Traditional on-premise software consists of application packages that a company purchases outright. The company hosts the software within its own physical location.
Cloud-based systems on the other hand, whether they be software as a service (SaaS), platform as a service (PaaS), or infrastructure as a service (IaaS), are owned, delivered, and maintained by an external provider.
As the adoption of cloud-based applications become more common, many construction organisations are now realising their efficiency and financial benefits. However, many companies still struggle with whether to commit to a cloud-based or on-premise solution for their organisation. While there are many considerations when choosing which option to deploy, the following points may help guide your company’s decision:
The first consideration is to look at your current business infrastructure systems. Is your company experienced in implementing on-premise systems? Has it acquired the necessary infrastructure such as servers, networks, security, insurance, and IT employees to maintain the system? If yes, then leveraging the existing infrastructure when adding a new application to the network would likely to be the better option.
However, for most small-to-medium businesses, the initial and ongoing investment to implement this infrastructure is likely not feasible, and therefore a cloud-based application may prove to be a better solution. This allows a business to focus less on the internal IT infrastructure and application delivery and more on the businesses itself.
Access and flexibility
As cloud-based applications are hosted within a private cloud, users can access their accounts via mobile/tablet devices at any time with an internet connection. This allows for more flexible work patterns, and allows construction workers to access their project information from their smart devices. This provides more flexibility than being tied to a physical office or VPN.
The downside to most cloud applications is that there is a requirement for internet access, which sometimes is not possible on a construction sites. There are, however, applications that do provide offline version capabilities if internet connectivity is a constant problem for your sites.
Historically, the most flexible options when it comes to customising or integrating with other applications have been on-premise solutions. They can be simpler to implement, and can also be faster to transfer data between systems over an intranet.
However, there are many evolving cloud-based applications that allow more configurable settings and processes for their users. Many companies also see performance improvements by standardising their business processes with external vendors that follow more up-to-date best practices.
The procedure of developing programs with a standard Application Programming Interface (API) allows the connection and data transfer between various cloud systems to be relatively easy to set up once the software vendor has provided the connection. It is important to check that your potential software vendor can provide an API solution that will allow your cloud system to interface with other business systems you are currently using, such as accounting and CRM.
Cloud-based systems are often more cost effective because you have access to upgrades and new features (often free) as well as fix issues. This is because the software vendor will have a team in place to perform the necessary system testing and assign a more regular out of hours upgrade schedule.
For on-premise solutions, it is the business owner’s responsibility to perform these upgrades and fixes. This can be an expensive and time consuming process which often affects the businesses productivity during downtimes.
Support and maintenance
There is low IT dependency on in-house support using a cloud-based system, as the software vendor should have in place a support team to assist with enquiries. It is important to read reviews or talk to people using the software to find out if support enquiries are dealt with in a timely manner.
On the other hand, on-premise solutions have greater control over support, but it can be expensive to have a dedicated in-house support team. Another issue is that the business owner is responsible for any infrastructure issues and disaster recovery responses, whereas with the cloud-based option, the risk is taken on by the cloud vendor.
Solutions in the cloud allow you to scale up rapidly to meet business needs with little to no down time. Similarly, the flexibility to scale down is just as easy. On-premise solutions require long-term planning to acquire the needed resources to scale up. Another consideration is that the network load at peak times need to be analysed and then accounted for in the on-premise infrastructure.
There are high entry and upgrade costs for the operations and infrastructure of on-premise systems compared to cloud-based solutions. The usual subscription model for cloud services can also be categorised as an operational expense, providing good tax incentives.
IT consultancy Software Advice created a model that indicates there are cost benefits for cloud-based systems for the first 10 years and then it equals out. At the five-year mark, on-premise solutions need to be upgraded at a cost similar to the initial investment, so it is important to plan for major upgrades.
There are also flexible payment plans for most cloud-based solutions that allow you to choose the subscription that is right for your business, and allow you to accurately predict the costs of the subscription every year.
There are advantages and disadvantages for both implementations. What your company must determine is whether it has the necessary funding, experience, and resources to host the required infrastructure in-house. If this is not feasible, then looking toward established and recommended cloud-based systems can be a more financially viable option and can greatly reduce the responsibility of ongoing maintenance, upgrades, and support.