Choosing between SaaS (cloud-based) and on-premise ERP is one of the biggest decisions a building material distributor can make. Each model has its strengths and drawbacks, and the right choice depends on your business needs, resources, and future plans. Here are the top 10 things you should know to help you weigh the pros and cons of each:
- Deployment Speed
SaaS ERP can be up and running quickly since there’s no hardware to install or complex setup.
On-premise ERP often involves a longer rollout with more technical involvement and planning.
- Upfront Costs
SaaS ERP generally has lower upfront costs. You pay a subscription fee, avoiding heavy initial investments.
On-premise ERP usually requires a significant upfront purchase of software and infrastructure.
- Ongoing Maintenance
SaaS ERP is maintained by the vendor, including updates, patches, and backups.
On-premise ERP requires your internal team or IT partner to handle maintenance, which can increase costs and complexity.
- Data Accessibility
SaaS ERP gives your team access from anywhere—ideal for field sales reps or remote teams.
On-premise ERP typically limits access to within your network unless you invest in remote access tools.
- Customization Flexibility
On-premise ERP often allows deeper customizations since you control the environment.
SaaS ERP can be more limited in this area, although many platforms now offer flexible configuration options without needing full custom development.
- Scalability
SaaS ERP scales easily with your growth—you can add users or features without rethinking your infrastructure.
On-premise ERP may require hardware upgrades and IT changes as your business grows.
- Security and Compliance
SaaS ERP vendors invest heavily in cybersecurity and compliance certifications.
On-premise ERP gives you more direct control over security but also makes you responsible for it.
- Internet Dependence
SaaS ERP relies on a stable internet connection. No connection means no access.
On-premise ERP can continue running locally even during internet outages—useful in areas with unreliable connectivity.
- Vendor Lock-In
SaaS ERP can sometimes limit your ability to switch vendors or move your data easily.
On-premise ERP offers more control, though switching systems is still a big undertaking in either model.
- Long-Term Costs
SaaS ERP may seem cheaper at first, but subscription costs add up over time.
On-premise ERP requires more upfront investment but can pay off long-term, especially if you keep the system running for many years.
Final Thoughts
There’s no one-size-fits-all answer. If you want flexibility, fast deployment, and minimal IT hassle, SaaS ERP might be the way to go. If you need full control, heavy customization, or operate in a location with spotty internet, on-premise ERP could be a better fit.
The key is aligning your choice with your business model, budget, and long-term strategy. And no matter which path you choose, make sure the ERP system is purpose-built for the building materials industry—because that’s where the real value kicks in.
