In today’s digital landscape, having your head in the cloud is a competitive advantage. If you’re thinking about implementing an eCommerce solution to capture more online sales while enabling the retail shopping experiences your customers love – such as inventory visibility, in-store pickup, and fast fulfillment through ship-from-store – chances are you’ve already begun weighing the pros and cons of an on-premise versus Cloud-based solution.
From call centers to health centers, retailers to government agencies, more and more organizations are considering Cloud-based services to power leading-edge communications, CRM, collaboration and commerce. Make the right choice, and you can save your retail or manufacturing business tens of thousands of dollars in total cost of ownership. Make the wrong choice, and you can wind up in the proverbial dust.
Here are seven critical factors to consider when deciding which solution is right for you:
- Implementation: If time is money, then implementing a Cloud-based solution will save you both. Simply put, you don’t need to invest as much time and resources to set up your hardware and software. In addition, a Cloud-based distributed order management solution uses flexible APIs that can be integrated in a matter of days, weeks or months into nearly any legacy eCommerce platform. A multi-tenant hosted solution will also require less resources to maintain, improving productivity levels across the board from the get-go.
- Total Cost of Ownership (TCO): Implementing an on-premise solution can easily run you six or seven digits in CAPEX. Once owned, there are no monthly recurring fees, but you will need to factor in the cost of IT staffing to maintain and improve your system. Moreover, your on-premise solution will typically have a five-year shelf life, at which point you will need to upgrade or consider a new solution altogether. As for the Cloud-based alternative, implementation will be a fraction of the cost, with moderate monthly recurring fees charged on a per-seat or per-transaction model, so the solution scales with your business growth. Support costs will be minimal, since the hosting company is likely to offer new products and services to stay competitive. For a huge enterprise business, the monthly recurring fees may seem daunting at first blush, but a long-term calculation will likely yield in favor of a Cloud-based solution, due to reduced implementation costs, staffing requirements and a projected five-year replacement expenditure.
- Ongoing product innovation: This is where a Cloud-based solution truly shines since you have access to a large team of specially trained engineers who continuously enhance the platform. A small IT staff in a company that is not primarily focused on your on-premise solution cannot compete in terms of innovation. If your company chooses a multi-tenant offering, all improvements will inure to the benefit of all customers. On the other hand, an on-premise solution gives you the freedom to customize a solution to meet your unique business needs. However, most businesses simply do not require that level of customization.
- Post-implementation support: When you select a Cloud-based solution, you can rely on the vendor’s IT team for ongoing support and maintenance. Since this is their area of expertise, they will be able to provide faster, more experienced help, ensuring that you can resolve any issues that arise. An on-premise solution will require a dedicated IT team to resolve ongoing issues. Bringing on new staff will also require significant training time since the solution is unique.
- Integration with other eCommerce solutions: Given that the on-premise solution has been highly customized for your business’ technology infrastructure, you should have the ability to integrate other eCommerce solutions during the implementation process. One important caveat is that your customized solution has not been designed to enable easy integration with other software and hardware solutions after initial implementation is complete. With a Cloud-based solution the lightweight APIs integrate seamlessly with nearly any legacy eCommerce platform.
- Data security: When you buy an on-premise solution, you have complete control over your system and data. While this by no means eliminates the risk of a breach, you can exercise stringent rules to ensure data safety. Understanding the importance of security in the digital age, Cloud-based solutions are becoming more adept at delivering comparable levels of security. Kibo, for example, is PCI level 1 Compliant, meaning that it has achieved the highest level of security for handling cardholder information for major debit, credit, prepaid, ATM and POS cards.
- Downtime: This has long been the Achilles’ heel of Cloud-based solutions. The fear, not to mention exorbitant costs and reputation damage associated with downtime, has been enough to keep many risk-averse businesses tethered to an on-premise solution. But risk and length of annual downtime have been steadily decreasing.
With the ability to implement industry-leading solutions more quickly and cost-effectively, even the fathers of on-premise computing have taken some of their offerings and solutions to the Cloud.
Now is the time to seriously consider or reconsider the Cloud for your business. Find out more about improving TCO with the Cloud in this eBook.