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Inventory management systems have a significant impact on the efficiency, scalability, and profitability of businesses.  It is crucial to make sure that the right products are in the right location at the right time. Thus, you need to choose the right inventory management software in India is more than necessary. Since technology is developing instantly, companies need to decide on which one they should adopt: a cloud-based inventory management solution or a traditional on-premise system. 

In this blog, we are going to break down the main differences, together with the pros and cons of each inventory management system, thus making it easy for you to identify which one will suit you the best.  

 

What is Cloud-Based Inventory Management? 

 Cloud-based inventory management is a system that tracks, manages, and optimizes a company’s inventory online. Software for cloud-based asset management is accessible online and hosted on the provider’s servers. With the help of a cloud-based inventory management system, you can manage your stock from anywhere with the help of an internet connection. There is no need for any manual updates or your physical presence. 

 Benefits of the Cloud-Based Inventory Management:  

  • Accessibility: With cloud-based inventory management, you can manage your inventory from anywhere with an internet connection.  
  • Scalability: Flexible subscription options are available, which provide easy adaptation according to growth or demand changes.  
  • Cost-effectiveness: Businesses will be able to avoid large upfront investments in hardware and software by paying low monthly costs.  
  • Automatic Updates: Cloud-based asset management provides the most recent features and security enhancements without any need for manual updates.  
  • Real-time Visibility: You will get up-to-date information on stock levels across locations from anywhere.  
  • Integration: It can be easily linked to other cloud-based corporate solutions. 

Drawbacks of Cloud-Based Inventory Management:   

  • Internet connectivity: It needs stable internet connectivity.  Inconsistency in interconnection can impair access to programs and data during outages.  
  • Potential Cost Fluctuations: If not properly monitored and managed, usage-based pricing can result in unanticipated charges.  
  • Security Concerns: While cloud companies make significant investments in security, data breaches can occur.  
  • Reduced Control: Businesses have less control over the underlying infrastructure, which may limit customization options.

 

What is On-Premise Inventory Management? 

 An inventory management system where the software and data are hosted on the server of a particular company, rather than cloud storage, is what we call on-premise inventory management. Businesses have more control over their data and systems with this strategy, but they must also handle the security, software, and hardware components themselves. 

Benefits of on-premise inventory management: 

  • Control and Security: With an on-premise inventory management system, businesses have complete control over their data, hardware, and security measures.   
  • No Internet Dependence: On-premise systems do not require internet connectivity, so they will not be affected by any kind of power outage.  
  • Customization and Integration: Businesses can customize on-premise solutions according to their specific requirements and integrate them with existing systems.  
  • Predictable expenses: It is seen that on-premise infrastructure costs are more predictable in the long run. 

Drawbacks of on-premise inventory management: 

  • High Initial Investment: Even if the later costs are mostly predictable, in the beginning, significant funds are required to purchase and deploy hardware, software, and infrastructure.  
  • Scalability Limitations: Scaling on-premise infrastructure can be complicated, time-consuming, and costly.  
  • Maintenance and Management: Companies might find that maintaining and upgrading the on-premise systems may be expensive and time-consuming.  
  • Limited Accessibility: Access to on-premise systems is usually limited to the local network, unless remote access solutions are enabled. 

How to Choose the Best Inventory Management Solution for Your Business?

 Understand your business:

Identifying the best inventory management solution for your business starts with identifying your needs. First, you need to define your business needs and goals. The requirements will vary according to the size, type, and target audience of your business. 

Look for the required features:

As the requirements change for each business, you need to select the right inventory management system that has the required features to satisfy your needs. Check whether you need real‑time inventory tracking, batch/serial number logging, and multi-location visibility, barcode scanning, label printing, etc. Also, some might need automated reorder alerts and smart purchase suggestions based on demand patterns. Identify the features you need and then purchase the best one.  

User Friendliness:

Since the inventory management system is managed by various people, it is essential to ensure its user friendliness. You might investigate things like whether it is easy to manage, or the interface is easily navigable, and so on. Features like being able to access from smartphones and tablets can be an added benefit.  

 Consider your budget and resources:

Understanding your budgets and resources is an important factor in selecting the right inventory management application. If you have a limited budget and resources, you may prefer a low-cost or free system with a basic UI and easy setup.  However, if you have more resources and demand greater capability and customization, you may choose a higher-end system with more features and options. 

Choosing the right inventory management system for your business solely depends on your business requirements and goals. For instance, if you are looking for better flexibility, accessibility, scalability, etc, then a cloud-based digital asset management system will be the best option. On the other hand, if you are looking for greater control and you are operating in a low-connectivity network, then an on-premises system is your right choice.  However, compare your needs and goals with what each system offers before making your final decision in choosing an asset management software in India. SMACC, being one of the top providers of inventory management providers in India can assist you in analyzing your needs and helping you to choose the right system for your business.