On-Premises vs Cloud Software

What Works Best in Construction?

At Accordant Company, we specialize in software and technology for the construction industry. Today, construction firms are increasingly asking about cloud construction software and whether it is better than the traditional on-premises software they have been using, especially with so many people working remotely. Below is a helpful comparison which outlines the key differences between legacy on-premises software and newer native cloud software.

Deficiencies of Legacy Financial Software

Many of today’s financial management and accounting software applications date back to the late-1980s and originate from the transition to Microsoft Windows, pre-dating the advent of the Internet. They were not designed for the “always-on”, inherently mobile business environment we live in today.

One big challenge with these legacy systems is the underlying technology as it does not allow the user to easily configure the system to meet unique business needs. Companies often end up paying for costly permanent customizations and find themselves held back by vendor lock-in. This lack of flexibility also makes it difficult to generate needed reports with the right information at the right time.

Usage of older systems can contribute to excessive overhead, functional limitations, and unnecessary security risks. Moreover, business costs associated with the inability to gain real-time visibility into organization’s financial and operational key performance indicators (“KPIs”) can be onerous. Meanwhile, competitors might be making faster, better decisions.

Choosing a Delivery Model: On-Premises vs. Hosted vs. Cloud

The following is a high-level overview of the software delivery models available today:

On-Premises

In the traditional on-premises model, companies run software on owned servers and other IT infrastructure.  In addition to software costs, businesses need to account for capital and operating expenses associated with deployment, operations, support, customization, integration, maintenance, and upgrades. While these costs can be too large for small- and mid-size organizations to sustain, on-premises remains a viable option for certain larger companies with existing IT infrastructure and in-house experts (or outside consultants) to support it.

Hosted

In a hosted environment, the software physically resides at a remote data center operated by an expert third-party hosting provider and the software is accessed over the internet. This model eliminates the responsibility of maintaining hardware infrastructure and thus limits upfront capital expenditures but entails similar ongoing expenses for customizations, upgrades, integration, support, and service.

Cloud

Cloud-based financial applications were built for the Internet age. Software-as-a-Service (“SaaS”) applications offer direct, “always-on” access to software and are typically delivered via monthly or annual subscriptions. SaaS software is multi-tenant which means subscribing companies leverage shared system resources (servers, database, etc.), but can only access their data. There are no upfront fees, capital investments, or long-term commitments because users do not buy, license, or manage the underlying hardware, software, or networking infrastructure.  Upgrades are performed by the provider at no additional cost to the subscriber.

See Also: SaaS vs Cloud Computing (Which is Better for Construction?)

Comparison Guide At-a-Glance

The following is a handy grid comparing the benefits and features of the 3 deployment methods: On-premises, Hosted, and Cloud.

Key Benefits of Cloud Software

Demand for cloud-based financial software applications continues to grow as more businesses recognize the speed, accessibility, and other distinct advantages of cloud software like Sage Intacct Construction. Here are some of the key benefits of cloud software versus traditional on-premises legacy applications:

Built-in Remote Access

For companies with teams working in the field, on the jobsite, or just away from the office, the “anywhere, anytime” accessibility of cloud software is a key benefit. Using any device (mobile, laptop, etc.) with a web browser and standard internet connection, users can log right into the software without all the complications of setting up “remote access” to legacy software.

Low Upfront Costs and Rapid ROI

Purchasing on-premises software and required hardware often entails meaningful upfront capital expenditures and ongoing operating expenses. Native cloud software has been shown to drive higher ROIs through time savings and improved process efficiency versus legacy on-premises systems. With more modern built-in capabilities, companies moving to native cloud software benefit from the elimination of manual data entry, paper-based processes, database management, and external spreadsheet maintenance.

Easy Integration

Native cloud software solutions typically connect seamlessly with external third-party platforms, allowing companies to use the best applications for each functional area of the business. This translates into the reduction of costly custom programming and the elimination of expensive IT maintenance spend.

Real-time Data and Collaboration

Real-time data visibility is a hallmark of today’s cloud systems. Many firms adopting cloud financials provide real-time dashboards to management team members to monitor relevant KPIs. Similarly, access to a broader range of employees is provided for viewing dashboards, entering and approving expenses, and creating purchase orders. Some firms even give 3rd party access to lenders, auditors, CPAs, board members, and others.

Better Efficiency

Native cloud software can help users achieve better company-wide operational efficiency and streamline classic finance processes like consolidations and closes. Organizations can leverage cloud software to better manage disparate company processes and coordinate with customers and suppliers. This enables companies to sidestep the pitfalls of “management by spreadsheet” and avoid the limitations of single-user systems like QuickBooks which trap information in desktop silos.

Big Business Technology Without the Big Price Tag

With native cloud software, you get access to software capabilities and technology that was previously only available to big companies with big IT budgets. With today’s cloud solutions, software publishers amortize costs over thousands of customers, allowing them to maintain world-class infrastructure with 24×365 monitoring operations, continuous backups, disaster recovery, and superior security. This offers better performance, reliability, and security than most small businesses can afford on their own.

Is It Time to Move YOUR Business to the Cloud?

If you are new to the cloud, you probably have questions. At Accordant Company, we have the answers. If you are considering whether it is time to move YOUR business to the cloud to gain efficiencies and competitive advantages, click the link below to get in touch with us. One of our cloud construction software experts will follow-up to answer your questions, schedule a demo, or provide educational materials to determine whether native cloud software is right for your business.