What is better? On-premise or online system

I know that many business owners are using various forms of technology. When it comes to putting in place a business system, we are today faced with more options than was the case before.

Should you get a system housed at your business premises or should you go online? What are the advantages or disadvantages of either?

I am sure many investors have found themselves trying to figure this out and for those who have not, it is only a matter of time.

Let us look at a business system housed in your business premises. What would you consider?

One, you need to have a computer where the system will be installed. If the system will be used by many staff, this computer will be better off as a server. A server is a computer that hosts an application used by multiple users.

When you have a server, you will need a computer network so that all other computers can connect to the server.

These items reflect only infrastructure costs. You may need an full-time or part-time IT support technician.

The cost of an entry level computer today is about Sh25,000. Coupled with a server, you may need to spend between Sh150,000 and Sh200,000.

If you choose a portable device such as a laptop or tablet, the costs many not be any different.

Many business management systems, may cost you at least Sh50,000. This is a fairly high amount of money. For this, many investors view the cost of acquiring technology as expensive and opt out or go for the unethical options such as software piracy.

CHEAPER ALTERNATIVE

Another cost could be Internet connection to aid communication. I have seen business owners who opted to forego technology investment in favour of say buying stocks.

Everyone needs a return on investment but for technology investments in SMEs, many investors may shy away.

If you opt for an online system, you will certainly save on a server and networking.

You will, however, need computers for the staff who access the system. Internet service providers these days provide customer premise equipment that allows one to setup a wireless network. With your Internet connection and portable devices such as laptop, tablet or phone, you can easily connect to the Internet.

The beauty of an online system is that you can access it wherever you go with your laptop, tablet or phone.

Also, online business system costs much less to acquire. You can begin with as low as Sh500 per month to get basic business services such as accounting, payroll and quotations.

You can therefore access or update your business records from anywhere and at anytime.

This is why online systems also called cloud systems are becoming very popular all over the world.

When you go on a business trip to China or Mombasa, you will have access to your system as if you are in the office. With an on-premise system, you leave everything in the office.

SECURE CLOUD

If you have a desktop accounting system such as Quickbooks, only your accountant or the person with the computer on which it is installed is able to access it.

If a malicious person wanted to destroy your business and God forbid, you did not have a backup, all they need to do is take away the server hard disk or the one on the computer where your accounting system is installed.

With an online system, even if someone broke into your car and took away your laptop, you can jump into the next cyber cafe and access your business records.

This is because online systems do not store information on the computer you use to access the system but on secure cloud servers.

You may think that an on-premise system means a one off cost, my experience is that you will still make a support call once in a while to the vendor. Think wisely while choosing between on-premise or online business systems.

I, however, know for sure that the future will shift to the cloud more than in the premises.