Introduction
The construction industry is evolving rapidly. Just a few years ago, contractors and subcontractors relied on traditional construction management tools such as pen and paper, basic Excel sheets, and phone discussions. However, today’s market is flooded with powerful tools designed to estimate construction costs, track tasks and employees, and manage CRMs to generate leads and convert them into high-ticket clients and much more. For instance, bid management tools are changing the way contractors now send and receive bids. There are mainly two kinds of bidding tools in the market: cloud based bid management software and on-premise solutions.
Therefore, an important question arises. Should your company go with a cloud-based solution, where you get some flexibility and remote accessibility, or should you prefer to stick with the on-premise solution where you fully control the data, the security, and everything? It’s like deciding if you want to zoom home in some fancy sports car or cruise along in a reliable SUV. They both will get you there, but they cater to two very different needs. In the next section, we’ll explore both of these options
What is Bid Management?
First of all, let’s briefly understand what bid management means before going into the comparison. In general, bid management refers to the preparation of bids for projects and contracts, the submission of bids, and the tracking and management of said bids. It’s an essential role in most construction business sectors where organizations bid for projects by supplying company proposals.
Now, with technology constantly evolving, construction businesses have to decide between two different types of bid management solutions: Cloud-Based and On-Premise.
Defining Cloud-based Bid Management Solutions
Quoting Marc Benioff “The cloud services companies of all sizes… the cloud is for everyone. The cloud is a democracy.”
Cloud-based bid management solutions allow bidders to manage bids through internet-based solutions. These platforms are located on central servers and run through a browser, which suggests that there is no need for installation of the software on a local device. Some examples of such systems are applications like Procore and Bldon, which allow teams to manage bids from any place.
Defining On-premise Bid Management SolutionsÂ
On the other hand, there are On-Premise Bid Management solutions where the software is actually installed on your company’s server. You run the system locally; this means that your IT department is in charge of the system update, security, and the system’s upgrades. Although this option is more flexible, there are more challenges in adopting the bid management software on the part of the user.
Key comparison factors:
1. Scalability
With the growth of your construction business, your bidding requirements are also going to scale up. Therefore, you need to have a system in place that can accommodate the increased quantity of bids. Here’s where the two systems differ:
Cloud-based solutions are designed to be easy to expand. If, for some reason, you go from managing a specific number of bids, let’s say 100, up to double or triple that amount, then the cloud platforms can react almost identically. With everything hosted remotely, the majority of the real job may be completed from a distance. The great benefit is that you will not need to purchase additional hardware or run into issues with credits and pay extra fees for the added features and the like.
On the horizon, On-Premise Systems are characterized with more limitations compared to Cloud Systems. To scale you require buying additional servers, more equipment, and IT persons or professionals to manage all the equipment. You build it sort of like you would build a new office structure – if it gets too cramped and you need more working areas and equipment.
Bottom Line: In case you want your solution to scale easily, then Cloud-based solutions are preferable.
Cloud-Based: Research within industries showed that businesses with cloud-based systems benefited from a 55% improvement in scalability and flexibility as they grew. This helps them to be able to scale up or down resources at will – Software Connect.
On-Premise: While the on-premise systems lack flexibility and scale poorly, their scaling may be extremely costly and time-consuming, which is evidenced by the surveys indicating a 35% slower scaling compared to the cloud services.
Accessibility
At present in employment, accessibility is crucial since multiple teams frequently work in various locations worldwide. This highlights the importance of bid management solutions.
With cloud-based Bid Management Solutions, you can access your bids wherever you are as long as you have internet access. However, to use On-Premise Solutions, you usually must stay at your office or connect through a secure network. Without a complex VPN setup, accessing bids outside the office becomes difficult, and that particularly restricts teams that move frequently.
Bottom Line: Construction Businesses that are looking for flexibility and remote access should opt for Cloud-Based.
Cloud-Based: Companies that have adopted cloud solutions have reported a 40% increase in work efficiency as a result of their global access and shared collaboration tools.
On-Premise: On-site systems frequently limit access for employees and particular networks, which hampers remote work choices but provides more stable performance in areas with inconsistent internet.
Reliability
Downtime may interrupt your construction business’ functioning and push back deadlines along with missed chances. That is why both solutions offer solid uptime, but here’s how they compare:
High uptime is typically found in Cloud-Based systems reaching 99% or higher because of the replication of server and data. These resources include Service Level Agreements (SLAs) that promise solid performance and disclose what you can anticipate.
The reliability of On-Premise Systems relies solely on support from your existing infrastructure. In cases of server problems or hardware issues, it falls to your team to rectify them potentially resulting in more downtime.
Bottom Line: Organisations that value reliability usually present Cloud-Based options as a superior choice.
Maintenance
People do not wish to be bothered by frequent system updates or system and hardware crashes. Let’s face it: The fact is that even the question of its maintenance can be a headache.
Cloud-Based Solutions does all those changes and upgrades in the background. It will be all easy for you, you’ll not need to lift a finger. Providers release new updates to the programs as soon as they can, thus, inactive users get to use the last version. It’s like having someone else do yard work for you, you just get to reap the benefits.
