Whether you are paying staff, managing customer accounts, or developing new products, business processes are the lifeblood of any organisation. Today, most companies manage their business processes with some kind of software. This technology is available either on-premises or in the cloud. Indeed, many software companies offer both options (for example, you can get versions of Microsoft’s project management software both on-premises and in the cloud).

So, what’s the difference between running business processes in the cloud and running them on-premises – and how should you choose between them?

Key definitions

Before comparing the cloud and on-premises for running business processes, it’s useful to have a working definition of the terms.

Until relatively recently, most corporate computing happened on-premises. The software and systems that employees used were installed on their physical desktops or servers in the basement of the building. Staff connected to their software and content over an internal network.

Over the past decade, however, cloud computing has garnered enormous popularity in the world of enterprise IT. Rather than managing and installing software on your own servers, you outsource computing power and software and it is accessed online. Company files and software are held in third-party data centres where they can be viewed and used by anyone with an internet connection and login credentials.

So how does this affect the way companies manage their business processes?

5 differences between cloud and on-prem for business processes

Pick any business process you like, and it is usually perfectly possible to do it with a software programme installed on-premises or in the cloud. You can perform all the steps involved in the workflow using either approach and get the same outcome. So, what’s the difference?


5 differences between cloud and on-premises

  1. Customisability

Most on-premises software provides the option to customise the backend code and functioning of the programme. Once your company has bought licences for the product, you can normally tinker with its features, so it integrates more easily with your other software and workflows.

By contrast, cloud-based technology doesn’t let you do anywhere near as much customisation. This is because the technology is maintained and deployed centrally by the software provider to all their customers. They therefore cannot give anyone access to the backend code, since changing it would disrupt everyone’s experience of using the technology.


  1. Installation process

If you are using on-premises software, you must install it yourself onto your company servers or desktop computers. You then won’t get any updates or patches until you buy the next version of the programme. By comparison, cloud-based business process software can simply be ‘turned on’ at the click of a button. What is more, the provider will roll out updates and patches as and when they are ready, which means you always have the latest version of the tech.


  1. Cost and payment methods

In most cases, choosing on-premises software requires you to make a single upfront payment for the licences when you purchase them. By comparison, cloud-based business process software allows you to use a subscription model where you pay for usage and can start and stop anytime you want. That shifts software from a big Capex cost to a more manageable Opex.


  1. Location where work gets done

With on-premises software, you can only carry out your business processes whilst physically using the machine where the programme is installed. On the other hand, with cloud software, you can continue running your business processes from anywhere with an internet connection.

In a world where a mix of remote and in-office working is expected to become the norm, this is a significant advantage of running business processes in the cloud.


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  1. Security, control and compliance

With on-premises business processes, all of your content is stored physically within your company’s building and back-office servers. For regulatory purposes, finance, legal and public sector organisations may be required to keep this information under their complete control, meaning on-premises processes are the only option.


However, for many companies the cloud might be preferable. Cloud providers like Microsoft Azure or Amazon Web Services usually have much more advanced security measures in place than any normal organisation could hope to implement.


Where should you run your business processes?

Each organisation is different, and the reasons for moving business processes to the cloud or keeping them on-premises will vary according to your own context and needs. Some organisations might be legally required to keep certain workflows – such as those treating customer data -permanently on-premises. In many cases however, the cloud could be a good option, providing a lower cost way of running business processes, greater flexibility and support for hybrid working.

FITTS can advise you on the best cloud or on-premises approach (or a combination of the two) for running your company’s processes securely, reliably and efficiently. Contact us today for a free, no-obligation business process consultation.