Brian Carlson, CornerstoneEdge Principal, and Jim Noblitt, owner of TTilbon Management Consulting, have been maneuvering the supply chain space together for over 25 years. One thing that has remained constant? Their ability to work together despite their differing opinions. In fact, one may say this is why they work so well together. Their disparate insights make way for bigger learnings, unlocking productivity and efficiency. They recently sat down for a conversation about the difference between selecting an on-premise versus a cloud-based solution for running a warehouse. Here’s what these experts had to say.
Brian: Jim, why don’t you start us off with an explanation of the fundamental differences between on-premise and cloud-based warehouse solutions software?
Jim: I’ll break it down for our audience. The primary difference lies in where the software is hosted and how it’s maintained. On-premise solutions are installed and operated on a company’s own servers and infrastructure, typically within their premises. And cloud-based solutions are hosted on remote servers by a third-party provider, accessible over the internet.
Brian: OK, so I know you’re a big fan of cloud-based warehouse management solutions, so why don’t you tell me why? What are their primary advantages?
Jim: I think we can both agree that cloud solutions offer several benefits, like cost savings and scalability. With cloud solutions, businesses can avoid the upfront costs of purchasing and maintaining hardware, as well as the ongoing expenses associated with infrastructure management. They also provide flexibility and scalability, allowing businesses to easily adjust resources as needed to accommodate changes in warehouse size or business growth.
Brian: That’s true. But we can’t ignore the downside of the cloud, which is the lack of control over when upgrades happen. The system will suddenly change without warning, or something may not work the way it used to, and there is nothing the user can do except deal with it and move on.
Jim: That is a good point.
Brian: Now, there are situations in which an on-premise solution makes more sense, like businesses with specific security or compliance requirements. An on-premise solution offers greater control over data and infrastructure. And we can’t forget about companies operating in remote locations with limited internet connectivity. For them, an on-premise solution is almost always more practical.
Jim: Sure, but don’t forget that an on-premise solution requires infrastructure and a dedicated IT team. The most likely scenario for an on-premise deployment would be where the client already has an on-premise environment for all of their other solutions and a current IT strategy to remain with an on-premise IT infrastructure. Like with almost any decision, especially concerning enterprise software, it’s essential to weigh the benefits and drawbacks of each option based on the organization’s unique needs and circumstances.
Brian: That’s something we can both agree on! OK, let’s move into the meaty part: cost. How do the costs compare between implementing an on-premise solution versus a cloud-based solution?
Jim: The cost comparison between on-premise and cloud solutions depends on a whole variety of factors, including setup, maintenance, and scalability. While on-premise solutions may involve higher upfront costs for hardware and infrastructure, cloud solutions typically offer subscription-based pricing, spreading costs over time. And remember, cloud solutions often include maintenance, updates, and support as part of the subscription fee, which could potentially help reduce long-term costs for businesses. And then there’s everything to consider when it comes to scalability.
Brian: Right, we need to consider how on-premise and cloud solutions accommodate changes in warehouse size or business growth. We all know scalability is a critical consideration for warehouse management solutions. Typically, with an on-premise solution, scalability requires additional hardware and infrastructure investments, which can be time-consuming and costly.
Jim: Yes, that’s one of the many reasons I believe the cloud is the way to go. With cloud solutions, you have automatic scalability, allowing businesses to quickly and easily adjust resources as needed without significant upfront investment. This flexibility is particularly useful for businesses experiencing rapid growth or seasonal fluctuations in demand.
Brian: We’re living in a time where security both on and offline is critical. So, tell me, what do you see as the security implications of choosing an on-premise solution compared to a cloud-based one? From where I stand, on-premise solutions give companies full control over security measures, including physical access to servers and data.
Jim: You’re right, security is a top priority for warehouse management solutions, regardless of deployment method. Cloud solutions often provide robust security measures, including data encryption, regular backups, and access controls, managed by experienced cloud service providers. Ultimately, the choice between on-premise and cloud solutions should consider the organization’s specific security requirements and risk tolerance.
Brian: I know there’s one more thing we can agree on, Jim. It’s clear there are many factors to consider when deciding between on-premise and cloud solutions for warehouse management, it’s not a one-size-fits-all solution.
Jim: You’ve got that right. No doubt about it. I’ll say one last thing. Arriving at an appropriate strategy regarding cloud versus on-premise would have to consider the total cost of ownership over a 3 to 5 year period, the reliability of connectivity to the web, and whether the company already has an on-premise environment — and that’s just the beginning.
Decisions like whether an operation should invest in an on-premise or cloud solution can’t be made in a vacuum, and it can’t be made overnight either. With so many factors to consider, it’s often best to bring in an independent consultant to give you a macro and micro look at the entire operation so you can make an informed decision. Clean data and deep analysis go a long way in ensuring you’re making the right decision.
That’s what we do here at CornerstoneEdge. We’re a supply chain partner, focused on helping you get the most out of your supply chain. If you’re looking to make any big changes in your warehouse, reach out, and let’s see how we can help make your supply chain your differentiator.