Which software solution is best? The differences between in-house, on-premise, and SaaS.

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Which software solution is best? The differences between in-house, on-premise, and SaaS.

There are many factors to consider when choosing a software solution, and while you might have a specific problem to solve, or want to increase efficiency in your business, you may not have thought about how software is delivered, and which option is the best fit.

In-house software solutions are developed and maintained from within your organisation by your own employees, or by a contracted software company. An on-premise solution is bought from a software company and installed on your premises. It is maintained in-house, or in conjunction with the provider and/or a third-party IT company. A Software-as-a-Service (SaaS) solution is on-cloud software, where the software provider hosts the software and makes it available to you over the internet.

Cost

In-house software comes at a high cost – there is the initial development, hardware and infrastructure costs, and on-going maintenance. This often means having an employee or team dedicated to keeping the software running. Larger corporates often consider an in-house solution because they have the in-house resources. This doesn’t guarantee the best solution as the team already have many demands on their time, and the cost and time to develop and implement a solution can be higher than going to a specialist provider.

With on-premise solutions you have your own version of the software, which must be maintained. If this is done by the product provider you benefit not only from their expertise, but an economy of scale as they will have a number of customers with a similar product.

The economy of scale is greater again with a SaaS solution. The provider is maintaining one product that is used by many customers. SaaS solutions are usually subscription-based, and you pay for what you use, by features or volume. For example, on-farm worker management software providers charge by number of users, number of hectares, or number of workers. ABCgrower is charged by the number of workers actively working each week so you pay less in the off-season. ABCgrower also has add-on modules so you only pay for what is useful to your business.

For comparison, a berry grower considering ABCgrower found it to be fit for purpose and were quoted AUD $5,000 annually. They had previously considered commissioning a bespoke solution as they had not found a suitable off-the-shelf solution. They were quoted over $100,000 for the initial development. Further, it offered no additional returns.

Customisation

In-house software is made-to-measure and is developed to your exact requirements. In this sense it offers the most flexibility and you get what you pay for.

On-premise software can still be customisable as you get your own version of the software. For example, ABCpacker has a number of base modules which are then configured according to your packhouse processes and produce types.

With a SaaS product, the same solution is available to all clients who subscribe to it, so it is the least flexible. However, SaaS products can have different modules and features available, and the level of flexibility is product dependent. For example, there are numerous ways to record your inventory in ABCgrower, as it caters to the needs of many categories from apples, berries and cherries, to veges.

Support and maintenance

All software requires on-going support and maintenance. In-house software incurs the greatest cost, for example a medium-large packhouse will require a team of two to three employees.

An on-premise solution that includes a service-level agreement (SLA) with the software provider (like ABC Software offers with ABCpacker), is a robust, more cost-effective solution. The provider is the expert in their software.

With a SaaS solution, the provider is responsible for system operation and maintenance. You should only need basic computer skills to operate the software.

Data security, backup, and storage

If you have in-house software, you are responsible for data security, backup and storage. This is further cost consideration and requires experience and expertise. With on-premise software you do have some responsibilities, however your provider may offer services to assist. For SaaS products, the responsibility is minimal, for example not sharing passwords. With SaaS, it the responsibility of the provider to keep their clients’ system and data safe and secure.

Pros and cons of in-house software

You have full control over the software, hardware and data, which is both an advantage and disadvantage. Having exactly what you want comes at a very high cost and you do not benefit from the wider experience of an industry provider.

You have control over your own security, again an advantage and disadvantage in that you can set your own standards, but you are responsible for maintaining them.

It is often believed that the high up-front costs of inhouse software is more cost-effective for large businesses in the long-term. However, ABC Software are often approached by corporates who had in-house software that is now past its use by, or who were looking at developing their own software but know this will take a matter of years. A purchased solution can be up and running in a matter of weeks.

Pros and cons of on-premise software

A benefit of both in-house and on-premise solutions is that there isn’t necessarily dependency on the internet. This was traditionally a factor with remote packhouses, however it is changing with connection becoming more widely available. The downside of solutions that are not hosted on the internet is that you have limited remote access.

ABC Software’s ABCpacker is delivered via an on-premise solution. It allows the customisation organisations require to tailor a solution to their requirements and is not reliant on internet connectivity. It is imperative packhouses can run continuously and ABC Software offer 24/7 support for their solutions. They have a team available, rather than the responsibility lying on the shoulders of one or two employees (and what happens if that person leaves?).

An on-premise solution offers customisation at significantly less cost than an in-house solution. This is however limited to tailoring what the provider offers, rather than a bespoke in-house solution.

Pros and cons of SaaS software

SaaS software has much lower upfront costs. SaaS software is often scalable for growing businesses and should allow you to start simple and add modules as you require them.

Customisation is not available with a SaaS solution. However, a product like ABCgrower offers flexibility through various ways of collecting and visualising information, as well as allowing clients control over how they set up their system. ABC Software also continue to enhance their SaaS products in response to client feedback, however modifications cannot change the way the product is being used by other organisations.

Because SaaS software is delivered via the internet you can access your account from anywhere. The flipside is that you always need an internet connection. Being horticulture specialists, ABC Software is aware of the connectivity limits on a farm and have an off-line app where data can be recorded digitally and uploaded to the website when in range.

With SaaS software the provider is responsible for maintenance, updates, backup and data security. This can be a time-consuming and costly aspect of in-house software.

In conclusion

The initial outlay for an in-house solution is usually prohibitively expensive, and the on-going overheads are significant. An on-premise solution is a good option where you have specialised requirements that don’t fit an out-of-the box offering, and where connectively is poor or unreliable. This is why ABC Software offers ABCpacker as an on-premise solution.

A SaaS solution is cost-effective and low maintenance. SaaS is often simpler with limited options and less flexibility, however not necessarily so. This can also be beneficial where you have compliance requirements as the software will have been designed to meet those requirements, for example as is the case with ABCspray.

Regardless of which type of software you choose it should solve a problem, for example remove a lot of manual processing, or offer you benefits, like streamlining your operation. You now understand the types of software solutions and the differences between them, to help you on your software journey.