SaaS ERP – an overview
Enterprise resource planning (ERP) systems are the backbone of many organisations, helping them manage their business processes, from accounting, sales, projects, to procurement and manufacturing.
Although ERP systems offer many benefits, it’s not always feasible for companies to run them on-site. There are many alternatives to on-site hosting, in this article, we look at software-as-a-service as an option.
SaaS ERP is a type of cloud-based ERP software that runs entirely on a vendor or cloud provider’s servers, is sold through subscription and delivered as a service over the internet.
ERP systems have traditionally required large investments in hardware and infrastructure, making them costly and time-consuming to deploy. However, the rise of cloud computing and SaaS has brought about a change in the way businesses approach ERP. Moving ERP to the cloud can help businesses streamline their technology needs and quickly achieve a return on their investment.
It’s important to note that while people often use the terms ‘cloud ERP’ and ‘SaaS ERP’ interchangeably, they are not the same. The complexity of cloud options can make it challenging to distinguish SaaS ERPs from other cloud ERPs.
Cloud ERP solutions support various delivery models
Cloud ERP solutions support various delivery models (not just SaaS but IaaS, PaaS, etc.) and can be deployed in various types of cloud environments (i.e., private cloud, hybrid cloud, etc.). Definition of some cloud delivery models, other than SaaS:
When delivered as SaaS, ERP usually becomes easier to use, less expensive to own and maintain, and more easily connected to other systems and users.
From its inception, the SaaS model was designed to deliver a core set of business benefits versus traditional, on-premise ERP solutions.
The key business benefits include:
Lower upfront costs
SaaS ERP requires a much lower initial investment than on-premise software largely because the cost of infrastructure acquisition, installation, and maintenance is shifted to the software vendor. You won’t need to purchase any hardware or middleware to make the solution operable.
Another factor that leads to lower costs is the minimal internal IT support needed for SaaS software. The vendor is responsible for performing many of the maintenance and support tasks that would otherwise be delegated to your team. This means that your team can focus on other important tasks that can help grow your business.
Serverless computing is another cloud model with relatively low upfront costs. However, other cloud models, such as IaaS and PaaS, may cost slightly more.
Predictable, ongoing costs
In addition to the upfront savings, another benefit of SaaS ERP is that your monthly or annual cost will stay the same until you change your pricing tier so you always know how much you’re spending, and can budget accurately.
Subscription options vary widely, from pricing per user to tiered pricing that packages SaaS ERP and cloud services and resources according to company size etc. While you’ll perpetually be paying for access to the ERP product, you’ll likely still pay less over the long run than you would with an on-premise solution.
Other subscription models, like IaaS, are pay-as-you-go models. The cost will increase based on usage of memory, storage, CPU, and network bandwidth.
On-demand scalability
SaaS ERP is more scalable than on-premise ERP to accommodate growth, acquisitions, additional offices or expansion overseas for example, or respond to seasonal uptakes or downturns in demand making it much more preferable for rapidly growing companies.
With SaaS ERP you to adjust your subscription based on your current and projected needs – scale up to accommodate more data and transactions, without any unnecessary business disruptions. SaaS solutions also make it easy to add new software features and scale your access up or down.
If scalability is a priority for your organisation, you might also consider PaaS or Serverless computing, which also allows seamless scaling up or down.
Accelerated go-Live
An ERP implementation can take up to 6-12 months or more to complete on-site whereas with SaaS you can be up and running much quicker. Without the need to purchase new equipment, hire new employees, or install software on local machines, it’s much easier to implement. This means teams can take advantage of advanced functionality sooner, allowing you to maximise your ROI.
Cybersecurity and compliance
SaaS vendors apply top-tier technologies to protect client data (and in turn, their reputations). Your data backups and disaster recovery are handled by full-time, professional security experts.
Intelligent technologies
While not unique to SaaS, new and emerging technologies are becoming more mainstream, such as:
Intelligent technologies are being built into modern SaaS ERP solutions to improve productivity. As the SaaS ERP market matures, you can expect to see even more affordable and accessible solutions that allow businesses of all sizes to make data-driven decisions.
