How does the ROI of Cloud ERP compare to on-premise systems?


When you are trying to choose between two ERP systems, the final decision often comes down to ROI. That is a smart strategy, but only if you are correctly calculating ROI. When it comes to business systems, pinning down exact estimates of investments and returns can be challenging.

To help your team make more informed decisions about the future of your technology system infrastructure, we have compared cloud ROI vs. on-premise system ROI head to head.

Up-Front Investment

If you decide to house your technology assets on premise, you will need to purchase all the hardware and software yourself. On-premise hardware is a major capital expense. Plus, it requires you to have IT experts on site to help you set things up. You will also need to dedicate space inside your office to this equipment, which is another cost to consider. Cloud ROI, by contrast, is an operational investment that requires no on premise hardware and your capabilities can be better matched to address the company’s needs. With cloud systems, you have the opportunity to get what you need at the lowest upfront cost.

Ongoing Costs

When your technology assets are housed on-premise they create major ongoing and unavoidable costs. On-premise systems require companies to pay a lot more for utilities, maintenance, repairs, and replacements. But if you rely on cloud technology systems instead, you have the opportunity to eliminate every one of these on-premise costs. The cloud gives you access to powerful technologies like cloud ERP software but does not require you to pay for on-site hardware to keep those technologies up and running effectively.

Short-Term Returns

Deciding to house your technology assets on-premise forces companies to accept smaller returns after a longer period of time. Teams have to invest so much up front in the early days of an on premise deployment and are often tangled with problems, setbacks, emergencies, and impasses. Unwelcome costs can easily add up in on-premise implementations, and the promised benefits arrive in a trickle rather than a torrent. The implementation process is efficient and expedited with cloud technology systems. With the cloud, the benefits are available to your team faster, and the ROI is expedited.

Long-Term Returns

While on-premise systems may give companies more control, it’s important to recognize that control doesn’t necessarily translate into greater value. In practice, that level of control is not significantly greater than what is available in the cloud. Essentially, the best argument for going on-premise with technology systems, which is perceived system control,  is less of a long-term asset than companies expect. The cloud is much better suited to generate long-term returns because it empowers your team to operate with agility. The success of your technology systems with cloud infrastructure moving forward is directly correlated to ease of use and it’s ability to change. The cloud lets you change processes as it makes sense for your business, quickly and confidently.

The cloud is the better choice for companies interested in ROI. And why wouldn’t you prioritize the solutions that deliver the most value for you, your team, and your collective future? To learn more about how the cloud excels and exceeds, sign for a free demo of Kenandy’s cloud ERP software today


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