Graphs show that On-Premise Systems include system management by the user, which means that you are fully responsible for updates and maintenance. That means you and your IT department will have to check up periodically to make sure there are no breaches into the system nor is the system itself malfunctioning. Yet again it is more time-consuming and may divert attention from other business areas.
Bottom Line: Cloud-based can be your best bet in this case.
Security
The issue of security becomes of paramount importance when handling sensitive bid information. While both solutions offer protection, the way they handle security differs:
On-premise systems give you complete control of your data. No one is forcing you to install protections that are not adequate for your company; you are in charge of them. If you’re operating within a highly regulated field, then having such a level of control might be something to look forward to.
Cloud-based solutions are typically very secure across the entire platform, using features such as encryption, two-factor authentication, and monthly security updates. Quite often, these providers hire specific teams for security and offer certain levels of security that some small construction businesses cannot provide.
Bottom Line: If you want full manageability of your security issues then you may prefer an On-Premise. However, cloud-based platforms provide high-security features without much fuss.
Cloud-Based Security: According to a cloud system uptake survey, 90 percent of construction businesses using cloud systems report fewer incidences of data breach, thanks to enhanced encryption and strong vendor-based security measures​(Wunderbuild). However, there’s a higher tendency to direct misconfigurations to vulnerabilities that an attacker can exploit.
On-Premise Security: Organizations prefer on-premise deployment with regard to processing highly sensitive information. Higher satisfaction was detected in controlling factors but subjects had concerns related to the high operational overhead in managing security updates.
Costing
Ah, the all-important question: How much does it cost? Well, the answer varies depending on which solution you choose:
On-premise systems are known to bear sizable initial charges and therefore are typically a costly option. You will need to obtain the licenses for the software, input the product on your company’s servers, and, in some cases, hire other technical staff to maintain it. Additionally, there are costs for additional updates, technical support, and other unscheduled repair works. It’s like buying a car—you pay for it and then spend years worrying and spending money to keep it running.
Cloud-based solutions are offered on the principle of usage being charged on a subscription basis. For that, you will be charged on a monthly or annual basis, which can be a welcoming feeling for construction companies that do not wish to go down deep in their pockets as was the case with an annual fee basis. More like leasing a house: There are no huge payments upfront as in traditional hosting service, the property owner takes care of repairs, and in this case, maintenance is done by the cloud provider.
Bottom Line: If you’re budget-conscious and prefer lower upfront costs, Cloud-Based solutions tend to be more financially flexible.
Average Cost
Cloud-Based Costs: Earlier it was noticed that the average cost for cloud resort bid management solutions may be from 50 to 500 dollars per user monthly. Large organizations may also be charged extra for features such as customization or when expanding the system use across the enterprise.
On-Premise Costs: On-premise solutions normally entail an initialization cost followed by an annual cost normally between $10000 to $100000 based on infrastructure. On the basis of average estimate calculation, it has been observed that an on-premise system could save about 20-30 % of the total cost of the system over a time period of 10 years but it is comprised of complexities involving the maintenance and the upgrading of the system​ (Wunderbuild)​(Software Connect).
Customization
Not all construction businesses are the same, and some require software that has to be customized for their operations.
On-premise systems tend to provide more flexibility as you own the software being used by your organization. You can bend it to the company’s needs which makes it relatively good for construction businesses that have specific needs.
Cloud-based solutions are generally cheaper, and more standardized than on-premise solutions. Some level of customization required should be achievable, but it will be within the framework of using the platform. It’s more or less like living in a house with furniture provided; one moves the furniture from one place to another but the place you are occupying remains the same.
Bottom Line: If you require tighter control and a high level of customization, On-Premise systems are by far more versatile.
Speed of the management
The quicker you can deploy your bid management solution, the quicker you will get to harvesting the gains.
Cloud Based Solutions are easy to implement since they are hosted on the internet. Everything is web-based, so to join, set up basic parameters, and start handling bids you need no more than several minutes. It’s like takeout food—it takes little time to prepare, and it is ready to be consumed immediately.
On the other hand, On-Premise Systems demand more time for the overall hierarchy. There will be the costs of buying the software, establishing the servers to make the software run, and providing your employees with the necessary training on how to use the software. With this approach, it can take anything from several weeks to several months to complete and this is based on the complexity of the need.
Bottom Line: If this is the case, Cloud-Based solutions are much faster when it comes to deployment.
Hybrid Solutions: The Best of Both Worlds?
Although a number of construction companies have found that either cloud or on-premise strategies meet their needs to perfection, some of the businesses remain in-between in this case. This has opened up a middle ground as construction businesses can store their data locally while at the same time taking advantage of other applications offered through cloud computing. This model is especially useful for organizations that require moderate levels of security, but also require flexibility(Software Connect).
Conclusion
In deciding which bid management software to select – cloud-based or on-premise – much will depend on organizational requirements. If organizations have to contemplate greater flexibility, better access, and affordability then cloud systems are commonly the best choice. However, if control and customization are considered to be crucial, on-premise solutions can be the best solution.
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