Most software solutions have an option for a cloud based offering, and certainly that is the case with ERP. But while there is a growing trend to move traditional on premise based ERP software towards a hosted set-up, make sure you do not confuse these with a true cloud based solution like Sage Intacct or Dynamics 365 Business Central.

Hosted ERP certainly offers cost savings over having the software on your servers. And you should be able to see some sort or ease when it comes to back-ups. But if you are looking at hosting as a true cloud solution, there are 4 things you should keep in mind.

Service Level Agreement

When software is hosted at a provider, they will be responsible for availability and up time. You must take a look at their Service Level Agreement, and find out how much uptime is guaranteed. Chances are they will not be as good as a true cloud solution, and that down time can have an effect on your business.

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How will you handle upgrades

Cloud based solutions have automatic upgrades, removing the worry and cost with who that will be accomplished. If your software is hosted on a server, who will perform the upgrade? What will the cost be? How will that affect productivity?

How secure are they?

How does your host authenticate users? Do they encrypt data that is transmitted? Depending on the nature of your business, you may have regulations around the level of security that must be provided

Who owns the data?

There is no other way to put it – Hosting means your data will be on someone else’s servers. And while that is also true with Cloud solutions, you do need to assess the overall stability of the group that has that data. What if they are bought by another group? What is there policy about downloading your data? What if you miss a payment, can you still get access?

In the end, you will probably find that a true cloud solution has significant advantages over hosted ERP.