What is On-Premise HR software?
On-Premise HR Software is classified as the human resource management system that is installed and hosted locally on the organization’s servers and infrastructure, rather than being accessed through the cloud. Its key characteristics involves-
- Physically installed software
- Complete control over data and customizations
- Internal IT support throughout
What is cloud-based HR software?
Cloud-based HR software is also a human resource management system that operates online, it is hosted on remote servers and can be accessed through a web browser or mobile application. It does not require a physical installation on local machines rather it can be utilized from anywhere with an internet connection. Its key features include-
- Easy remote accessibility
- Real-time updates and data sync
- Easy adaptable and scalable
- Automatic updates and extreme data security
What’s the Difference Between Cloud-Based HRMS and On-Premise HRMS?
Between both major HR software options, organizations might always be struck in ambiguity. To achieve a clear and precise solution, it is imperative to have a fair comparison based on the features offered by each HR software. Listed below is a feature-to-feature compassion.
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Feature
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Cloud-Based HR Software
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On-Premise HR Software
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Deployment
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It is hosted on the vendor’s cloud servers and can be accessed through web or mobile
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It is installed locally on the company’s servers and deployed on local infrastructure
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Accessibility
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Has easy access as it can be utilized anytime, anywhere with a stable internet access
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Stays limited to the workplace network or within a VPN access
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Cost Model
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It's based on monthly or annual subscription
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Incurs one-time licence fee and involves periodic ongoing costs
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Maintenance
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Completely managed by the vendor, including automatic updates and customer support/helpdesk
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Managed internally by the organization’s IT team
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Scalability
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Conveniently scalable as organizations can purchase cloud space as they grow
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Scalability is complex as it required hardware upgrades and manual configuration
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Security
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Cloud-based HR software ensure security as it is managed by the vendor via encryption, backups and compliance protocols
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Security is controlled as it is in-house, mostly suitable for strict data governance
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Integration
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Easy and seamless integration possibilities with various cloud applications
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It might require custom development for third-party tools
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Implementation Time
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It's a quick setup option with minimum IT involvement
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It requires longer to setup as it involves IT team and better planning possibilities
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Ideal for
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Idea for startups, hybrid/remote teams and organizations having plans to scale
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Appropriate for large enterprises with in-house, dedicated IT teams and stringent compliance requirements
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How to Choose Between Cloud and On-Premise HRMS?
After having a clear view of key features comparison, listed below are some other factors which might influence your decision of choosing the right HRMS platform.
1. Budgeting
While talking in terms of Cloud HRMS, it requires lower upfront cost as it operates on subscription-based model being an ideal value proposition for the startups and scaling businesses.
Alternatively, in terms of On-Premise HRMS, it requires higher investment for building software and infrastructure. It runs on a recurring cost model which is best suited for large enterprises with specified budgets.
2. Scalability
Cloud HRMS is extremely scalable and adaptive, it grows with the organization and stay adaptive to frequent changes.
On the other hand, On-Premise HRMS needs hardware upgrades and continuous IT support to scale. It can be a time-consuming and pricey option.
3. Accessibility
Cloud HRMS is the most convenient option in terms of accessibility as users can access it from anywhere through a stable internet connection. It can be an excellent choice for remote or hybrid teams.
While, when we talk about On-Premise HRMS, it has limited accessibility to office network or VPN. Not an ideal option for remote or flexible working teams.
4. Resource Needs
A Cloud HRMS hardly involves IT resources which mean that the vendor can manage updates, backups and security. However, On-Premise HRMS requires internal IT team setup which involves maintenance and troubleshooting.
5. Implementation and Maintenance
Cloud HRMS involves quick and seamless deployment utilizing features like automatic updates and vendor support.
On the other hand, On-Premise HRMS includes longer setup time, manual updates and internal maintenance.
6. Employee Experience
A Cloud HRMS is user-friendly, easily accessible through mobile and regular in terms of feature upgrades.
Alternatively, On-Premise might offer deeper customization, however, it may lack modern UX and mobile support throughout the process.
Final Words
Making the right choice between a cloud-based HR software and an on-premise HR software can be a tough deal. It depends on multiple factors including organization’s size, budget, technical resources and long-term business goals.
In an ideal scenario a cloud-based HRMS is great for startups or the organizations willing to scale with time. However, on-premise HRMS is suitable for large enterprises which requires greater security and have an in-house setup to manage things at scale.
Confused enough and unable to make the right decision? HONO can help you find the best way out and implement what’s right for your organization.
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