Understanding SaaS vs Cloud ERP
Nowadays, businesses of all sizes consider ERP systems as an essential tool. And with the rise of cloud computing, Software as a Service (SaaS) ERP has emerged as a popular deployment option.
In this article we cover
But what exactly is SaaS enterprise resource planning software, and how does it differ from a cloud ERP solution?
This guide will help you demystify SaaS ERP and explore its unique benefits. From affordability and flexibility to seamless upgrades and easy maintenance, SaaS ERP has much to offer businesses looking to improve their operations.
Want to modernize your business processes and improve efficiency? SaaS ERP may be the answer. Let’s explore together.
What is SaaS Enterprise Resource Planning?
In the Enterprise Resource Planning (ERP) market, the software as a Service (SaaS) model has quickly gained popularity.
As the name suggests, SaaS ERP is a cloud-based ERP solution delivered over the Internet as a service. Instead of purchasing and installing software on-premise, users access the system through a web browser. This means that the software is hosted and maintained by the vendor, who takes care of software upgrades, security, and backups, among other things.
Benefits of using a SaaS ERP system
There are several benefits of using a SaaS ERP system, including:
- Lower upfront costs - The initial cost is significantly lower since users do not have to purchase and install the software. This makes it more accessible to small and mid-sized businesses. (see our ERP Pricing Guide for more on this topic)
- Faster implementation — Implementing a SaaS ERP system is much quicker than implementing a traditional on-premise ERP system. Since the software is already installed and configured, users can use it immediately.
- Automatic updates - SaaS ERP systems are automatically updated by the vendor, which means that users always have access to the latest version of the software.
- Scalability - SaaS ERP software can easily be scaled up or down depending on the needs of the business. This makes it a flexible solution for businesses that experience fluctuations in demand.
- Accessibility — Since SaaS ERP systems are delivered over the Internet, they can be accessed from anywhere with an Internet connection. This makes it easier for remote workers and teams to collaborate.
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Comparing SaaS ERP to traditional ERP systems
In contrast, traditional ERP systems are installed on-premise, meaning users must purchase and install the software on their servers. This can be a costly and time-consuming process.
In addition, traditional ERP systems require IT personnel to maintain and update the software, which can burden small and mid-sized businesses.
SaaS ERP systems offer several advantages over traditional ERP systems, including lower upfront costs, faster implementation, automatic updates, scalability, and accessibility. Businesses seeking to simplify their processes and lower expenses find this to be an appealing choice.
SaaS ERP vs. Cloud ERP
There still needs to be more clarity over cloud ERP and SaaS delivery models. The more discussion I see, the cloudier the issue becomes. Many use “cloud” and “SaaS” interchangeably, but they are different. The distinction is quite simple and need not be over-complicated:
- The cloud refers to access to computing, software, and storage of data over a network (generally the Internet.) You may have purchased a license for the software and installed it on your own computers or those owned and managed by another company. Still, your access is through the Internet and, therefore, through the“cloud,” whether private or public.
- SaaS is exactly what is implied by what the acronym stands for, Software as a Service. Software is delivered only as a service. It is not provided as files to be installed on your own (or another’s) computer. It is accessed over the Internet and is generally paid for on a subscription basis. It does not reside on your computers at all.
Using these definitions, we can confidently say all SaaS is cloud computing, but not all cloud computing is SaaS.
What About Hosted ERP Solutions
Vendors sometimes use the term SaaS to describe hosted deployment models. Still, it’s important to note that not all hosted models are SaaS.
If a vendor’s partner holds a software license, hosts it in their data center, and offers it to you as SaaS, then it is considered a SaaS environment. However, if you license the software and have the ERP vendor or another party host it for you, it is not SaaS. In the past, this was called Application Managed Services (AMS).
This distinction is important because whoever owns the license to the software takes on an added level of responsibility.
For many years of researching preferences for ERP deployment options, I have carefully distinguished between SaaS and hosting. Of course, I can’t guarantee my survey participants read the definitions carefully, but I can try! Here are the options to choose from:
- Software as a Service (SaaS): Software is delivered only as a service. It is not delivered or downloaded as a software package to be installed on your computers.
- Hosted and managed by your ERP vendor: Software is licensed by you, but you pay your ERP vendor to manage and maintain (host) hardware and software.
- Hosted by an independent 3rd party: Software is licensed by you, but you pay another party to manage and maintain (host) hardware and software.
- Traditional licensed on-premises: You license the software and are responsible for managing and maintaining it on your own premises
- Hybrid: Some parts are licensed and maintained on-premises, while others, like add-on modules, are provided as SaaS.
Nowadays, many ERP software vendors promote their cloud services, and some of the most prominent vendors claim to be the best in the market. However, many business users blindly follow this trend without fully understanding its consequences. As a result, they may miss out on some benefits and make uninformed decisions.
Many solutions that were once only available as traditional, licensed deployments (on your own computer or a trusted service provider’s) now offer a choice. But some of these“cloud” choices are hosted solutions, contributing to the confusion.
Other solutions that were born in the cloud may only be offered through SaaS. It is essential to understand the difference between cloud and SaaS and the different flavors” of SaaS (multi-tenant and multi-instance or single-tenant SaaS ERP).
Finding the Best SaaS ERP Systems
Now that you better understand what Cloud and SaaS ERP systems are and their benefits, you may wonder how to find the best one for your business. Here are some key factors to consider when choosing a SaaS ERP solution:
Scalability: Make sure the system can grow with your business and adapt to changing needs. Look for a system that offers users, modules, and features flexibility.
Integration: A SaaS ERP system should be able to integrate with your existing software applications and tools, such as your CRM or marketing automation software.
Cost: Look for a system that fits your budget and offers a transparent pricing model. Some vendors may charge based on the number of users or transactions, so understand the pricing structure before deciding.
