What is Enterprise Resource Planning (ERP) as a Service (SaaS)?
SaaS ERP is an enterprise resource planning (ERP) system that runs in the ERP vendor’s data centre rather than on the purchasing organization’s servers and infrastructure (also known as on-premises ERP), allowing end-users to access the programme through the internet.
That call is answered by enterprise resource planning software supplied as a service.
The software vendor manages SaaS ERP software, which is hosted in the cloud.
When compared to on-premises ERP, it can lower IT costs and overhead while ensuring that all users are using the most up-to-date software.
Though the phrases are sometimes used interchangeably, SaaS ERP is a subset of cloud ERP.
Software-as-a-service refers to cloud software solutions that are deployed as a multi-tenant system.
The software supplier manages SaaS ERP, just like other SaaS solutions.
It generally employs the multi-tenant paradigm, which entails that all of a vendor’s clients share a single instance of software and share the same infrastructure.
Leaders from finance and IT, as well as sales and HR, should sit down and undertake an analysis when selecting which model is ideal for your business.
Many firms rely on enterprise resource planning (ERP) systems to assist them manage their accounting, procurement processes, projects, and other aspects of their operations.
ERP systems have traditionally meant massive, expensive, and time-consuming implementations for many IT teams, which may have necessitated considerable hardware or infrastructure investments.
The introduction of cloud computing and software-as-a-service (SaaS) installations has ushered in a shift in how businesses see ERP. Businesses may simplify their technological requirements and achieve a faster return on their investment by moving ERP to the cloud.
Cloud ERP solutions are mature products with all of the same features and capabilities as their on-premises counterparts.
Furthermore, the cloud deployment paradigm makes it simple to integrate other important technologies like mobility, decision support systems, and collaboration and social networks.
Cloud services are becoming increasingly popular among major firms that desire modern apps without the costs of IT infrastructure, maintenance, and upgrades.
You can use integrated suites and cloud platforms with industry-leading high performance and scalability, unrivalled reliability, and better security to assure the success of your SaaS ERP system.
Instead of purchasing hardware or licencing software, Software as a Service (SaaS) allows customers to subscribe to and use application software on the cloud.
You simply pay a monthly membership fee to a cloud provider for this software, and the service is provided to you through the internet.
A contemporary cloud suite delivers comprehensive software for your entire company, allowing you to subscribe to specific SaaS applications for finance, supply chain, human resources, customer experience, sales, and marketing.
ERP Deployment Models: There are two main ERP deployment models
ERP software that is hosted on private servers and maintained by dedicated IT professionals is known as on-premises ERP. The fastest increasing deployment type is cloud ERP, which includes SaaS.
On-Premises ERP vs SaaS ERP
Despite the fact that on-premises and SaaS ERP are very different in many ways, they both have the same goal: Create a single, consistent database that contains all of the company’s data and procedures.
An ERP could gather data from accounting, human resources (HCM), supply chain management (SCM), engineering, ecommerce, sales and marketing, and customer relationship management apps, depending on the organisation (CRM).
Alternatively, some or all of these features could be included in the SaaS ERP system.
ERP software that is deployed on a company’s own servers is known as on-premises ERP.
Instead of a continuous subscription bill, customers usually pay a hefty one-time licencing fee plus yearly maintenance fees at the time of purchase.
The company is in charge of managing the underlying infrastructure as well as setting and updating the software, which may include paying the vendor or a third party for setup and maintenance services.
The software vendor hosts and manages a SaaS ERP solution, on the other hand.
Some businesses combine cloud and on-premises ERP features.
Custom integrations are required for these hybrid ERP solutions, which might be complicated. Hosted ERP is a single instance of on-premises software that operates on remote servers owned by a third-party vendor and located in a third-party data centre; the client is responsible for upgrades and most other aspects of the software.
While a hosted ERP instance is housed on a private cloud, SaaS is hosted on a public cloud.
A single-tenant option is available from several SaaS ERP companies, which gives a client their own dedicated instance of the software. Businesses now have more discretion over whether and when to upgrade, as well as how to handle security and infrastructure.
What can you expect from a modern SaaS ERP solution?
Modern SaaS ERP systems make advantage of innovative technology to automate operations and increase productivity where and when it counts, especially in uncertain times.
Oracle and Enterprise Strategy Group (ESG) collaborated to conduct a 2020 worldwide survey (PDF) of 700 finance and operations managers and executives to gain insight into how cloud-driven innovation is affecting corporate operations.
According to the research, “91 percent of all respondents believe SaaS is an enabler of new technology adoption inside finance and operational applications.” These technologies include:
Intelligent organisations employ artificial intelligence (AI) prebuilt into their current SaaS ERP solutions to automate operations, boost innovation, and make better decisions.
“Incorporating AI into ERP systems can result in a 36% reduction in errors and a 3.5-day reduction in the time it takes to close the books,” according to the ESG report.
Find out more about artificial intelligence solutions.
Personal digital assistants
Chat bots and other digital assistants make it simple for ERP to engage with a variety of other systems, enhancing employee productivity by directing customer and employee support tasks, offering rapid responses, delivering faster analysis, and making intelligent recommendations.
