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By: Evin Davis

Comparison between Traditional Vs Cloud-based ERP

The need and necessity of an enterprise and resource planning software came into existence after the introduction of the digitalization era. This was during the earlier 90s of the last century. However, the ideology was established long before to provide business management with the help of various terminologies. Enterprise and resource planning software found its boom during the wake of the century and became an inevitable part of any business organization. As the need became vigorous there was an expansion of numerous types of these software solutions across the world offering business management to the companies.

Today the ERP business offers a variety of applications based on the needs of the user. Moreover, you could say that there are so many of them that you need to prioritize them with your parameters to find the right fit. Nowadays, ERP implementation has become common and numerous companies are offering them all across the globe. These implementations vary from sector to sector, small to large scale companies or multinational ones. Moreover, there are various huge brands such as Toyota, Hyundai, and many more.
This blog will provide an insight into the comparison of traditional and cloud-based ERP solutions. 
As mentioned earlier as the need for the ERP grew there was a variety of them available all across the world. Among them, the most based classification would be on their operating terminology. Moreover, initially, these ERPs can be classified as Traditional or Cloud-based ERPs based on their hosting aspects. This is one of the base classification available among the ERPs. Cloud operations in the world have changed the functioning of most of the technological aspects. With additional storage and remote functionality cloud-based operations he an extra edge of advantage over others.

Comparing cloud-based and traditional ERP


The hosting of the ERP is a vital aspect of operations and it mainly depends upon the ERP capabilities in the user needs and operational terminologies. Almost all ERP solutions provide the user with multiple hosting options which would make it more capable to reach a wider customer base.
Traditional ERP can be implemented based on two solutions one being on-premise one and another hosted. Premise hosting takes place within the customer establishment which would be costlier for them as they need to purchase all the equipment needed. Moreover, the human resource for such implementation should also be hired and trained by them which would add up to the cost.

However, cloud-based hosting delivers a SaaS-based software model for its customers. Which can be hosted in cloud-based on subscription charges and no headache of implementation, server, and skill hiring.


Security is an inevitable part of a business operation using software that cannot be sacrificed at any cost. The traditional ERP solutions are considered more secure than the cloud-based ones as they are operating from a considered system and are not connected. However, cloud-based ERP solutions are secure and are established based on various security protocols of operations.


Considering a small or a medium scale business the ERP implementation would be a costly aspect however bring in relatable profits after implementation in a short span. The cloud-based ERP mainly operates based on the implementation and subscription charges which are lower compared to the traditional ones where the customers need to acquire their equipment.


The performance of both the traditional and cloud-based ERP is on the same level and almost go hand in hand in the comparison charts. However, the traditional one has an extra nudge of speed and performance due to the in house implementation aspects.


Considering any business operations it would either grow and stretch its branches or cut down on some of the operations due to the backlash in the market or various other internal factors. Considering a business management solution it must be capable to undergo these adaptations well. In comparison, Traditional ERPs seem to be limited to this capability as it's a product-based model rather than a cloud-based ERP solution which is a service-based model. Moreover, the traditional one cannot be further customized and fled to meet the customer demands at instances other than initial implementation, on the contrary, is possible with cloud-based solutions.

In conclusion, both the ERP obsessed medals will exhibit certain qualities and capabilities in the operations of a company. However, is ultimately the customer's choice to choose based on their priorities and parameters of operations.

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