Enterprise software has gone through quite an evolution throughout its lifetime; the ERP solutions of today hardly seem to be of the same lineage as traditional versions.
Since their inception, ERP solutions have been traditionally hosted in-house. Businesses spend quite a bit of their budgets building an IT infrastructure and purchasing the equipment upfront to run the business management system as a whole.
On-premise ERP software is both a thing of the past and a thing of the present: Its technology is outdated, but it's still in use by many small and mid-sized businesses today. Let's investigate the components and typical structure of a traditional ERP system:
Hardware is one of the biggest costs plaguing setup of on-premise ERP software. You need to purchase expensive hardware and equipment – all of which is difficult and costly to maintain.
As servers and hardware age, they break or become obsolete. In order to keep your business running, you're on the hook for immediate repair costs – otherwise, you run the risk of indefinite downtime and inevitable productivity lapses.
Break/fix is a familiar model for IT, but it's also painfully unsustainable. Temporary repairs are just that – temporary. You know the problem will rear its ugly head again, sooner or later, and that you'll need to do the same emergency scramble when it does. Break/fix is rarely cost-effective and never the best solution.