How is Cloud-Based AP Technology Different than On-Premise Software?

It's not uncommon for organizations to fear moving to a cloud solution, just as there is a trepidation that moving to any newly emerging technology. Yet, moving departments like Accounts Payable to a cloud solution is an increasingly popular choice, not just for conglomerates, who may have their own cloud systems, but also for smaller mid-sized organizations that want to avoid a large upfront investment, yet reap the flexibility of a cloud-based model. Below, we have laid out the strategic advantages of moving from an on-premise software to the cloud based platform.

Cloud Based Systems:

• Cloud-based systems are more affordable; operating on a pay-as-you-go structure or a subscription based offer that provides flexibility and opens up the gateway for new technology and workforce management systems.
 
• Its low entry cost has led to the cloud’s widespread adoption, with 94% of organizations currently using cloud-based systems to run some aspect of their business today.
 
• The cloud also offers scalability for expansion or contraction, depending on your business needs.
 
• Cloud computing can reduce costs because it reduces the need for company-based IT maintenance and staff. Instead, data security is monitored and maintained by the SaaS provider - which brings the added perk of minimal or no downtime for upgrades and changes.
 
• With a cloud-based system, IT teams can appreciate having one less task on their to-do list because SaaS cloud systems are also monitored 24/7 by IT specialists in compliance with strict customer protection regulations.
 
• If mobile or remote accessibility is desired, a cloud platform is better to use than on-premise.  Just be sure to have assigned workflow approvals and separation of duties to protect sensitive data.
 
• Organizations with fewer IT resources can function well with a cloud system’s out-of-the-box capabilities. Implementation time is drastically shorter. There is also greater stability and continuous simplified updates from vendors as a result of less customization.

On-Premise Software:

• Setting up on-premise servers, firewalls, and storage requires substantial up-front costs. This investment can be perceived as risky, as the costly expenses of hardware, network architecture, and software licenses can recur every few years.
 
• Your company's IT department or contracted resources are highly involved in the implementation and maintenance of on-premise systems. 
 
• Mobile accessibility can pose an issue for on-premise deployments. These often require a third-party client to communicate between a mobile device and the on-premise software.
 
• On-premise hosting may require more hands-on involvement from IT which can delay implementation times. This can be complex when it's time to run software updates.

If more clarity is needed on the cloud versus premises hosting, consider a hybrid model. Many organizations today rely on a combination of both cloud and on-premise systems. A hybrid option can be helpful for small to midsize organizations who are lacking resources, and don't have the infrastructure to support a full on-premise hosting. They can benefit from the cloud with certain business functions.

Some businesses still rely on on-premise software when their CIO’s and CTO’s feel it is best. They value the fact that it’s set up at their headquarters or data center and they can control it.

Assess what fits your risk tolerance and department needs.  Cloud-based payments or on-premise?  

Depending on your unique business needs, you may elect to incorporate cloud-based systems or on-premise software. Cloud based platforms are more accessible, have lower upfront costs and provide automatic updates, with increased stability and remote availability. On-premise systems offer the advantages of customization and control, but require large commitments from your IT department, substantial up front costs and may not be accessible on mobile devices.

If you would like to learn more about cloud accounts payable automation systems from Medius, click here.  

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