May 15, 2020 Ezra Kelderman

FDA Regulatory Compliance Software: Cloud vs. On-Premises

Should you use a cloud-based FDA regulatory compliance software or host a solution on-premises?

It's a question we hear a lot.

Many companies justifiably wonder if the decision between cloud vs. on-premises software can have an impact on regulatory risk or data security. In FDA-regulated industries such as pharma and medical devices, it's wise to take a conservative approach to risk.

While software-as-a-service (SaaS) may have been a business risk when cloud computing was first introduced, cloud software has reached maturity and become significantly more secure and stable. Cloud software is quickly reaching full adoption. Ninety-four percent of organizations are using the cloud, including the majority of organizations in highly regulated industries.

Unfortunately, some companies choose on-premises software because of outdated myths about cloud risks. Comparing cloud vs. on-premises software is now like a physician asking a patient "would you like to try antibiotics or would you like to go straight to amputation?"

Let's take a look at some of the reasons companies consider on-premises FDA regulatory compliance software and how cloud solutions stack up.

The 2 Types of FDA Regulatory Compliance Software

FDA regulatory compliance software is a category of technology designed to simplify compliance and risk management for organizations in industries such as pharmaceuticals and medical devices. FDA compliance software generally exists as part of a comprehensive electronic quality management system (eQMS) which supports compliance with FDA requirements such as 21 CFR Part 11 and standards like ISO 9001 and ISO 13485.

Common features which support compliance with FDA regulations can include digital signatures, document management, document control, training, audit trails, data integrity, CAPA, change control, and validation/revalidation.

Type #1: Cloud-Based

Cloud-based software is hosted and maintained by a SaaS vendor and licensed with a subscription model. Your organization pays an annual or monthly fee for the software based on the number of user licenses and fully outsources software maintenance and hosting to the vendor. Cloud applications are web-based and generally mobile-accessible. In addition to access, your subscription fees pay for the vendor's software updates, servers, and network.

Type #2: On-Premises

On-premises, legacy software is hosted and maintained by an organization and sold using a traditional licensing model. Usually, your organization pays a one-time fee to a vendor for licenses and an additional annual fee for support and software maintenance. On-premises deployments require an initial investment in hardware and network resources, which include all components of the network infrastructure, data center, power and cooling equipment, servers, operating systems, and databases.

There are also lifetime maintenance costs related to premises-based deployments related to hardware updates, expansions, security patching, troubleshooting, and more. On-premises deployments aren't always located in a physical building and may occur in a private cloud environment which is maintained by an organization.

Asking about the difference between cloud vs. on-premises deployments is a question which has less to do with FDA regulatory compliance than technological responsibility. When you're comparing these two options, you're asking about cost models. The question is effectively "do we want to assume all of the risk and cost associated with the software or outsource to an expert vendor?"

3 Common Misconceptions of On-Premise FDA Regulatory Compliance Software

In the past, on-premises FDA regulatory compliance software was the only option for organizations. Organizations maintained responsibility for their software applications and purchased licenses from vendors. The only choice in this area was limited to the largest FDA-regulated organizations with the resources to build and host their own homegrown QMS solution.

Enterprise cloud app adoption grew at a steady rate of 2.7% monthly between 2010 and 2014 and reached the tipping point approximately five years ago. Post-2014, cloud app adoption has increased at 5.4% monthly.

Organizations who are seriously considering an on-premises deployment generally have a reason for evaluating self-hosting software. Commonly cited reasons include data security, customization, and implementation. However, in many cases, these perceived benefits may actually be risks that need to be carefully evaluated before committing to an on-premises deployment.

#1: Lower lifetime total cost of ownership.

It might be true that your organization will pay less on a monthly or annual basis to a software vendor with a premises-based FDA regulatory compliance solution. However, traditional software licensing fees are only one part of the cost equation. A true SaaS vs. on-premises cost analysis is based on the total cost of ownership (TCO) and should account for the costs associated with implementation, annual upgrades, revalidation, IT talent, data center, hardware, disaster recovery, and security. In fact, the total cost of ownership for cloud-based software is, on average, 77 percent cheaper than on-premises.

#2: Local control over data and data security.

