Exploring the rise of SaaS ERP

Software as a Service has been rapidly rising in popularity. Unlike traditional ERP, which requires a purchase of a software license, the SaaS model allows for ERP to be rented for a set time, usually as a cloud-based system. SaaS first gained market share by providing a cost-effective option for smaller organizations, but the solution is now steadily being adopted by mid-to-large size organizations.

In late 2011, Aberdeen Group found that companies willing to consider an ERP SaaS solution grew to 52 percent of those surveyed, while those willing to consider a hosted ERP solution dropped slightly to 65 percent, with some companies responding they would consider either solution. The appeal of the SaaS model is based on cost savings and faster implementation time, but the system is not also without its drawbacks.

Using SaaS ERP typically knocks up to seven months off the implementation time, with the completion of SaaS projects taking just under a year on average. Typically, traditional ERP solutions take up to 18 months to install on an on-premise server. With SaaS ERP, hardware and maintenance expenses are replaced with a subscription cost. 

Although SaaS has a lower up-front cost and more rapid implementation time, it is not the ideal solution for every organization. On-premise ERP solutions are often more appropriate for more complex organizations with unique operations. Ultimately, the decision on which ERP strategy to explore comes down to an analysis of your organizations needs. Many larger organizations may find SaaS solutions are beneficial for branch offices or to add functionality to their existing systems, but a full-scale switch to SaaS ERP could come with unacceptable sacrifices of control, security and functionality.  Strategic business consulting can help to determine which options are right for your organization. 

Specialized, dependable ERP resources can be difficult to find just when you need them most.  Sometimes, even large-scale initiatives require a short-term expert. Seeking strategic staffing services can be a great way to contain project costs while gaining access to top talent.