You’ve finally decided to digitalize your knitting garment manufacturing. Out of all digital tools, you chose an ERP solution for your knitwear factory. Great Decision! But now, you’re faced with another question: ‘On-premises ERP or Cloud-based ERP?’. To finalize which one actually suits your business, you must understand both types of ERP Systems. 

In this blog, we will look into the details of on-premises and cloud-based ERP, along with the differences between them. 

What is On-premises ERP? 

On-premises ERP is a business management software that runs on a company’s own servers and computers. The key feature of on-premises ERP is that it can be hosted locally on your company’s own infrastructure. On-premises ERP may not be trendy, but it remains a robust option for businesses with security and compliance needs. 

What is Cloud-based ERP? 

Cloud-based ERP is a type of business management software that operates on remote servers and is accessed via the internet. The key feature of cloud ERP is that it is hosted by a third-party provider, removing the need for in-house servers. It offers easy access from anywhere, automatic updates, and scalability as your business grows. 

Differences between on-premises and cloud-based ERP  

Let’s explore the major differences these two types of ERP hold. 

1. Cost Considerations 

Setting up an on-site ERP starts with investing in hardware like servers and storage systems to run the software smoothly. Alongside this, there are licensing costs for both the ERP software itself and the operating system (OS) needed to support it. Installing a strong firewall becomes essential to protect the entire system from cyber threats. Also, regular updates and security patches must also be managed to keep everything secure and running without issues. An in-house IT team manages daily operations, maintenance, and system improvements efficiently. While upfront costs remain high, owning the entire setup ensures better control and reliable performance in the long run. 

Cloud ERP reduces upfront costs by eliminating the need for servers and heavy infrastructure. Instead, ongoing subscription fees are charged based on users, data, or usage. These fees include licenses, maintenance, updates, and support, helping make budgeting more predictable. However, because payments continue as long as the system is in use, costs can accumulate over time. Additionally, internet connectivity and integration expenses add to the overall cost. While the initial investment remains low, it’s important to carefully consider long-term expenses.  

2. Flexibility and Access 

On-premises ERP keeps everything safely within the company’s walls by using a private intranet. This internal network ensures sensitive data stays under full control, away from outside threats. When remote access is needed, a VPN securely extends this network, letting authorized users connect from anywhere without compromising safety. It’s not about unlimited mobility but about smart, secure flexibility that matches strict security needs.  

Cloud-based ERP systems operate on established platforms such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), Oracle Cloud Infrastructure (OCI), etc. These providers offer robust security measures, automated backups, and consistent performance. This setup allows easy access from any location, making it ideal for organizations with remote or distributed teams. Infrastructure maintenance and updates are handled by the cloud service provider, reducing the burden on internal IT resources. However, reliable internet connectivity is essential to ensure uninterrupted operation. 

3. Performance and Scalability  

The performance of an on-premises ERP depends on a company’s own infrastructure. While it provides reliable performance if hardware is maintained well, scaling up requires further investment in servers and IT configurations. 

Cloud-based ERP is designed for easy scalability. The cloud service providers (CSPs) adjust resources based on business needs, supporting growth without the need for extra hardware. However, performance is reliant on the provider’s server capacity and overall internet quality. 

4. Security and Compliance 

On-premises ERP offers full control over data security, backups, and compliance protocols. It is often preferred by industries with strict regulatory requirements. However, managing in-house servers increases the maintenance workload and risk of failures. 

Cloud-based ERP security is managed by the vendor, who implements encryption, backups, and compliance measures within the software. Meanwhile, the cloud provider ensures the security and compliance of the underlying infrastructure. This division reduces internal security management efforts. Nevertheless, businesses must trust both the vendor’s and provider’s security standards and policies. 

5. Technical Support 

For on-premises ERP, technical support is managed internally by the company’s IT team. This team handles troubleshooting, updates, and maintenance, providing full control over system management and response times. 

In cloud-based ERP, technical support is provided by the ERP vendor. The vendor is responsible for system updates, performance monitoring, and resolving issues. While this reduces the internal IT workload, it can limit direct control over the timing and methods of support since the vendor manages these tasks remotely. 

6. Deployment Speed and Maintenance  

On-premises ERP’s deployment usually takes longer due to hardware and software setup. It often spans several months. A company can gain full control over installation and customization. However, maintenance and updates require dedicated internal IT resources. 

Deployment of cloud-based ERP is generally faster, often completed within a few weeks. There is no need for physical servers. Maintenance and updates are handled by the vendor which, reduces IT workload but creates reliance on external support. 

The verdict?

If you have multiple office locations and complex operations that require real-time data sharing and seamless collaboration across teams, a cloud-based ERP is the ideal solution for you.  

However, if your factories or offices are in remote areas where internet connectivity is limited or unreliable, and you need to secure your data independently using strong internal IT systems, then an on-site ERP would be a better fit for your needs. 

Which ERP Deployment is Useful for Knitwear Manufacturers? 

Both cloud-based and on-premises ERP solutions can aid in identifying hidden costs of inefficiencies in knitwear industry.  

You can opt for cloud-based deployment if you want flexibility, remote access, and subscription-based payments. Despite several advantages of cloud ERP, on-premises ERP is often the preferred choice in this sector. Why? Because you can enjoy the following benefits: 

• Many knitwear factories are located in rural areas where internet connectivity is limited or unreliable. For such locations, an on-site ERP system is ideal because it does not require stable internet access to function. 

• Investing in on-site ERP involves setting up your own hardware, which is a one-time cost that helps avoid ongoing high subscription fees. It also allows better control over expenses while meeting specific business needs. 

• All knitwear production and design data must be kept securely to ensure safety. On-site ERP provides greater security and full control, protecting your unique manufacturing process from external risks. 

Why is KnitOne the Best ERP Solution for Knitwear manufacturing companies? 

Most ERPs on the market are generic and primarily focused on financial management, often overlooking critical operational needs. As a result, they require extensive customization to address the unique challenges of knitwear businesses, driving both costs and complexity. 

Most importantly, the knitwear industry demands specialized features, such as precise yarn inventory management, to effectively handle its intricate operations. That’s why a purpose-built ERP solution like KnitOne for knitwear manufacturers is essential for streamlining processes and improving overall efficiency. 

KnitOne is developed by Astra Softech after years of research into how knitwear manufacturing really works. This ERP software can be deployed both in cloud and on-premises. 

While researching and developing KnitOne, the team discovered that manufacturers favored on-site deployment over cloud options. With on-site deployment of KnitOne, you can receive the following support and maintenance services: 

• Dedicated onsite deployment team for 1 to 4 weeks, guiding you through every step.  

• Hands-on training for all user roles, from merchandisers to production managers.  

• A response time of one hour for critical issues to ensure uninterrupted operations. 

• Regular check-ins during deployment to enhance team adoption and efficiency. 

Final Thoughts 

Once you have chosen an ERP system as your digital transformation tool, it is time to decide between on-premises and cloud-based ERP solutions.  

If your factory has multiple production sites with international teams, cloud ERP might offer better connectivity. However, if you prioritize machinery integration and offline operations, on-premises is ideal.   

KnitOne is a tailored ERP for knitwear manufacturers that offers industry-specific features to ensure seamless integration, secure data management, and improved operational efficiency.

Why wait? Take the First Step to Boost Profits with KnitOne’s Complete Operational Visibility.