Lilo blog

Cloud vs. On-Premise: Understanding the Shift in Hotel Procurement

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hotel procurement software comparison


Hotels that rely on on-premise procurement software are often reluctant to transition to cloud-based solutions, especially if their legacy systems have served them well for years. 

However, this hesitation can keep hotels from realizing substantial savings in process efficiency and supply costs.

Hotels incur significant monthly expenses for sourcing various supplies, ranging from guest room essentials and cleaning supplies to equipment and amenities. 

Therefore, procurement has become a key focus area for many hotel general managers; many hoteliers are now keen to streamline their procurement processes with cloud-based infrastructure or end-to-end solutions.

On-Premise Hotel Procurement Solutions – How it Began 

On-premise hospitality procurement solutions typically operate on privately owned (or rented) web servers; so hotels could customize the software to fit their specific procurement processes. 

This flexibility was particularly advantageous when hotels primarily relied on email and direct mail to process hotel supply purchase orders (POs). 

On-Premise Software No Longer a Popular Choice 

Although on-premise hotel procurement systems were useful for many years, they are now considered a financial burden. 

Hotels need significant upfront capital to invest in IT infrastructure, followed by ongoing costs for software and hardware upgrades.

Security is another concern

While on-premise software might seem secure at first glance, its safety depends on the hotel’s ability to maintain a robust IT infrastructure. 

Lastly, on-premise solutions operate in isolation. They are disconnected from the broader supply chain and struggle to map out the entire hotel procurement process. 

Cloud-Based Infra for Hotel Procurement 

Clunky, overpriced on-premise procurement systems can’t keep up with the evolving needs of the industry, especially in the face of fluctuating prices, supply chain challenges, labor shortages, and rising costs

This is where cloud hospitality procurement companies step in. 

They replace expensive on-premise systems with an affordable subscription model. 

There is no upfront capital investment required. 

The software is accessible from any device with an internet connection and real-time updates and permission-based access ensure everyone on the team has the latest information.

Latest Trend in Hospitality Procurement – All-In-One Solutions with Automation & Built-in Marketplace

While SaaS solutions for hotel procurement services did offer several advantages over on-premise systems, they did not directly help hotels cut procurement costs, or find better supplies at competitive prices with better delivery times and a commitment to quality. 

For example, hotels still needed to find and evaluate hotel suppliers, negotiate prices, and use different tools for demand forecasting and expenditure analysis. 

This is where Lilo, an all-in-one hotel procurement solution, addresses the gaps and even surpasses expectations.

Lilo provides the essential features of a cloud-based SaaS system for hotel purchases, all at no additional cost. 

But that’s not all.  

Lilo offers hotels access to a marketplace with thousands of reputable brands at wholesale rates; the platform even provides financing for hotel purchases with net 30-day terms.

Hotels can onboard preferred vendors or select from reputable suppliers, whether local or international. 

The platform also utilizes AI to –  

  • Assist hotels in locating the best supplies at the lowest prices
  • Optimize inventory to prevent stockouts or overstocking
  • Automate PO approval and reordering

Thus hotel management can gain complete visibility into hotel purchases and ensure strict adherence to established procurement guidelines. 

Those responsible for purchasing supplies can rely on a single system for everything from demand forecasting and supplier selection/onboarding to inventory management and financing.

So, switching to Lilo from on-premise or cloud-based procurement systems is a win-win for hotels of all sizes.