SaaS ERP: The Agile Approach to Business Management
Enterprise Resource Planning (ERP): A Data-Driven Decision-Making Tool for Businesses
ERP software is a critical tool for businesses and data-based decision-making. It automates all repetitive business processes. Utilizing ERP makes sense for any company that needs to leverage technological advancements to work more efficiently, enhance customer satisfaction, and move away from outdated local software. SaaS ERP is a component of cloud ERP.
When cloud software products are implemented as multi-tenant systems, they are called software-as-a-service. Like other SaaS products, SaaS ERP is managed by the software vendor. It primarily uses a multi-tenant model, meaning the vendor’s customers share the same software and infrastructure.
This article comprehensively reviews SaaS ERP software, including its costs, implementation, advantages and disadvantages, and how it differs from on-premise ERP. Let’s dive into the discussion below!
SaaS ERP Costs
As the name suggests, SaaS ERP is a subscription service where the vendor charges its customers monthly or annually. The software budget is lower with SaaS ERP. Costs are more economical because there’s no need to purchase hardware to run the system, nor is there a need for a large IT team to maintain and secure the software or a data center to store data.
Many SaaS vendors charge per user, while others offer tiered pricing based on the company and the resources required. As the company grows, it will need more users and modules.
Another consideration is the speed of the software when in use so as not to encounter many obstacles in daily business operations.
SaaS ERP Implementation
Generally, SaaS ERP systems run faster than starting from scratch with on-premise software because there’s no need to prepare servers or configure computers and smartphones to access ERP.
Integrating complementary systems like CRM is much easier with cloud-based systems, especially if they come from the same vendor.
Data migration is one of the challenges, whether implementing a new SaaS system, switching between SaaS systems, or integrating on-premise software with cloud ERP. Unless your business is still small with few customer data and financial transactions, you can save time and effort by integrating different systems. If you plan to connect different systems, you can inquire about the available APIs in the vendor’s ERP system.
Advantages of SaaS ERP
There are several reasons why SaaS ERP is increasingly popular among many companies. This system offers the benefits of cloud ERP within it. Here are some advantages of SaaS ERP compared to on-premise ERP:
- Comprehensive functionality for core business functions such as accounting, inventory, sales, and customer management.
- Configuring servers or buying additional infrastructure is unnecessary as the business grows.
- The vendor automatically upgrades (usually several times a year) so that all users are updated with the latest features.
- Data security and user work privacy are guaranteed.
Disadvantages of SaaS ERP
No system is perfect; there are always drawbacks. Here are some disadvantages of the SaaS ERP system for some companies:
- ERP vendors may be unable to facilitate companies with strict regulatory and compliance standards or data and security requirements that are too specific.
- Some modifications are necessary to meet unique or specific business needs.
- Monthly subscription costs increase over time and will rise as the business grows. Data and users will also increase. These operational expenses can be predicted as long as the company can control them.
SaaS ERP vs. On-premise ERP
Although on-premise and SaaS ERP differ in many ways, they share the same goal: to create a single database integrated with all business information and processes.
Depending on the type of business, ERP can pull data related to accounting, human resources (HR), supply chain management, sales, e-commerce, marketing, and customer relationship management (CRM). Some or perhaps all of these functions are part of the SaaS system.
On-premise ERP is installed on the company’s servers. As a customer, your company typically pays a sizeable one-time license fee and annual software maintenance fees.
Conclusion
ERP is said to be software-as-a-service when cloud software products are implemented as multi-tenant systems within the same infrastructure system. The costs incurred are generally per month or year, depending on the number of users and the company size.
Some advantages of SaaS ERP include complete module functionality, no need for additional infrastructure, users receiving regular software updates, and data security is guaranteed. The disadvantages are that if your company has specific regulations and compliance, it may not be facilitated, modifications are needed if your business type is specific and unique, and subscription costs will increase as the business grows.
ERP systems require a significant investment, but if your business needs a comprehensive operations solution, MASERP accounting software is the best choice. With an SQL server database, MASERP is robust enough to handle millions of transactions without corruption.