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April 20, 2015

Disadvantages of cloud–based ERP vs. on–premise

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).


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