Disadvantages of cloud–based ERP vs. on–premise, 20/04/15, ERP Integration

April 20, 2015

Summary of disadvantages of cloud-based vs on-premise ERP systems,

Subscription expenses (Periodic vs Capital expenditure)
Security risks
Performance risks
Customization and integration limitations
Strategic risks (high dependancy on service provider)
Compliance risks
Loss of IT competencies
Functionality limitations (Relatively new system)
Limitation on hybrid deployment strategy (retaining legacy systems and integration with on-premise solutions)
Service Level Agreement (SLA) issues

Reference: Duan, Jiaqi, et al. "Benefits and drawbacks of cloud-based versus traditional ERP systems." Advanced Resource Planning(2012).

Sofoklis Gkouzias

Another interesting disadvantage that the cloud ERP providers tend to replicate is the so called “cloudwashing”. With this term the CIOs express the purposeful and sometimes deceptive attempt by a vendor to rebrand an old service by associating the word “cloud” with it.

20 Apr 2015, 04:30

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