1. What is Cloud-Based ERP?
Cloud-based ERP is the delivery of software as a service (SaaS – Software as a Service) over the internet.
All data is kept on the software provider's secure servers, and users access the system via browser or mobile app.
Key Features:
- Access from anywhere with an internet connection
- Automatic updates and maintenance
- No hardware investment required
2. What is Local Installation ERP?
Local installation (on-premise) ERP is the system in which the software is installed on the company's own servers and maintenance and updates are carried out within the company.
Data is stored in the company's own data center or physical servers.
Key Features:
- Data is kept entirely in-house
- High flexibility for customization
- Internet addiction is minimal
3. Advantages of Cloud-Based ERP for the Spare Parts Industry
The fast and dynamic nature of the auto spare parts industry includes many elements that make cloud solutions attractive :
a) Fast Installation and Low Initial Cost
No hardware, additional servers, or license costs are required. Operating on a subscription model, cloud ERP offers an accessible solution for small and medium-sized businesses.
b) Instant and Remote Access
Branches, dealers, and mobile field teams can work in real time on a single platform. This is a critical advantage, especially for businesses with multiple branches or large dealer networks .
c) Automatic Updates and Security
The software provider automatically handles all security patches and version upgrades. This reduces IT staff costs and ensures continuous access to the latest technology.
d) Scalability
When stock volume or number of users increases, system capacity can be easily expanded without additional hardware investment.
4. Advantages of Local Installation ERP
For some spare parts businesses, locally installed ERP may still be preferable.
a) Data Control and Privacy
All data remains within the company, a critical factor especially for companies with strict corporate privacy policies or limited internet access.
b) Extensive Privatization Opportunity
ERP can be adapted more deeply according to the company's specific processes and existing software.
It is advantageous for large companies with complex production or import processes.
c) Internet Independence
It provides reliability for businesses in areas with weak internet connectivity or where the risk of outages is high.
5. Cloud vs. Local Installation: Comparison Chart
| Criterion | Cloud Based ERP | Local Installation ERP |
|---|---|---|
| Starting Cost | Low (subscription) | High (hardware + license) |
| Maintenance and Update | Automatic, provider responsibility | In-house team required |
| Access | From anywhere with internet | Internal network or VPN only |
| Scalability | High, fast | Slow and costly |
| Privatization | Annoyed | Wide |
| Data Control | Provider responsibility | Completely under company control |
| Application Speed | Fast | Medium/long term |
6. Selection Criteria for the Spare Parts Sector
When making a decision, it is necessary to find clear answers to the following questions:
- Number of branches and dealers : If there are multiple locations and mobile field teams, cloud ERP provides a great advantage.
- IT infrastructure and budget : Cloud ERP is more cost-effective and practical for companies that do not have a strong internal IT team.
- Data security expectations : Companies that want to keep sensitive customer and pricing information on their own servers may prefer a local installation.
- Need for flexibility : If deep integration and customization are required according to specific business processes, local installation is more suitable.
Conclusion
Cloud-based ERP stands out with its advantages of low cost, fast installation and unlimited access, especially for multi-branch, large dealer networks or fast-growing spare parts businesses.
Locally installed ERP remains a strong option for large or security-sensitive companies that want data control, customization, and internet independence.
The best approach would be to analyze the strengths and weaknesses of both models and make a decision by taking into account your company's operational needs, budget and growth goals.
Penamo's auto spare parts ERP solution offers this flexibility with both cloud-based and local installation options and easily adapts to the different requirements of the industry.
