Top 5 Reasons to Deploy an ERP Application in the Cloud vs. On Premises

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With Microsoft Dynamics NAV becoming available as a cloud application on Microsoft servers this year, many clients and prospects have asked me which method of deployment is better for their company.  Like all good accountants I always say “it depends...”  Not all situations are ideal for deploying in a cloud environment but here are what I feel are the top 5 considerations for deciding if you should deploy on premises or in the cloud.

  1. Short term cash flow – since you generally do not have to invest large sums of money upfront in software and infrastructure like software, servers, peripherals etc. utilizing the cloud is ideal to get the software and applications with low upfront cash outlay.  However, watch the long term costs – it may be more costly in the long run. 
  2. Quick Go Live – since the infrastructure is already established and available almost immediately, the timeframe to  go live is reduced because the hardware and software sourcing, installation, and support goes from 1-2 months to 1 day reducing the time frame for going live
  3. Internal IT Support – if you do not have an established internal IT support group you might lean more toward a cloud solution because the IT support is externally handled and generally included as part of your monthly fee
  4. Complexity – if your ERP system does not have to integrate with other applications, your client access is more local than dispersed geographically, low user count, smaller revenue base ($10M-$80M) you might lean more toward a cloud deployment
  5. Internet Access – I know it seems odd in 2012 that not everyone has high-speed internet connectivity but without high-speed internet access, you can’t use a cloud application effectively.

There many other considerations but these are what I consider to be the top 5.  Let me know what you think and tell me about your Cloud successes/failures.

BDO Solutions is a national firm with local practices throughout Canada, a Microsoft Gold Certified Partner and Reseller of the Year in Canada for 2010, 2011 and 2012.

 By Mike Stranz, Partner, BDO Solutions. Leading Canadian Microsoft Dynamics ERP & CRM Partner.

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