Lean & Operational Excellence and Independent ERP Consultants

One of the options to consider when developing an ERP strategy is Software as a Service or SaaS. Is SaaS a viable option?

Software as a Service (SaaS) can broadly be defined as a model where the provider licenses an application to customers for use as a service on demand. There are many variations of the SaaS model, but some of the pros and cons of a true SaaS solution are: 

PROS

• Upfront costs are reduced as licenses and servers are not bought, and fixed capital cost becomes a variable expense.
• There is less need for internal IT support.
• It can be used as a trial in a live environment before buying outright.
• The solution is largely pre-configured, so implementation is very fast.
• Financial commitment is low – you pay as you go.
• You only pay for what you use, as user numbers can be changed each month.
• Upgrades are forced, so you are always on the latest version.

 CONS

• After a certain period, renting is more expensive than buying.
• Payment is by named user and there is usually no distinction between “light” and “heavy” users.
• Customisation capabilities may not be as strong.
• You do not own an IT asset.
• Upgrades are forced and are therefore not within the control of the customer, which can be difficult to manage, especially in a regulated environment.
• The performance of some devices, such as Radio Frequency (RF) scanners can be negatively affected.
• There can be database limitations.
• Due to the licensing policy, providing your customers with access to your system can prove costly.

 
A SaaS ERP solution can suit some companies, in particular smaller or emerging businesses. The traditional “on site”, fully owned ERP system is no longer the only option when developing an ERP strategy. SaaS and other solutions such as hosted and managed services should also be considered.

This Opinion was written by Ursula Browne, Senior IS Consultant at BSM. If you would like further information on SAAS or any other aspects of ERP Strategy please send an e-mail to Ursula Browne.