Why should I choose cloud software over on-premise?

Perhaps sales or finance teams are already using platforms like Salesforce, and the decision to move HR into the cloud is a natural one.

However, if this is not the case, here are some of the reasons HR leaders, their IT teams and the c-suite, should be thinking about implementing cloud software. 

First, for the sake of clarity, definitions:

• Cloud software is so called because it’s typically hosted on the vendor’s servers and accessed remotely via a web browser
• On-premise is installed locally on the buyer’s own computers and servers

Price

• Cloud software is usually charged as subscription or license, either monthly or annually
• On-premise users will usually pay a one-time fee for purchase and implementation

While there are many exceptions to this, it’s a useful rule of thumb for the purposes of this article. It means the upfront cost of on-premise software is usually much higher. While there’s debate on which approach comes out top in the total cost of ownership stakes, the low cost of entry is a key benefit for the cloud, and one of the key drivers of its huge adoption over the last decade. 

Security 

Given the critical nature of the data and processes on an organisation’s important software systems, early concerns around cloud security were understandable. However, whatever skepticism there was has largely abated. Platforms like Salesforce (which our HR & Payroll application XCD is built on) have world-leading security measures that represent billion of dollars of investment.

When it comes to on-premise security, the responsibility rests with the purchasing company and their IT team. If your organisation is well resourced and confident in its ability to ward off cyber threats, this is less of an issue. 

Accessibility 

An area where cloud is a clear winner is mobile accessibility, where systems can be accessed at any time, from anywhere. Many platforms, like Salesforce, have dedicated mobile apps that allow fast, secure access on the go.

This level of accessibility can often prove troublesome for on-premise systems, often requiring third-party integration to enable communication between the software and a mobile device. It isn’t an insurmountable problem, but it definitely adds another layer of complexity. 

Future proofing

Buying software on a platform like Salesforce means you’re also bought in to the millions of dollars of research and development being poured into the product road map. Updates and releases are available to users automatically, without the need for extensive recoding and retraining.  

It’s not uncommon for us to work with organisations who have used the same on-premise HR system for ten, even fifteen years. Technology moves quickly. So 15 years’ worth of catching up can be painful when it comes to updating processes and user training. 

Cloud is the hands down winner here. If you’re interested in keeping up with the latest competitive technology trends, on-premise is an expensive way to do it. 

Want to learn more about cloud computing, Salesforce explains.