if you operate in a highly regulated industry, need deep customisation, and want complete data control.
On-Premises or Cloud, Business Central Supports Both for Your Manufacturing Business
Every manufacturer has different needs when it comes to choosing the right ERP, and Brookland Solutions understands these needs. Microsoft 365 Dynamics Business Central’s cloud ERP is designed to meet the changing needs of modern manufacturers by offering flexibility, scalability, strong data security, and the ability to support remote and multi-site working. At the same time, we also understand that a business may have specific needs to prefer an ERP system on premise.
Looking for Business Central on-premise or on the cloud? No matter what your choice, we implement and support both on-premise and cloud-based/ SaaS ERP environments for Business Central.
If you’re unsure about which is the best option for your manufacturing business, reach out to us for advice on the advantages of each.