According to the ESG survey results, “companies using chatbots experienced an average 36 percent productivity improvement, 38 percent faster analysis, and 65 percent of respondents indicated conversational technologies are improving forecasting and reporting processes.”
Find out more about Blockchain products.
Learn more about Oracle SaaS ERP apps’ AI, digital assistants, IoT, and blockchain technologies.
Cost of SaaS ERP
SaaS ERP is a subscription service, as the name implies, and providers bill customers on a monthly or annual basis.
With SaaS ERP, technology costs are reduced.
Aside from the savings realised by not purchasing hardware to run a private instance of the system, a company does not require a large IT team to maintain and secure the software, nor does it require a data centre to host it.
Many SaaS ERP vendors charge per user, while others have tiered pricing based on the size of the company and the resources required.
In either case, the cost of use will typically rise as a company grows or adds more modules.
According to analysts, the SaaS versus on-premises TCO trendlines will cross in three to five years, but this is highly variable.
There are several online total cost of ownership calculators that can provide you with a fairly accurate estimate.
Another important factor to consider is the speed with which it can be used.
SaaS ERP Implementation
In general, a SaaS ERP system can be up and running faster than starting from scratch with on-premises software.
There is a shorter implementation checklist, owing to the fact that there are no servers to install or computers and smartphones to configure in order to access the ERP.
Furthermore, integrating complementary systems, such as CRM, is much easier if those solutions are cloud-based, and even easier if they are from the same provider.
Regardless of how you slice it, data migration will be difficult.
This is true whether you’re implementing a new SaaS ERP system, migrating between SaaS systems, or integrating on-premises software with cloud ERP.
Expect to invest time and effort unless you’re a startup with the little customer and financial data. Inquire about available APIs if you intend to connect disparate systems.
Advantages of SaaS ERP
There’s a reason why SaaS ERP has grown in popularity—it provides all of the advantages of cloud ERP discussed above, plus more.
The following are some of the benefits of SaaS ERP over on-premises or single-tenant cloud ERP:
Accounting, inventory, orders, and customer records management are examples of out-of-the-box functionality.
There is no need to configure servers or invest in additional infrastructure as the company expands.
The vendor will perform automatic upgrades (typically multiple times per year) to keep all users up to date on the latest features.
An interface that is more modern and user-friendly.
A security and performance model that ensures a positive user experience while also protecting privacy.
Disadvantages of SaaS ERP
There are limitations to SaaS ERP when compared to on-premises or single-tenant cloud ERP that may be disadvantageous for some businesses, such as:
Data security is handled by vendors, which may not meet the needs of some organizations, particularly those with stringent regulatory or compliance standards.
There is less room for customization to meet specific business requirements.
Monthly subscription costs accumulate over time and will rise as the company expands and adds more data and seats.
On the plus side, as long as the company has a process in place to control usage, these costs are opex (operating expenses) and predictable.
The Cloud’s Role in ERP
Cloud computing has grown in popularity over the last two decades as a result of its advantages over on-premises IT, which include:
Users have more flexibility because they can log in from any device with an internet connection.
There are no servers or other equipment to buy, so there are no upfront costs.
Elasticity means that a company only uses the resources that it requires at any given time.
Implementations that are faster and simpler.
Easier information sharing with internal and external parties.
ERP as a Service and Digital Transformations.
ERP is fundamental business software that is required for data-driven decision-making and process automation.
Because ERP software is the central source of information for the entire organization, it is frequently the first system that corporations look to upgrade.
Going with SaaS ERP makes sense for any company that wants to capitalise on technological advancements, become more efficient, improve the customer experience, and retire homegrown or outdated on-premises systems.
IDC released a report in June predicting that the global ERP software market will reach $32.6 billion in 2024, up from $28.3 billion in 2019.
That’s a respectable CAGR of 2.9 percent. What’s more interesting for companies interested in ERP is that IDC expects cloud deployments to close the gap with on-premises deployments.
Growing at a 16.2 percent compound annual growth rate (CAGR) from 73.6 percent on-premises versus 26.4 percent cloud in 2019 to 51.6 percent versus 48.4 percent in 2024, thanks in part to the emergence of “Any size business ERP solutions” that may help small firms.
Because all customers are always on the most recent version, a SaaS ERP system allows businesses to stay on the cutting edge and on par with competitors.
It also allows for integration with a wide range of other cloud solutions, not just core systems like CRM and HRMS, but also data analytics and visualization tools.
This is where cloud computing truly shines: it centralizes all of these insights, allowing everyone to access the most up-to-date information from any connected computer, smartphone, or tablet.
ERP as a Service (SaaS) has a bright future ahead of it
The capabilities of cloud ERP solutions are being expanded by leading ERP suppliers.
Process automation, enhanced analytics, and increasingly user-friendly interfaces that enable “self-service” insights are all part of these efforts.
It’s a triumph when a finance professional can see trends rapidly without the use of IT.
Providers are aiming to integrate emerging technologies like machine learning, IoT, and blockchain in the future.
