In the ever-changing fast-paced world of digitization, choosing the best fit when it comes to the type of IT infrastructure of the company, may prove to be quite a challenge. With SaaS systems being the hot topic for discussion in recent years, let’s have a look at the pros and cons of both Saas and on-premise systems. Hopefully, we can help make the deciding process a smoother ride for you.
Starting from the Basics
Before we start comparing the two options, let’s first make sure we know the meaning behind each of the systems.
A Cloud Saas system (Software-as-a-Service) is a system that’s been made available by a third-party vendor and can be accessed online, via the Internet. The user has on-demand availability of the resources and can access the system from anywhere, granted they have access to the Internet. Both the program itself and related servers are managed and located remotely, not on the premises of the user’s business.
An On-Premise system, or local software is a system that is built specifically for a company and is managed and maintained by the company itself on its premises. This system is used only by the company itself and the data is stored locally. With the rising popularity in SaaS systems, there are still certain companies that prefer an on-premise solution, especially if those companies deal with highly sensitive information (e.g. banks, government facilities etc.).
Comparing Your Options
As per definition, the main difference between the two solutions is how and where they are located and maintained. Whilst on-premise systems are hosted and maintained internally by the company, a SaaS solution relies on a third-party provider when it comes to these processes. However, as with most things in life, there isn’t one clear-cut answer when it comes to which solution works best for your business. Different factors like the security requirements, the company’s budget and objectives come into play when deciding on the best fit.
Without further ado, let’s have a look into Automotive Saas vs On-Premise Software, both of their pros and cons to help make the decision easier for you.
Implementation Process & Accessibility
SaaS: One of the biggest pros when it comes to opting for a Dealership SaaS solution, is the speed and ease of the implementation process. As the solution is ready-to-use and already available online, there is no wait time when it comes to actually being able to use the system. Users can access it from anywhere, given they have access to the Internet.
Most dealerships are looking to implement changes fast to keep up with the fast-paced market and increasing customer expectations. What is more, it’s probably safe to say most dealerships would prefer to keep costs as low as possible when implementing new systems, without having to cut back on the quality of their operations.
On-Premise software: When it comes to on-premise solutions for dealerships, companies who decide to go that route have to be ready for a long and costly implementation process. Both the planning and the actual execution tend to be highly time-consuming. This can be blamed on the fact that with on-premise solutions, a company has to first obtain hardware in order to host a software solution in house. Although the business has more control over the system, accessing the data is much more difficult than with a SaaS solution. In order to have access, users have to be on company premises and access via specific devices to which access has been granted. On-premise systems cannot usually be accessed remotely without developing a costly VPN solution for the company so work-from-home options are usually out of the question in this case.
So, if your dealership is looking to stay flexible in both its day-to-day operations as well as offer remote work options for the staff, compared between Dealership Saas vs On-Premise Software, an on-premise option is not the best route to take.
Support & Maintenance
SaaS: The best news for dealerships that have decided to implement a SaaS solution is that they can wipe their hands clean from any upkeep when it comes to the maintenance and support of the software. The system provider is fully responsible for ensuring the availability of the system, upgrading it and recovering the system in case any issues arise. All the hassle related to maintaining the servers is off your shoulders.
Since the system is not designed and created by your company, you do rely on your SaaS provider for support. In most cases, however, SaaS companies will provide you with a dedicated support agent so your queries will be answered quickly.
As the system is owned by the provider, you don’t get a lot of say when it comes to the updates that are made to it. As the world moves in a direction where user experience is the first priority, lots of SaaS companies are involving software users into development discussions with examples where users can recommend or even order custom upgrades for the software.
Even if you can’t say your word into discussion this really isn’t much cause for concern however, as vendors usually carry the updates out outside of main working hours and give you a timely heads-up before any changes are implemented. For most dealerships, having a short system downtime in the middle of the night is most likely not much of an issue.
On-Premise software: In case of an on-premise solution, the company is fully responsible for all the upkeep the system requires. That means upgrading the system when needed, maintaining it and offering support for the customers as required. Although you have more control over when updates are being made and they are not forced on you by a third party, this also means that in case of any problems, ensuring a fast recovery is up to you. To be able to provide that, a highly skilled IT staff who’s available 24/7 is a must. This is definitely a high cost to be added to your dealership’s annual budget, however. On the upside – you’ll have more control over our data with an on-premise solution.
A Bang for Your Buck
SaaS: There’s no denying that one of the biggest upsides to Automotive SaaS solutions is their low cost when compared to alternative options. SaaS solutions for dealerships are generally subscription-based and as the user company is simply renting the software from the vendor, implementing a SaaS solution doesn’t require a large up-front investment from the dealership. The business usually pays either an annual or a monthly fee, based on the type of license, amount of seats with access and features provided to the user. Although maintaining a low cost for the solution can easily be achieved, it’s important to keep an eye on licenses that have been paid for, but are not being used as well as applications that have become redundant.
