Pros and Cons: On-Premises vs. Cloud-Based Document Management

By Stephanie

When you get down to actually implementing a new document management system for your company, one of the first questions you’ll encounter is, “Should we move everything to the cloud?”

Cloud storage, customer management, and computing have potential to revolutionize the way your business operates. However, moving all your essential documents to the cloud might not be right for every company.

In this article, we’ll look at the pros and cons of cloud-based document management, and we’ll examine the difficulties of setting up your own management solution on-site.

Benefits and Drawbacks

Cloud-based solutions have become popular in recent years and for good reason. They’re often easier to set up and cheaper to maintain. However, on-site solutions offer more control and zero downtime, but at higher setup costs.

Let’s look at some of the benefits and drawbacks.

1. Cost

This one goes to cloud-based solutions. It’s usually much cheaper to pay Microsoft, Dropbox, Google, or one of their competitors to store your information for a monthly fee. According to SoftwareAdvice, you should budget about $20-$50 per user per month, with more expensive prices for added functionality and custom document solutions.

On the other hand, a dedicated server on-site can cost thousands of dollars in equipment and hundreds more in licensing fees. Add on the cost of paying professionals to set the server up and maintain it, and you’re looking at a significant investment. If you’ll have hundreds of users for your system, this initial cost might make sense. For smaller operations, it generally doesn’t.

2. Infrastructure

Cloud-based solutions take this category as well. Initial setup just takes a few clicks, and you can upload all your documents within a matter of minutes or hours (depending on how big your collection is).

RackSpace also notes that cloud-based solutions are easy to upgrade. All you have to do is click a few buttons or place a phone call and your system can have more storage, RAM, computing power, or availability. This scaling ability makes cloud-based solutions especially attractive, but of course, it comes at a monthly expense.

On-site document management requires significant infrastructure to support it. First, you’ll need a space in your office where you can build the server, which could range from a closet to a large room depending on your storage requirements. It may also take a few days to a few weeks to get all your documents into the new system.

The benefit is once you’ve built your system, you own it, and the only ongoing cost is the cost of electricity. Of course, should something go wrong, you’ll have to pay to fix it, and any upgrades to your system take significant time and money.

3. Control

For companies that value control of their document management from start to finish, an on-site system makes sense. Cloud-based solutions do offer a measure of control since you can decide how much storage you’ll need, how many users you’d like, and what kind of specifications your system requires. Many of these cloud-based providers will also customize their systems to your needs.

At the end of the day, however, your data resides in a data center somewhere far away, and some options for upgrades or customization simply won’t be available. If a custom or high-powered system is necessary for your company, on-site document management may make sense. In certain scenarios, a hybrid of the two also makes sense - custom applications on-site and general storage on the cloud.

4. Security

This one is a toss-up. While there’s something comforting about owning your own dedicated server and being able to physically lock it up, cloud-based providers have a huge incentive to provide top-notch data security for their clients.

On the other hand, cloud storage companies are a big target for potential hackers, as we saw in the 2016 Dropbox hack that exposed over 60 million passwords. Security and privacy are important topics to discuss with a consultant who can walk you through your options. It may be worth the initial setup costs of a private server to keep your data private.

Need Help Deciding?

Each company’s implementation of document management will be different, so hiring professionals to help you can be critical. Kelley Imaging Systems is a leading office technology company in the Pacific Northwest, offering custom document management solutions to industry-leading companies. Contact Kelley Imaging today to talk about which document management solution works best for your company.

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