The 3Cs of SaaS ERP: Cost, Customization, Control
Traditionally, companies have had to buy, build, and maintain their IT infrastructure in an expensive and complicated process. SaaS ERP provides businesses with an alternative where they can subscribe to services on a shared infrastructure via the Internet. Given the many advantages of the SaaS model over on-premise, businesses of all types and sizes are flocking to the cloud. The main reasons for the popularity of SaaS ERP, according to a study by ERP analytics firm Mint Jutras, have much to do with the three “Cs” – cost, customization, and control.
Costs are reduced in various ways when using SaaS ERP instead of on-premise software. The first is through lower IT overhead, as much of the spending required for implementing conventional enterprise software (purchasing and maintaining software, servers, their secure location, installation, maintenance, patching and service contracts) is eliminated. In fact, Phil Wainewright, analyst with Summit Strategies, calculates the cost of traditional enterprise software implementation to be 4-to-5 times the cost of the original license.
SaaS provides consumers with a pay-as-you-go service through monthly or annual subscription costs, a feature not usually offered with on-premise software. These pre-defined charges become predictable IT spend and incorporate into a company’s yearly budget. In some cases, businesses are able to cancel their subscriptions at any time. Moreover, many SaaS ERP services are based around per-user per-month charges and sometimes metered usage, so companies only pay for what they use; accounts can be added or removed at any time to suit the changing needs of the organization.
SaaS ERP hosting provides customers with software updates and upgrades installed automatically or on request as soon as they become available. The SaaS cloud is easy to customize without the need to add hardware, software, or bandwidth even as a company’s user or usage base grows.
The majority of modern ERP hosting solutions offer configuration options that allow users to think they are customizing the application when really they are not affecting the code or preventing future software upgrades. This is often beneficial as it gives clients a sense that they are personalizing their SaaS environment without losing out on any new, innovative features.
Customers who do need to edit code should seek out vendors offering solutions that support customization. Typically, these will be offered under a single-tenant environment but can also be found in multi-tenant environments, where changes can be hidden or made optional for other customers.
Control and security must be a major concern for businesses regardless of the deployment method they choose. On-premise implementation is mistakenly considered to be more secure than SaaS ERP cloud hosting by many consumers when, in fact, small companies who lack an in-house IT security expert are more at risk of systems being compromised than their SaaS counterparts in the cloud. The vast majority of espionage is actually done internally, not externally.
Understanding the importance of data security to businesses, SaaS ERP hosting providers rely on high-tech data centers to offer uninterrupted and reliable service. Aspects of any SaaS infrastructure that should be considered mandatory include skilled resources, network redundancies, stand-by power, up to date security, intrusion prevention and high performing servers, just to name a few.
Other advantages of SaaS ERP
There are various other advantages to SaaS ERP that have increased its popularity over on-premise implementation. Though not considered as significant to many customers, they have doubtless helped shape the rise of SaaS ERP hosting:
As the software is already running when delivered, implementation tasks that would be encountered with on-premise licensed software are eliminated. This decreased deployment saves companies huge amounts of time and money.
The SaaS environment makes it easy for ERP cloud hosting providers to monitor how customers are using various applications and can use these metrics to improve usability, performance, and functionality.
The burden of maintenance is taken away from the IT staff, allowing them to focus on the software which produces the ROI on investment. With SaaS, there is no need to manage upgrades or troubleshoot problems.
In the end, the three Cs of cost, customization, and control are making SaaS ERP the preferred technology solution for many businesses.