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Cloud-Based vs. On-Prem BPA Solutions: What’s More Secure, Cost-Effective, and Scalable?
When you plan to implement business process automation (BPA) software in your company, one of the major choices you have to make is between a cloud-based or an on-premises solution.
On the one hand, you have a more traditional type of software that’s installed on company computers. You buy the software one time then it’s hosted on company computers and servers. Most maintenance goes through your own IT department.
On the other hand, cloud-based software is hosted online by the software supplier and your employees log in to access the system. Your company purchases a subscription to the software service and the software provider is responsible for maintenance, software updates, etc. It’s also called Software-as-a-Service (SaaS).
There are pros and cons to both types of software solutions, but for most companies, cloud-based systems will be the way to go. There are a few situations, though, where on-premises software has the advantage. We’ll take a look at the pros and cons of both in this article.
Purchase and Upkeep Costs
On-premises software typically has a higher upfront cost. You purchase the software once, then install it on company computers and servers. If you ever decide to upgrade the system down the road, then you’ll need to purchase updated software from the provider. Upkeep costs also include the costs of maintaining, expanding, or upgrading servers and other hardware used to run the program.
Cloud-based software typically has a significantly lower upfront cost. You’re purchasing a subscription to use the software and then it becomes a pay-as-you-go operational expense. In some situations, long-term costs might be higher with cloud-based systems because you have to keep paying the subscription, but you usually make up for that with the money you save. Cloud-based systems don’t cost your company anything in terms of hardware, server maintenance, or IT support.
With NextProcess, you also won’t pay any fees for adding additional users. You pay for what you use and can add as many or as few people to the system as you want. This helps keep costs down as your company grows.
Initial Deployment
If you’re implementing a new software system, Cloud BPA platforms typically offer faster deployment. With any process automation deployment, you want to take your time and make sure to get things right the first time. There’s planning and research involved whichever option you choose.
That said, you can typically count on a few months to have cloud-based BPA set up while some on-prem setups can take a year. With on-premises solutions, you might have to purchase new hardware, upgrade the IT infrastructure, or expand the IT team.
Here’s an example of how quickly you can implement a SaaS BPA solution. If you go with NextProcess for your accounts payable automation, you’re typically looking at as little as 60 days for initial implementation and 3 to 4 months to be fully set up for AP. That’s a lot faster than it would take to implement on-premises software!
Scaling and Software Updates
As you’re exploring your options for business process automation, you don’t want to focus only on what your company needs now. You also want to plan for the future. What happens when your company grows or if you need to give more employees access to your BPA software?
With on-premises software, upgrading the system as your company grows can be challenging and costly. You might need to pay for more user licenses if you need to add new employees. Your IT team might need to perform hardware upgrades, manually update the software, and maybe even re-implement customization as you expand. It’s enough of a hassle that many companies just keep using outdated software. With ERP software, for example, about 66% of mid-size businesses use an outdated version of their existing system.
Upgrading SaaS software is the supplier’s responsibility; they handle all the hardware and software upgrades for you. Cloud-based systems are also more flexible. If the number of invoices your company processes doubled tomorrow, the software would scale up to meet the new demand automatically. With transaction-based pricing the way NextProcess does it, you don’t need to clear additional transactions with your supplier and they won’t charge extra fees to add new users. You just pay for the services you use the same way as before. Similarly, if industry regulations change, you can quickly adapt a SaaS system to comply with new regulations.
Security and Control
This is the big reason that some companies still prefer on-prem software over cloud-based systems. Hosting your own software solution gives your company direct control over the system, including data security. On-premise solutions may be preferred in highly regulated industries or where data residency is critical.
Cloud-based solutions do offer high levels of customization and flexibility, but your company isn’t directly in control of the software. You still own all your data, though, and good BPA software providers provide quality cybersecurity. If you choose a reliable software provider with a commitment to cybersecurity, a cloud-based platform can even be more secure than an on-premises solution.
It all depends on what your company is prepared to put into the software. If your company has cybersecurity experts to handle data security for on-premises software, then that can be a more secure solution. But if you don’t have those resources, then your system can be more secure if you use cloud-based BPA where the software supplier specializes in cybersecurity.
An End-to-End Cloud-Based Solution
CFOs must weigh long-term costs, scalability, and cybersecurity risks when comparing on-prem and cloud-based BPA software solutions. For companies that opt for the easy deployment, low IT requirements, scalability, flexibility, and security of cost-effective cloud-based systems, NextProcess provides a unique solution.
NextProcess offers the only suite of software with modules to power and simplify budgeting, project management, purchasing, accounts payable, and payments. It’s a real end-to-end solution for capital project management, procurement & purchase orders, accounts payable, travel & expense, and payment disbursements. Our software integrates seamlessly with existing ERPs and we’ll work with you during implementation to customize the software to your company’s exact needs. We’re always adding new features and staying up-to-date with the latest in cybersecurity. Contact us today to learn more and schedule a free demo.