All in all, the costs for setting up the system for your dealership, including hardware and servers, as well as maintenance costs are taken care of by your service provider, whereas you only have to worry about paying the subscription fee and keeping your customers happy.
On-Premise software: Generally, on-premise solutions come with a hefty price tag. Dealerships opting for an on-premise solution, have to not only buy the necessary hardware, but also invest in the implementation and setup of it. At first glance the maintenance cost for the system may seem fairly low, but users have to take into consideration the investment that has to be made to acquire and manage a highly skilled in-house IT staff and infrastructure. As upgrades are required for the hardware on a continuous basis, these costs will also start to add up pretty fast.
Security Concerns
SaaS: Although some companies are worried about the safety aspect when it comes to a Automotive SaaS solution, there really is no reason to believe that cloud-based data storage is any riskier than on-premise storage. Nowadays, SaaS providers ensure that their clients’ data is protected to the highest level by applying top-notch technologies for security. After all, they do have their own reputation to care for as well. Not to mention well-known GDPR which doesn’t give any room for errors handling customers data. Quite common is even a solution where a SaaS provider stores all your customer data in your region to make sure that privacy laws are followed to the detail.
With a quality Automotive SaaS vendor, you can rest assured that your dealership’s and customer data is taken care of and that the security technologies applied are constantly being checked and upgraded, to remain a step ahead of hackers.
On-Premise software: To guarantee the highest level of security for your data whilst having an on-premise solution, a company should invest in a devoted IT staff that’s available 24/7, which is not the case for most dealerships, as it isn’t the most cost-effective approach. The team needs to constantly upgrade security measures to ensure the data that’s stored locally doesn’t fall victim to hackers. If an IT team who can guarantee this level of dedication is not there, having a third-party provider responsible for your data security is undeniably a better option.
Fact is, ensuring data security on-premises is definitely much more costly, time-consuming and risky than having an outside provider be responsible for that.
Customization & Scalability
SaaS: A great benefit of a SaaS solution for Dealership is its easy and fast scalability. As time goes by, the needs of your dealership are bound to change and evolve and you may need to adjust your solutions accordingly. A third-party provider will give you the option to upscale your dealership’s account and add additional seats, more servers, extra storage space, features etc. Should your business need a decrease, you can easily downgrade your account with the Dealership SaaS vendor.
Considering the change the automotive sector has been forced to make in the last 2 years with all the restrictions and limitations, automotive companies who have been using SaaS solutions have been able to customize needed processes and implement new ones much faster. Keeping up with the evolving customer expectations, whilst offering them the best experience is something that is definitely more easily achieved with automotive SaaS solutions rather than with an On-Premise software.
On-Premise software: Considering the complexity and cost of the initial implementation process of an on-premise solution, it’s clear that the system is not as flexible when it comes to scaling it as a automotive SaaS solution. Any upgrades or downgrades needed for the dealership require a lot of planning, time and investments. On the upside, since it is your system, you can customize it based solely on your particular business needs and taking into consideration the processes specific to your line of work and customers. However, if due to the nature of your business it is important to implement changes fast and stay flexible, which is usually the case for dealerships, having an on-premise solution may not be the best fit for you.
Ready to Recover
SaaS: When your company stores its data in a cloud with an outside provider, in most cases the data gets backed up automatically. SaaS vendors also have a detailed tracking system to keep an eye on all updates and backups. Thanks to this, recovering data after a tech-disaster is usually fast and easy and neither you nor your team have to worry about it. You just have to make sure that your subscription includes both backup and recovery services. This is an absolute must!
On-Premise software: Installing and maintaining high-quality recovery systems for your on-premise solutions comes at a very high cost. You have to be ready to invest in a duplicate data storage solution which you’ll have access to in case the central processors are down. Unfortunately there is no better way to ensure that your data can be recovered after any technological incidents and that’s a risk no company should take. Remember, with an on-premise solution, your company is solely responsible for the backup and recovery of the data that’s been gathered and stored.
To Sum Up
It’s clear there are both pros and cons to both of the systems and there really is no one-size-fits-all solution. When choosing between automotive SaaS vs On-Premise software for your dealership, you have to consider both the short and long-term.
If you are looking to make your company and team as time- and cost-efficient as possible, whilst having enough energy and resources to focus on the day-to-day tasks, opting for a Automotive SaaS solution would be your best bet.
Not only are both the implementation and ongoing costs significantly lower than with an on-premise system, you can rely on your vendor to take care of the necessary upgrades and in case of any technological problems, they are responsible for ensuring your data can be recovered easily.
With a high-quality SaaS system for dealerships, you can be sure your data is secure and you’ll have easy access to it, in order to analyze and make informed decisions to increase the profitability of our business.
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