The manufacturing industry is such a complex one. It has always felt the need for robust solutions that will assist their many intricate endeavors. Based on the sector’s various conditions, the market has delivered comprehensive solutions as well. However, in particular, one name has become massively popular among manufacturing companies: Enterprise Resource Planning systems. ERPs enable the manufacturing industry to ensure seamless integration and organization of the many processes, operations, and data spread all across the business. The aim here is to help cut down costs, ensure the high quality of products, and so much more.

And sure enough, the industry recognizes the value ERPs offer too, yet they are unfortunately held back from embracing them. It is because of the difficult decision that is choosing between on-premise ERPs and cloud-based ERPs. Nonetheless, a comparative evaluation of both options is a must to make an informed choice.

1. On-premise ERP: This type of ERPs involves physical systems located within the company’s premises.


  • Since these use on-premise systems, they don’t need internet connections for access. In turn, it means continuity with or without an internet connection, i.e., high levels of reliability.
  • Only companies have access to their on-premise systems, which goes a long way in ensuring high-security levels. It is for their data, intellectual property, and other sensitive materials.


  • Given that it involves a physical set up, the company must invest a sizeable amount of money in setting up the infrastructure. It is then followed by regular maintenance expenses along with other such costs.
  • While more prominent companies have access to a broader range of resources, including the extensive expertise required for the set up and up keep of these systems, small-scale companies are likely to struggle in this department.

2. Cloud-based ERP: As the name suggests, this type of ERPs uses virtual servers that are not hosted by the company but a third party.


  • Since the company does not have to invest in infrastructure, set up costs, etc. cloud-based ERPs are considerably more affordable to access and use.
  • Yet another critical advantage preferred by such ERPs is the ease with which they can be scaled. It allows companies to start with precisely what they need and then mount the system as their business grows, without needing to fret over significant additional investments.
  • These systems automatically backup, which ensures the systems and processes can be restarted with ease in an incident or emergency.


  • The data is with a third party, so inherent risk and the need to put the responsibility for security in the service provider’s security measures to protect your data.
  • To access these systems and the data stored within it, a reliable connection is an absolute must at all times.

Now, no matter the option you opt for, be sure to hire a trusted vendor for manufacturing industry software solutions. Their expertise will help ensure you have a tangible product to work with.

Author's Bio: 

Kaushal Shah manages digital marketing communications for the enterprise technology services provided by Rishabh Software. This article gives you the comparison between On-premise ERP and Cloud-based ERP for manufacturing businesses.