This article is great reference for IT and Business professionals interested in understanding the basics of SaaS ERP (Software as a Service Enterprise Resource Planning), how it works, and its benefits and disadvantages compared to other ERP solutions. It also provides an overview of the features offered and the cost involved with SaaS ERP.
Recent advances in cloud computing technologies and software-as-a-service (SaaS) deployments are at the forefront of changing how businesses think about ERP. Moving ERP to the cloud allows businesses to simplify their technology requirements and see a faster return on their investment. SaaS ERP software allows easy access to business operation software via the internet. It’s cost-effective to install and maintain as the software vendor supports software, servers, network connectivity, and security. It comes in different forms, including SaaS (Software as a Service) and ERP. We will discuss SaaS ERP to help you differentiate it from other ERP types. SaaS ERP has pros and cons; we will discuss these and more below.
Cloud ERP is web-based software. It runs from the vendor’s server, allowing users to access it via a web browser. A cloud ERP deployment has different versions. The most popular versions are single-tenant and multi-tenant versions.
In a single-tenant ERP, one user gets a separate and dedicated software instance. In a multi-tenant cloud ERP model, many businesses share the same software instance and hardware to reduce costs. However, none can access the other person’s data as it is secure and confidential.
A cloud ERP system has a subset called SaaS ERP. We refer to software products in a multi-tenant cloud ERP as SaaS(software-as-a-service). Customers using a multi-tenant SaaS deployment model share the software and the hardware hosting. However, the vendor keeps the software on a server in their data center but delivers it over the Internet.
See our top ten reasons for migrating to SaaS ERP below:
Features include access to:
Why should you opt for a SaaS-based ERP model instead of a single-tenant or an on-premise cloud solution? The benefits of this ERP over these models include the following:
As you look for SaaS-based ERP, consider its disadvantages. They include:
SaaS ERP costs can vary based on your specific business needs. The more features and modules you require, the more you will pay monthly. Generally, businesses using SaaS ERP spend less because they do not buy or maintain hardware or software.
Hence, a vendor will set their subscription fees per user or via a tier system. Consider using a cost of ownership calculator online before buying SaaS ERP.
Businesses have different needs and goals. Hence, one ERP deployment model might not suit all of them. When selecting the most applicable SaaS ERP model, consider unique factors. For instance, choose a multi-tenant SaaS model in the following situations:
Although these ERP models are more advanced, some businesses still require on-premise ERP. Hence, choose it in these circumstances.
You also have the single-tenant SaaS ERP solution. It might work if you want more control over your data and tighter server security. A single-tenant model allows you to update and upgrade the software. It is dedicated and flexible. Choose this choice if:
We have already defined SaaS ERP. Next, on-premise ERP is software that runs from the company’s servers. When obtaining the software, the company pays a hefty licensing fee. Then, it must pay a maintenance fee every year. SaaS ERP and on-premise ERP try to create one unified database for everyone. However, they differ in the following ways:
If you want a more private SaaS version that works better than any on-premise ERP system, get a single-tenant ERP. The vendor will offer you a dedicated software instance that no other user can access. However, your business will not get the advantages of the multi-tenant SaaS we discussed earlier.
Who is turning to SaaS ERP these days? SaaS use cases vary based on several factors. These include the following:
Did you know that the global ERP software market will be worth 32.6 billion dollars in 2024? That will be an increase of 4.3 billion dollars from 2019. The same IDC report suggests there will be more cloud ERP deployments than on-premise ERP setups in 2024. This is good news for those interested in SaaS ERP.
It is a cheaper model suitable for companies looking to introduce ERP software or dump outdated legacy versions. SaaS ERP provides the fastest way to modernize and automate your business processes. It can help improve business efficiency, which can enhance customer satisfaction.
Besides, SaaS ERP allows businesses to add more helpful integrations, like BI, data analytics, and visualization tools. Above all, it enables the company to experience digitalization by allowing data sharing on any internet-enabled device.
Implementation of SaaS ERP is quicker and faster because a business does not have to set up servers or meet a high upfront cost. Also, it is easier to integrate various modules when the software is in the cloud. Data migration will be challenging, especially for large-scale businesses with confidential information. Steps include:
Top ERP software providers are striving to extend the capabilities of their cloud products. They are improving analytics, user interfaces, and automation of processes. Soon, everyone using the software will interpret and deduce meaning from ERP data without calling an IT staff for assistance.
Vendors are introducing modern technologies like Blockchain, the Internet of Things, and machine learning. In the future, they will find ways to integrate these technologies for better results. We expect future ERPs to use machine learning to automate small repetitive tasks and flag fraudulent activities.
The IoT will improve warehousing and logistics and relay data from different devices to the ERP. Above all, blockchain technology will improve data storage in ERP systems. It will also facilitate and automate business transactions between companies in one blockchain network.
In conclusion, SaaS ERP is a type of cloud-based ERP solution. It is delivered via the internet from a vendor’s data center and shared among multiple customers. SaaS ERP offers several benefits such as lower costs, automatic upgrades, advanced user interface, accessibility from anywhere, and access to emerging technologies like AI and IoT. However, it also has disadvantages such as lack of customization and potential for rising costs. The cost of SaaS ERP varies based on the required features and modules and is typically based on a per-user or tiered subscription fee system. Before choosing SaaS ERP, it is important to consider both its benefits and limitations and ensure it meets your specific business needs.