Support and training: Consider the vendor’s level of support and training. Will they provide ongoing support and training to help you get the most out of the system?
Security: Look for a system with robust security measures to protect your data and comply with industry regulations.
Once you understand the factors to consider, it’s time to start researching and comparing SaaS ERP systems. Some of the best SaaS ERP software on the market include:
- Epicor Kinetic: Epicor Kinetic is an ERP system designed specifically for manufacturing. It offers industry-specific features and a user-friendly interface that simplifies system navigation. Additionally, the software offers flexible deployment options and mobile access through a dedicated app. This system is an excellent option for mid-sized manufacturing companies looking for a powerful and scalable solution that can grow with their business.
- Oracle Netsuite: NetSuite is a comprehensive and flexible cloud-based ERP system perfect for small and mid-sized companies in various industries. Its scalability, real-time visibility, customization options, built-in CRM module, supply chain management, and global capabilities make it the top-selling cloud ERP system. With NetSuite, businesses can focus on growing and expanding without worrying about outgrowing their system.
- Acumatica ERP: Acumatica ERP, a cloud ERP software solution introduced in 2008, is highly flexible and designed for mid-sized businesses in various industries, including distribution. Its adaptability and modular structure allow for easy addition or removal of features. With real-time financial management dashboards and reporting, companies can gain comprehensive insights and make data-driven decisions. Acumatica ERP also provides personalization through configurable workflows, industry-specific solutions, and mobile access through its app. With integrations with other business applications, including CRM and eCommerce, Acumatica ERP is a customizable and flexible solution that helps businesses focus on growth and operational efficiency.
- INFOR CloudSuite: INFOR CloudSuite is a top industry-focused cloud solution that offers tailor-made solutions for various manufacturing industries. Its user-friendly interface simplifies day-to-day operations, and the system is easily extensible, providing a cohesive ecosystem. With powerful analytics and reporting capabilities, INFOR CloudSuite helps businesses make informed decisions and improve performance. The system also supports multiple languages, financial management in multiple currencies, and regulatory requirements, making it an excellent choice for global organizations seeking a cloud-based ERP solution.
- Microsoft Dynamics 365 Business Central: Dynamics 365 Business Central is a cloud-based ERP platform suitable for small to mid-sized businesses. It offers seamless integration with other Microsoft applications, comprehensive functionality, financial management, scalability, intelligent insights, and customization options. If you’re looking for a cloud-based ERP solution that integrates with other Microsoft tools and provides all the necessary functionality for your business, Dynamics 365 Business Central is a great option.
These are just a few of the top SaaS ERP vendor systems on the market. When choosing a system, carefully evaluate each option based on your needs and goals.
Make sure the SaaS/Cloud solutions you are evaluating offer core ERP functionality such as financial management, supply chain management, human resources, inventory management, and support for other critical business functions.
To simplify your search, you can use our Best Fit comparison tool to compare the market’s best Cloud/SaaS ERP systems, features, and pricing.
Related Content: ERP Pricing Guide: Understanding the Cost of ERP Software
Implementation and Integration of SaaS ERP
Implementing and integrating a new ERP system can be complex and challenging, whether traditional on-premises or SaaS-based. However, SaaS ERP implementation and integration can come with some unique challenges that businesses should be aware of.
Challenges of Implementing and Integrating SaaS ERP
One of the main challenges of implementing and integrating a SaaS ERP system is the potential for data security risks. As SaaS ERP systems are hosted by a third-party provider, businesses must keep their business data secure and confidential throughout the implementation and integration process. Integrating SaaS ERP solutions with existing systems can be difficult, as data may need to be migrated from legacy systems to the new SaaS platform.
Tips for a Successful Implementation and Integration Process
To ensure a successful implementation and integration process, businesses should consider the following tips:
- Develop a clear implementation plan: A clear plan outlining timelines, milestones, and responsibilities can help ensure the implementation and integration process runs smoothly.
- Ensure data accuracy: Accurate and clean data is essential for the success of any ERP software implementation. Before migrating data to the new ERP system, businesses should ensure that data is clean and error-free.
- Invest in training and support: SaaS ERP software can be complex and require training and support for users to ensure that they can use the system effectively. Investing in training and support ensures that users can navigate the system and perform their job functions effectively.
- Test the system thoroughly: Before going live with a new SaaS ERP system, businesses should conduct thorough testing to ensure that the system works as intended and that data is accurate and accessible.
Importance of Training and Support for SaaS ERP Users
Training and support are critical for SaaS enterprise resource planning software users to effectively use the system and achieve the desired business outcomes. Users must be trained on the system’s functionality and features and provided with ongoing support to address any questions or issues that may arise.
Furthermore, businesses should ensure that the SaaS ERP provider offers reliable customer support, including help desk services, software updates, and bug fixes, to ensure that users are supported throughout their system use.
In conclusion, implementing and integrating a SaaS ERP system comes with challenges. Still, with proper planning, testing, training, and support, businesses can successfully transition to a new system and reap the benefits of improved efficiency, cost savings, and scalability.
Continuing your SaaS ERP Software Journey
We have explored the world of SaaS ERP and cloud ERP solutions, discussing their definitions, benefits, and drawbacks. We have also examined how to find the best SaaS ERP system for your business and the challenges and best practices of implementation and integration.
To recap, SaaS ERP can offer greater scalability, flexibility, and cost-effectiveness than traditional ERP systems.
To help you find the best ERP system for your business, we encourage you to use our Best Fit ERP comparison tool, which matches the best ERP systems from the top ERP vendors to your needs and goals.
Please contact us if you need further assistance or have questions about ERP systems. Our team of experts is always here to help you make the best decisions for your business.
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