Evaluating the Cloud: On-premise vs. Cloud, where is the Functionality?

About four years ago, my wife asked me if she could have my old laptop. She wanted it so she could go on the web, research, and email without being tethered to her desktop. I understood, but knew that my laptop was heavy, hot, and a has-been. While it would accomplish what she wanted, it also lacked a key attribute—the ability to fit in her purse and go with her. I looked at the then newly introduced iPad. It was light, portable, and met her requirements for web, research, and email. Problem solved, although she still used (and uses) her desktop PC for some tasks where a PC/Mac is better suited.

I’ll start with my conclusion on Cloud vs on-premise solutions. Which is the best, a Cloud solution or an on-premise solution? Well, it depends. A careful and extensive assessment/comparison needs to be conducted to determine the best course of action for your organization. The Sierra-Cedar HR Systems Survey White Paper shows the most widespread solutions. This can provide a quick start for looking at specific systems. What are some of the key areas to explore and consider? The grid below provides a starting point.

Cloudcloud-icon On-premisebuilding-icon
Functionality Breadth & depth, see last week’s blog for examples of high level functionality. New functionality and more robust functionality is added 2–3 times a year. New functions need to be configured, tested, trained, prior to use. Extremely broad and deep. These systems meet most requirements in most industries in global organizations. New functionality is added on a regular basis. New functions need to be configured, tested, trained, prior to use.
Frequent updates add improvements to support leading practices. Leading practice updates are built in. For organizations that are on a current release, updates include additions and changes to functionality to support leading practices.
Configuring Robust configuration options helps to reduce the need for customizations. Extensive configuration satisfies the requirements of many industries and organizations.
Many of these systems were created with analytics built in to them.   The dashboards and analytics are getting more extensive with every update. The most current releases have dashboards and analytics but not as extensive as systems built from the ground up with analytics.
Tailoring Most solutions support tailoring, such as changing field labels, storing new data. These changes are automatically moved during an update. Yes, tailoring is supported but could require examination and re-application during an update.
Customizing Not supported. This is both good and bad. Some organizations require a function or process that is not available in a delivered system. Nearly any requirement can be supported. Note the leading practice for modifications creates them in a way that minimizes the impact on an update.
Assistance Newer systems have limited resources with expertise and limited knowledge repositories. Outside and internal expertise is readily available, extensive knowledge repositories are available.
Updates come out two to three times a year. Only single tenancy provides flexibility on when updates are accepted by a client. Updates in multi tenancy environments have a short window to accept changes. Up to date on-premise supports your choice, frequent updates, cumulative updates, or take it as you want it updates. Note, many organizations that are on a current release have reduced modifications and simplifyied maintenance.
Cost to
Quick as most of the work is done (mapping to the new system). Remember that acceptance testing, training, change management and custom integrations are your responsibility when running an application in the Cloud. Updates can be fast/inexpensive for unmodified systems to longer/expensive when extensive modifications are made. Acceptance testing, training, change management and custom integrations are your responsibility under any scenario.

The points in this table highlight some things to consider during the decision making process. Overall, in comparing these two solutions, I’d say that Cloud systems have the edge with the analytics and on-premise systems may have deeper functionality and support customizations. However, the solution that’s right for your organization really does depend on your requirements.cloud-blog-cost

Before anyone says that customizations are bad, remember that most organizations require at least some level of customization or flexible configuration to support the unique business processes, and that these customizations improve process(es) in their environment. Leading practice for modifications is to verify that the benefits outweigh the costs and minimally affect an update.

Your take-away: just like the iPad didn’t meet all my wife’s requirements, it met enough of them that she “ran” a hybrid solution (both an iPad and a PC).[i] The number one point to consider when making a decision: does it meet your requirements? After (or alongside) that, I think cost enters the decision, i.e., if the system doesn’t meet your requirements, then cost isn’t important as it’s not a solution for you.  I’ll add that if you can’t afford what you need, then you need to carefully examine your requirements.

Next week, I’ll explore whether it is better to upgrade your on-premise system or move to SaaS. Are these blogs too short, just right, to the point and provide information that is of interest to you? Just shoot me a note at Cloud@Sierra-Cedar.com with your comments, questions (or disagreements).

[i] My wife has an iPad Air now with office tools that let her do more and more on her tablet, but some things are still easier on a PC. The hybrid model here is similar to any hybrid model, it can be a more expensive solution so examine your options and the tradeoffs.

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