On-premise vs. cloud
for intelligent
document processing

2024-02-05
Technology
Henning Jostes

On-premise vs. cloud

When implementing software for intelligent document processing (IDP), the key question is whether a cloud-based or on-premise solution should be used. But how do the systems differ in terms of important aspects such as data security, flexibility, costs and operating costs?

In order to answer these questions, the terms on-premise and cloud should first be clarified:

On-premise describes the operation and management of IT resources (software and hardware) "on site" within a company or organization. The IT infrastructure is operated and managed by the company itself. This means that the software for document processing is also installed, operated and maintained on the company's own servers.

Cloud solutions, on the other hand, are usually offered by external providers who provide the necessary infrastructure, such as servers, storage and databases. This service can be used flexibly by the client company as required and is therefore also referred to as Software-as-a-Service (SaaS), as the manufacturer is responsible for the infrastructure and software.

Key features and challenges of on-premise solutions

On-premise solutions for intelligent document processing have the advantage that the company itself has complete control over the infrastructure and data, as these remain within its own company network. In addition, the on-premise implementation of an IDP solution enables a high degree of customizability to specific requirements.

However, these benefits do not come without their challenges. On-premise IDP solutions require a significant initial investment in hardware, infrastructure and software licenses. In addition, the company is responsible for the maintenance, updates and security of the systems, which requires additional human resources and expertise from internal IT.

Another challenge is scalability. In contrast to cloud solutions, which can be easily adapted to increasing or decreasing document processing volumes, scaling on-premise solutions often requires additional hardware and can be time-consuming and cost-intensive. Flexibility also suffers, as access to the system is usually only possible within the company network.

On-premise systems are also heavily dependent on the company's technical infrastructure. Local disruptions and failures can have a significant impact on the availability and performance of IDP systems. The risk of data loss is also higher without external backups. Furthermore, the implementation of new technologies and innovations in on-premise systems generally takes longer than in the cloud and is often accompanied by costs for support from service providers.

Widespread concerns about cloud-based solutions

Various concerns are often expressed about cloud-based solutions, which must be taken seriously - especially when it comes to the processing of sensitive data and documents.

One of the biggest concerns is security and compliance. There is often a fear that data in the cloud could be less secure. However, modern cloud services implement advanced security measures such as encryption, regular security training and compliance with strict data protection standards. These security measures are often more comprehensive than those found in many on-premise systems.

Certification systems such as ISO 27001 or the Cloud Computing Compliance Controls Catalog (C5) for cloud providers and users are important standards in addition to GDPR-compliant data processing. data security and compliancethat should be met by IDP SaaS. In our Buildsimple team, the Data Protection & Information Security Officer Malte Sukopp deals exclusively with the topics of compliance and information security.

The assumption that cloud solutions are more expensive in the long term is another common concern. However, cloud services reduce the need for high initial investments in hardware and minimize maintenance costs. Unlike on-premise solutions, no high acquisition costs are required and the cost of the service is based on the solutions booked and the volume of pages to be processed. In addition, the pay-per-use model and the option to purchase either a monthly or annual license enable transparent cost control.

A frequently cited advantage of on-premise solutions is the high degree of customizability to individual requirements. However, individual adaptations in on-premise systems require qualified IT specialists and are associated with a high use of resources. Thanks to APIs, however, most cloud solutions now also offer customization options and easy integration into existing systems. The Buildsimple Marketplace also offers the opportunity to acquire and directly use trained AI solutions for specific, specialist use cases.

Advantages of cloud-based intelligent document processing

Cloud-based Intelligent Document Processing offers companies a number of advantages over conventional on-premise implementation, which are explained below.

Scalability

Companies can easily adapt their document processing capacities to changing business volumes without having to invest in additional physical infrastructure. This flexibility is particularly important for companies with fluctuating document volumes. The scope of the service can be expanded during the current subscription or before the start of the next renewal period and can also be reduced if necessary.

Cost efficiency

With cloud-based IDP solutions, companies can save considerably on initial investment. There are no costs for purchasing and maintaining expensive hardware and software. Instead, they use a pay-per-use model, which enables efficient cost control and reduces capital expenditure.

Fast implementation & updates

Cloud solutions can be implemented more quickly than traditional on-premise systems. In addition, software providers take responsibility for maintenance and updates, which ensures that the systems are always up to date and require little effort from the internal IT team. This allows companies to focus on their core business and use the service with ease.

Flexibility & accessibility

The cloud enables access to the system from anywhere and thus supports flexible working models such as home office and mobile working. This accessibility promotes collaboration between teams, regardless of their location.

Security

Despite concerns about data security, cloud services generally offer advanced security measures. These include encryption, regular security audits and compliance with data protection standards. Companies should ensure that all security requirements necessary for them are met before booking the SaaS.

Data protection & backup

Cloud providers provide automatic data backups and robust disaster recovery plans. This minimizes the risk of data loss due to hardware faults or total failures and also relieves the burden on the company's own IT.

Innovative technologies

Companies benefit from faster access to the latest technologies and innovations in the cloud, which are developed and rolled out by the software provider. Integration with other cloud services and advanced AI functions is also facilitated.

Summary and conclusion

The choice between cloud-based and on-premise solutions in the area of intelligent document processing (IDP) is a key issue for many companies. Conventional software implementation as an on-premise system may seem obvious for companies that have used few cloud services to date. However, the trend is clearly moving towards the cloud - especially in the area of document processing, where the advantages of software as a service (SaaS) outweigh the disadvantages. Widespread concerns about cloud-based solutions, as described above, are adequately addressed by appropriate measures and security standards.

Aspects such as uncomplicated implementation and scalability, transparent cost control and low maintenance and operating costs relieve the burden on in-house IT and are clear advantages of cloud solutions over on-premise solutions for intelligent document processing.

The following guiding questions you should ask yourself when making your decision:

Does your internal IT department have sufficient capacity and know-how to implement an on-premise IDP operation (maintenance, support, updates)?
Are you able to implement and maintain comprehensive security and data protection measures for the processing of your documents?
Do you have the necessary budget to implement an on-premise solution (costs for additional servers, storage capacity and external service providers)?
Should the software be accessible from any location?
What are the total costs of implementing and operating an on-premise IDP solution compared to cloud or SaaS software?

Buildsimple: Cloud solution for intelligent document processing

Buildsimple offers you the full range of Intelligent Document Processing as a cloud solution. Convince yourself of our quality and ease of use:

Software-as-a-Service: We take care of operation, maintenance and updates
Compliance: GDPR-compliant, ISO 27001 certified and can be used in BaFin-regulated companies.
Fast implementation: no complex and expensive AI projects necessary
No-code: our platform is designed for the specialist area
Average cost savings of 70% after 6 months