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Cloud Versus On-Premise: Which Solution Is Best For Credit Lifecycle Software?

June 12, 2018 at 7:58 AM

If you're tasked with selecting a credit lifecycle software for your business, one of the most significant decisions facing you is whether to go with cloud-based or on-premise software. It's a question we get asked often, but the answer is often more complicated than an outright recommendation of one or the other. Each solution has pros, but also cons and therefore you’ll need to compare the two in-depth and select the option that suits your business strategy, and more importantly, your IT strategy.

In this blog, we’ll help you weigh up your options by taking a look at the pros and cons of both on-premise and cloud credit lifecycle software solutions, and provide you with considerations you need to take into account during your evaluation process.

On-Premise Credit Lifecycle Software: The advantages & disadvantages

The first priority you’ll consider is that sensitive data needs to be kept secure. On-premise credit lifecycle software means your data doesn’t leave your servers which makes it easier to comply with regulations, as it gives you more control and security over the data, and the infrastructure on which it’s stored. On-premise should be considered if your IT executives feel more comfortable taking on the security responsibility themselves, rather than handing over the reins to a provider.

Often this decision comes down to cost. You’ll need to consider that for on-premise software, your infrastructure costs will be higher, and depending on your software solution, there is a possibility of the software costs being higher too. Remember to consider total cost to own, so factor in the support and staff you’ll need to set up and maintain the infrastructure. If any specialised skills are required to maintain either the infrastructure or the software, this will likely lead to increased costs.

Be sure to determine who will be responsible for the software maintenance and upgrades, as this differs between providers when it comes to on-premise software. Ideally you’d want the software vendor to take care of that, but be aware that this will likely come at a monthly price. A big benefit of having the software hosted on-premise is that you have more control over these software updates and when they occur and so are able to minimise operational impacts.

The benefits and drawbacks of a cloud solution

With a cloud solution, there may be no added infrastructure need, thus you’ll also reduce costs by removing the potential need for infrastructure setup, support and maintenance. Another advantage of a cloud-hosted software is that the software provider is always responsible for maintenance and upgrades of software.

You do, however, have to consider that some (if not all) of your customer data will likely have to move off-site, a thought which makes most IT executives uncomfortable, despite cloud environments like AWS and Azure being very secure.

When it comes to considering the total cost to own, you’ll need to factor in potential hosting fees, but find out whether they aren’t included in your software subscription. If they aren’t, be sure to monitor the cloud infrastructure closely, as it can easily become costly if resources, services and data aren’t used optimally.

You’ll also likely need to manage your bandwidth. Credit lifecycle software is an essential business function and having a slow internet connection due to bandwidth issues, will impact your business operations. If you’re operating a company with remote offices or stores in various countries, you’ll not only need to consider bandwidth at all of these locations, but also net neutrality of those countries. Private WAN connections to access software might be a more reliable alternative, in this case. Also take into consideration any potential cloud downtime, and how it would influence operational SLA needs, as well as what your fault resolution strategy and business continuity plans in the event of downtime.

Which solution is better?

The solution you choose will depend on your business and what your priorities are. Likely, when it comes to credit lifecycle software, security will be your key concern. Accessibility will be a close second, as the lack of access to such a key business function could have serious repercussions. If these are indeed your top priorities, an on-premise solution would be more equipped to meet your needs, despite likely having higher costs. If cost is your primary concern, be sure to take total cost of ownership into consideration and evaluate several vendors who offer each solution – not just one cloud solution vendor and one on-premise solution vendor, as you might not be getting an accurate representation of the two solutions, but rather functionality of software.

Whether you decide to invest in an on-premise or cloud credit lifecycle software, there’s still more to evaluate. Download our guide to evaluating credit lifecycle software for a complete list on key elements and functions to be taken into consideration.

how to select a credit lifecycle software

Jean du Plessis
Jean du Plessis
As Program Manager for Product Development at Principa, Jean is responsible for the overall management of product development initiatives and implementations. A certified scrum master, with a B.Com(Hons) in Business Economics and more than 18 years experience in software and product development, Jean's combination of skills and unique insights drive innovation of our products and success for our clients.

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