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Cloud, on premise or both - what do experts advise?

Modern supply chain management software helps companies to manage complex processes and workflows while coordinating interfaces with suppliers, manufacturers, transport companies, retailers and other stakeholders.

(Bild: Pixabay)

LN Consult, 02.02.2022

Supply Chain Digitalization

Despite the integration of digital solutions, it is no easy task, for example, to make a customer order consisting of different groups of goods available in the right place at the right time - supply chain management software helps to make this happen.

But supply chain management software moves across a broad field of tools and modules. So when we talk about supply chain management software, we don't mean a single program, but rather the interaction of software, tools and modules that together map and manage the process from raw material procurement to final product delivery. In this process, the software supports not only the product flow but also the flow of information and financial flow.

Often providers specialize on a particular part of the supply chain and offer solutions that look at specific process steps and optimize them.


Supply Chain Management Software

Customized software solutions help to optimize the entire supply chain network. To do this, manual business processes are digitized, and generated data is transferred to platforms. 

The types of supply chain management software can be roughly divided into functional areas. For example, they optimize inventory management, warehouse management, forecasting, order management, supplier and customer relations or transport management.

LNConsult specializes in software that mainly focuses on simplifying processes at the warehouse. The VOS app, for example, helps to capture logistic master data of items or shipments (packages), which basically are important for many logistic processes. The Truck Scheduling Tool (TST) is a management tool that manages trucks at the incoming and outgoing goods gate. Time windows for incoming or outgoing trucks can be assigned and trucks do not lose time because of waiting for a free gate or available personnel resources at the gate.

Both, TST and VOS, offer a limited range of functions, but are very specialized for certain processes and can be easily combined with existing applications or can be extended at a later stage.

Many software solutions are created on customer request - some develop into standard solutions due to their broad applicability and can be also offered to other customers. Software development has also become more and more important at LNConsult in recent years and development resources have increased significantly.

From April 2022, a specialized Software & Service Development Team will focus even more on corresponding software developments. Their main task is to evaluate customer requirements and transfer them into helpful, process-simplifying software applications.

The need on the customer side is huge - especially because often only solutions are available that offer a broad range of functionalities - far more than required by the customer. The costs are respectively high and sometimes not justified for the use case. On the other hand, such standard solutions are also often a compromise, as they do not fulfill 100% of the customer needs although the overall functionality is massive. LNConsult will continue to build on software that is adoptable for the needs of the customers and they do not have to make compromises.


What happens with the data

When we talk about digital solutions and supply chain management software, we also have to talk about "cloud" or "on premise".

In cloud solutions, data is stored on external servers. There are different characteristics, depending on whether only applications or data or entire infrastructures are operated externally. In many cases, external cloud resources are used, which can be set up quickly, operated securely and expanded cost-effectively. Maintenance and updates of the application are usually carried out automatically in the background by the supplier - without any further action on the part of the customer.

On the other hand, on premise solutions deliver software to the customer who then operates it in the company's own infrastructure. The customer is usually responsible for maintenance and support himself.

The TST and VOS solutions from LNConsult described above are available on premise and as a cloud solution. The advantages and disadvantages of the two variants could be summarized as follows:


Cloud Software:


+ quick setup and rapid start of operations

+ possibility to start small and expand and scale later or successively

+ software always at the latest security level

+ latest features and enhancements are mostly and increasingly handled "cloud-first”

+ resource-saving

+ complete data protection and operation of the infrastructure is on the provider side


- less influence on application, no control possibility

- ongoing usage fees

- dependence on provider


On Premise Software


+ application data stays exclusively in own hands

+ access to data also possible offline

+ flexibility and unlimited control


- availability and implementation of security patches ("cloud-first")

- all responsibility including facilities and maintenance as well as operational management of the data center infrastructure managed by own IT

- dependencies on external force

- cost of services (maintenance/support/updates)


The best solution

As always, the best solution needs to take into account various factors. At this point, we explicitly recommend consulting external digitization experts in order to identify and professionally evaluate as many decision-making criteria as possible.

The external - and above all independent - view on internal circumstances, customer expectations and medium- and long-term strategies is essential for a good decision-making process.

Current studies show that cloud services are becoming increasingly popular. Of course, scalability and security aspects are driving this development.

In this context, the hybrid approach is also interesting, as it offers a compromise but also a smart way into a cloud solution. Here, the application runs in the cloud, but the data remains in the company's own data center.