10 Questions to Ask Before Deciding on Cloud or On-Premises Software

By May 21, 2019Nonprofit

The cloud – haven’t we heard enough about cloud-based accounting software? Since the first appearance of cloud software, it seems as if every company, every business, every advertisement urges nonprofits to move their business software to the cloud.

Sure, the benefits are there. But does every nonprofit really need to switch their accounting software to the cloud?

Nonprofit Accounting Software: Cloud or On-Premises?

Perhaps you’re dedicated to on-premises software. Cloud software scares you. What if the system goes down or you can’t access the internet? Perhaps it’s less expensive or a donor is willing to give you brand-new on-premises software, no strings attached. Should you accept it or hold out for the cloud?

To make your decision, we’ve put together these 10 questions. The answers will help you choose between cloud-based solutions and on-premises software.

  1. Do you really need to replace your existing software? Often nonprofits think they should have the latest and greatest software to stay competitive, but if your current on-premises package suits your needs, there’s no reason to rush into a cloud solution.
  2. How fast and reliable is your internet service? Cloud solutions depend on fast, steady internet service, which is great if your office is in a major city and has access to high speed internet. If you’re located in a rural or remote area and rely on satellite or dial up, you may find that cloud software is frustratingly slow or unreliable.
  3. What does the new software package recommend? Look for the requirements for the new ERP system under consideration and compare it to your current hardware. Do you have enough power to run it on-premises?
  4. Do you have telecommuting workers or different office locations that need access to the same software? On-premises software must be used solely at one location while cloud-based software may be used anywhere employees have internet access. You may be fine with on-premises software if everyone works from one location.
  5. How much secure data do you store? All data should be kept safe, but some data, such as social security numbers, credit card information and other sensitive data can be compromised. Are you prepared to provide security for this data when you use on-premises software? Cloud-service providers typically add layers of security and update it frequently.
  6. Do you use separate systems for financial and accounting needs, online sales, warehouse needs, donor and grant management, etc.? If you use different software packages, do you find it annoying or a hindrance that they cannot communicate with each other? If you would prefer one package and software that sends data easily among the different functional areas such as finance, accounting, operations, and marketing, then a cloud-based ERP might be the right answer. If, on the other hand, you are doing just fine with only accounting software and see no need to move just yet from spreadsheets to computerized tracking of grant data (to name just one area), then on-premises might be just fine.
  7. How easy is it to customize the system? Some organizations prefer to customize dashboards based on roles, functions, or user preferences. Out of the box on-premises software rarely affords this type of customization, but cloud-based ERP does.
  8. Does your system do what you need to do – or are you always looking for a patch, a fix, or some way to rig it to do what you want? If it feels like you’re patching together your current system with scotch tape and bubble gum, chances are good that it’s time for a cloud system or at minimal, an upgrade to the on-premises package. What you have now no longer serves your needs.
  9. Do you find yourself scrambling for critical data for a grant application or other time-sensitive needs and can never find the information you seek? Nothing is more frustrating than needing important information in a hurry and being unable to find it. On-premises systems may not be updated until each office, unit, or person updates their information, and then it takes time to update the main database. Cloud systems, on the other hand, update almost simultaneously so that if someone adds a donor record in one part of the system, it appears in another. You have instant, up to the minute information.
  10. Is migrating to the cloud worth the cost? In the end, the opportunities or problems solved must be worth the cost of cloud-based software. You’ll need to sit with your team and add up the pros and cons of moving from your current package to cloud ERP.

Migrating to the cloud or moving to a cloud ERP system should be a thoughtful and considered decision. With the right questions, and your team’s input, you’ll be able to decide what is best for your organization.

Welter Consulting

Welter Consulting bridges people and technology together for practical solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.