Retaining responsibility for data security and backups are increasingly complex and can be an immense risk in FDA-regulated industries, especially at organizations lacking staff members who are skilled and knowledgeable. Your organization will be required to achieve and maintain compliance with FDA requirements for data security, traceability, quality, governance, and retention. Failure can mean regulatory and costly cybersecurity risks.

#3: The ability to customize the software to fit company processes.

You are responsible for implementation, customization, and maintenance during on-premises software initiatives. This increases the risk of a longer-than-expected implementation project, which is a competitive risk in many industries. The potential for a delayed implementation increases if you heavily customize the software. If your implementation and customization involve significant custom code or complex integrations, you also face a higher risk of inoperable software when your vendor makes product updates.

4 Benefits of Cloud-Based FDA Regulatory Compliance Software

Gartner predicts the total value of the global cloud market will grow 17 percent this year alone, to $206.2 billion. SaaS and cloud-based apps are the most widely adopted cloud technologies, comprising over 41 percent of cloud spend last year. Organizations of all sizes are switching to cloud apps to achieve an advantage in risk management, governance, and other benefits. These cloud QMS benefits can be especially significant at startups, scale-ups, and small-to-midsized businesses (SMB).

Benefit #1: SaaS is cheaper

Cloud-based software is, on average, 77% cheaper than an on-premises deployment. However, some organizations stand to save even more if a premises-based FDA regulatory compliance software would require substantial investment in hardware, infrastructure, real estate, or technical talent. Another cost benefit of cloud-based QMS software is the potential impact of the operational expenditure (OpEx) pricing structure. The lower implementation costs of SaaS allow you to distribute the expenses equally over the system lifetime. These funds can be directed into research & development or growth at fast-scaling companies.

Benefit #2: Faster implementation

Across industries, the most commonly cited benefit of cloud software is faster implementation times. Twenty percent of organizations report their company is bringing products to market faster with a SaaS solution. This benefit is especially valuable in FDA-regulated organizations, where speed-to-market is critical to compete effectively.

Benefit #3: Increased agility

FDA guidance and ISO 9001 and 13485 all promote the active cultivation of an agile culture. An agile QMS for FDA compliance can enable your organization to respond quickly to fast-changing market conditions, new regulatory requirements, and the needs of your customer. An agile SaaS solution allows your organization to:

  • Perform active risk management to avoid complexity and compliance issues
  • Create real-time changes to organizational workflows
  • Add features and users in real-time based on need
  • Avoid the costs of heavily customized software, including unreliable integrations
  • Streamline complicated and expensive validation and revalidation requirements
  • Immediately create web-based and mobile-based global access

RELATED READING: 4 Reasons You Need an Agile QMS

Benefit #4: Improved efficiency

SaaS applications reduce the burden on the IT organization. At SMB and startups, cloud-based software adoption can even support a lean organizational structure or eliminate the need for IT talent. FDA-regulated companies of all sizes can achieve higher speed and focus by outsourcing the need to troubleshoot software, maintain premises-based infrastructure, or perform updates.

The Decision is Easy

The decision between cloud-based and on-premises regulatory compliance software has become easy. In short, there are virtually no use cases in today's marketplace where the benefits of on-premises solutions outweigh those of the cloud.

The right cloud-based solution for your organization can reduce regulatory risk and enable your organization to unlock significant benefits such as improved data security, agility, and faster time-to-market. Comparing SaaS to on-premises solutions is a bit like comparing ISO 9001:2008 to ISO 9001:2015. The 2008 version of the quality standard was great until it became obsolete.

The best way to approach selecting a cloud solution is to understand your organization’s growth goals and priorities in the future. Evaluate which benefits can create value in your organization, and what you need to create a quality-driven culture. Focus your efforts on dialogue and software demos with QMS vendors who offer a product specifically designed for FDA compliance at pharma, life sciences, and medical device organizations. Finding a solution which fits your organization’s current stage in the product development lifecycle and growth goals can enable you to maximize budget and benefits.

Qualio is the first cloud-based eQMS solution specifically designed for compliance with the latest FDA regulatory requirements, cGMP, and ISO standards. To request a demo, click here


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Published by Ezra Kelderman May 15, 2020