Cloud vs. On-Premise Supply Chain Software: And the Winner Is….

Okay, I know what you must be thinking “Another blog post trying to convince me to move to the cloud (yawn).”

Before you click away, however, I urge you to stick around because today my goal is to present you with information on cloud and on-premise supply chain solution options, while avoiding any tongue-twisting marketing jargon (and I love marketing). I’m in this privileged position because Arkieva gives you the true option of choosing the supply chain solution deployment option that works for your business. Essentially our aim is to understand your current business processes and goals, creating a tailored solution that meets your specific business needs. If you require your supply chain software in the cloud, that’s what you’ll get, if not we implement the solution onsite in using your internal IT infrastructure and resources.

The Need for a Supply Chain Management Software

Most supply chain software solutions aim at helping businesses better integrate processes used in moving goods from suppliers to end users. Supply chain software solutions look to bridge the disparity between supply and demand by helping businesses better forecast, manage inventory and improve overall service productivity. In turn, companies that adopt the right supply chain management software can cut unnecessary operating costs and operate in a leaner fashion.

Why Choose a Cloud Supply Chain Management Software?

Cloud supply chain management software can mainly be in two forms; the more common form is a cloud-based solution (SaaS) built in a cloud-native environment, the other kind is hosting a traditionally on-premise solution in the cloud.

Regardless of the cloud service that your business employs the core benefits of having a cloud solution includes:

Lower Total Cost of Ownership (TCO): The Total cost of ownership refers to all the costs associated with getting your chosen supply chain management solution up-and-running. Costs include IT infrastructure costs, as well as implementation and training costs. With cloud hosting, businesses do not have substantial IT infrastructure investments to get a software solution running. The hosting provider assumes the IT infrastructure responsibility and in many cases, because of the sharing of infrastructure costs across multiple businesses, they can afford to provide the hosting services at a lower cost.

Improved Connectivity: For businesses looking to stay connected anywhere and anytime, the cloud seems like a more obvious choice when selecting a supply chain management solution. A cloud-based or cloud hosted solution help businesses connect regardless of their physical location. Making the cloud an ideal solution for businesses with multiple business units, offices, locations or a mobile workforce.

Seamless Upgrades: One of the main selling points for most cloud-based supply chain management software has to do with seamless upgrades. With a cloud solution, because the vendor manages most of the backend software resources, updates can be rolled out seamlessly with little to no interruption to day-to-day business. Maintenance is usually scheduled for non-business or non-peak times to avoid a disruption in normal business processes.

Data Redundancy: Cloud hosting offers a redundancy that some organizations may not be able to provide in-house. Data is usually backed up regularly either nightly, twice a day or hourly depending on specific business needs. Cloud hosting providers usually have their data backed up to multiple locations to ensure the redundancy necessary to have a business up-and-running in case of a disaster. And with an estimated 2/3 businesses never testing their backups, this type of redundancy can be invaluable for any business when there is the need for data recovery.

Security: Contrary to popular belief the cloud is not as susceptible to attacks as people may think. Granted every major data breach makes waves in the news, however, data centers and hosting companies have to employ the strictest data security to ensure compliance. Without the proper IT governance and company policy in place, your data may not be as safe as you think in your establishment.

Choosing an On-Premise Supply Chain Management Software

On-premise supply chain software deployment also has its benefits. And there are times when that may be a better-suited choice for business.

Here are some reasons why:

Better Sense of Control: Companies that want to be in the position to monitor where their data lives or have the need to use their security and firewall may opt for an on-premise supply chain solution. Additionally, managing a supply chain solution in-house could be a cheaper alternative if the business has already invested in the IT infrastructure needed or has a dedicated in-house staff.

Deeper Customization Options: The customization options with a cloud-based (SaaS) supply chain management solution may be limited. Fully configurable traditional on-premise solutions such as Arkieva, usually offer deeper customization processes for businesses with more complex supply chain processes.

Compliance Issues: Some heavily regulated industries do not allow the storage of sensitive information in a public cloud environment. And since most cloud-based supply chain management solutions operate in a public cloud environment, businesses with these constraints may decide to go with an on-premise installation.

At the end of the day, the cloud offers multiple advantages but depending on your specific business needs, implementing your supply chain solution on-premise may be more beneficial to you. It’s essential to perform a careful analysis of the pros and cons of either service to make a business decision that can propel your business forward today and in the long-term future.

In the cloud vs. on premise competition, there is truly no winner – only choices – and successes emerge when your deployment option delivers on its promise. And that is often centered on the core software itself instead of the delivery format.