Machine learning software, for example, learns and improves over time. Machine learning allows businesses to automate many manual, repetitive reconciliation and reporting procedures, saving both time and money.
This system can help forecast future demand fluctuations and identify potentially fraudulent transactions.
IoT refers to a wide range of linked devices, such as sensors, scanners, and cameras, that can provide data back to the ERP system.
For example, IoT devices could track the status of a machine or show the whereabouts of a truck bringing a replenishment order.
When supply chain leaders have access to this data in near real-time, they get a more complete picture of current operations.
Blockchain can securely store the massive amounts of data that ERPs accumulate over time, as well as a comprehensive history of each transaction.
A blockchain network can also provide crucial transparency to business transactions.
If a component supplier, manufacturer, and distributor all join a blockchain network, each participant can follow the movement of a part or product and view the ownership chain.
Blockchain also allows for automation, such as triggering a shipping when an order is received or creating an invoice once products leave the warehouse.
These and other technologies’ potential benefits are a major reason why more firms are turning to SaaS ERP—and why cloud ERP will play a critical role in the future of business.
ERP as a service (SaaS)
The Simple, Cost-Effective, and Effective Way to Manage Your Business
Unlike typical on-premises ERP software purchases, the SaaS ERP approach permits software to be leased and hosted on a provider’s secure infrastructure.
The SaaS software approach has a cheaper total cost of ownership, as well as other advantages including faster implementation, less IT support, and more predictable costs.
You don’t need the problems and tradeoffs associated with ERP if your company wants integrated software to manage and automate back-office tasks.
New-generation SaaS ERP systems combine the power and sophistication of enterprise-class financial management with the convenience and cost-effectiveness of cloud computing.
You get the best of both worlds with Sage Intacct SaaS ERP software.
ERP capability that is best in class—
Sage Intacct starts with a multi-dimensional general ledger and provides all of the necessary features, including accounts payable, accounts receivable, order management, and purchasing.
Sage Intacct’s analysis, reports, and dashboards provide you with complete analytics at all times.
Modules that are optional—
Add in revenue recognition, sales tax, subscription billing, project accounting, and time/expense management, and you’ve got yourself a recipe for disaster.
Integration with other systems and data is simple—
Don’t bother with the monolithic suites. Using pre-built configurators, Sage Intacct SaaS ERP makes it simple to connect your financials with Salesforce and other systems.
The infrastructure of international standing—
Your monthly subscription includes automatic quarterly upgrades, catastrophe recovery, comprehensive security, and more.
A greater return on investment—Easy per-user subscriptions without the hardware expenditures and IT investments result in a cheaper total cost of ownership.
The Advantages and Uses of a SaaS ERP System
Using a SaaS ERP system has a number of advantages, including fewer upfront costs, quicker setup and management, real-time reporting, and business intelligence.
ERPs give executives additional visibility into various business operations and are a crucial tool in the decision-making process. The goal of SaaS ERP systems is to break down departmental barriers and increase efficiency and productivity.
Modern ERPs can help firms gain a competitive edge by enhancing employee performance, increasing consumer engagement, and identifying new business prospects.
ERP system providers have been incorporating new capabilities such as AI and machine learning into their systems. The following are some of the primary advantages of using a SaaS ERP:
- 360° Business Perspective
- Process monitoring and production in real time
- Standardization of business processes
- enhanced product quality
- Reduced lead times
- Design changes and schedule adjustments can be made more quickly.
- Intelligence in business and manufacturing Mobility
- Mergers and acquisitions have been simplified.
- Adoption rates have increased.
- User encounters that are intuitive
- increased productivity and performance
- Process simplification
- For all departments that are linked, there is a single source of truth.
- Highly scalable and adaptable
- Allow businesses to grow on a global scale.
- Compliance with regulatory and financial requirements has been improved.
- Core business operations automation
- Improved employee and customer satisfaction
- Integration with other systems is seamless.
- Forecasting with precision
- Individualized reporting
Top Best ERP Software as a Service (SaaS)
Oracle Net Suite and Oracle ERP Cloud are two Oracle products.
(https://www.netsuite.com/portal/in/home.shtml)
Odoo (https://www.odoo.com/)
SAP S/4 HANA Cloud ERP is a cloud-based ERP system from SAP. (https://www.sap.com/)
X3 Sage (https://www.sage.com/en-us/sage-business-cloud/sage-x3/)
Microsoft Dynamics 365 is a version of Microsoft Dynamics that is hosted in the cloud.
(https://dynamics.microsoft.com/en-us/)
Salesforce is a software platform that allows you (Force.com) (https://www.salesforce.com/)
Workday (https://www.workday.com/)
Acumatica Cloud ERP (https://www.acumatica.com/)
Epicor ERP (https://www.epicor.com/)
Conclusion
The above article is all about What is Enterprise Resource Planning (ERP) as a Service (SaaS)?, its deployment models, Cost of SaaS ERP, SaaS ERP implementation Advantages and disAdvantages and Cloud’s Role in ERP.
Note: The information in this article is based solely on information found on the internet and does not come from any private sources.