Enterprise Resource Planning (ERP) software is now an important tool for any company that wants to run a tight ship, keeping every element of their business under control. As such, there has been a boom in the ERP software industry.
When you consider the best way to access a new ERP system, you will likely come to a choice between cloud-based ERP and SaaS ERP. At a glance, they may look very similar, but there are actually various key differences you need to understand.
What is SaaS ERP?
SaaS stands for Software as a Service, and it is a kind of service-based ERP solution. Hosted on the cloud, it typically operates on a multi-tenant SaaS architecture. It is a very popular model for deployment because the ERP provider sets up and manages the software.
In this model, you will not have to hire an internal IT team to handle installation, updates or maintenance. You simply pay a subscription fee to the provider and access the service via the internet. Employees can access and interact with the application with an online connection, and the interface can be used on any device in any location.
Considering how complex ERP implementations can be, SaaS ERP makes deployment a lot simpler. You still get access to outstanding value for your business, and you can have a relatively quick implementation to start tracking and managing your business operations to boost growth.
What is cloud ERP?
The cloud-based ERP option is similar to the SaaS deployment, but the differences are quite fundamental. The solution is hosted in the cloud and managed by your service provider, just like the SaaS model.
The differences start when you realise that a cloud ERP solution is highly customisable and flexible. When you choose cloud ERP, you have a system that can be tweaked and modified to suit your needs, adding and removing features at will. This is similar to on-premise ERP, except everything is outsourced, so your service provider will help with:
- Modifying system features.
- Fixing bugs.
- Installing updates.
- Conducting regular maintenance.
It all depends on the services you have paid for as part of your cloud ERP package.
In terms of cost versus function, you get access to all the latest and most advanced technologies simply by purchasing the software updates. For many, the cloud ERP system is seen as the most efficient solution to spearhead the software, offering the best of both worlds between SaaS ERP and on-premise ERP.
Comparing SaaS ERP vs Cloud ERP
To get a more comprehensive understanding of the benefits of these two types of systems, you need to compare and contrast the areas where they differ. Let’s look at some brief comparisons of these things.
SaaS and cloud ERP solutions don’t require an investment in new infrastructure. You simply choose from the features offered by the vendor and have your system implemented with no need to obtain new hardware and have it configured and installed. In this way, both the SaaS and cloud-based models make deployment swift and relatively simple, particularly in comparison to on-premise solutions.
SaaS cloud solutions have very little in the way of customisation options. Instead, they offer a range of ready-made solutions that include features and applications suited to specific industries and purposes. If one of these is a good fit for your business, it can be a great solution, though it is unlikely that any one package will be ideal for your needs.
With cloud-based ERP software, you have access to a certain degree of customisation. It may not be as extensive as the customisation available for on-premise solutions, but it is far simpler to execute. Essentially, the system comes with a set of features, and the service provider offers customisation options up to a certain point, enabling you to tweak the system to meet your needs better.
Total Cost of Ownership (TCO)
SaaS and cloud ERP systems generally have far lower costs associated with them than more traditional on-premise ERP systems. Essentially, you pay a subscription fee to the SaaS or cloud vendor, in exchange for which you get hosting, servers, implementation, software updates and ongoing maintenance. This means the process of setting up your system is streamlined and significantly less expensive.
Moreover, with your subscription fee covering so many things, the ongoing costs are lower. You don’t have to pay for maintaining your own hardware, or to hire a team that manages the system. Your monthly payments will remain consistent, so it is far easier to plan for the long-term with these models.
Both SaaS and cloud ERP systems offer safe, secure data storage options. Work with a reputable vendor and they will be required to follow strict security protocols, including things like data backup and disaster recovery. Having these things in place helps protect against data breaches.
If there is a software malfunction, you won’t suffer significant data losses because of the robust data backup measures in place. This kind of peace of mind is important for many businesses, and it is far more challenging to establish such reliable data backup systems in-house.
Integration and Scalability
SaaS and cloud ERP systems offer a high degree of flexibility to support the growth of your business operations. As you employ more people, you can add more users to your subscription to enable full access to the systems. And, as your software or capacity needs evolve, you can add and remove applications to your package in order to transition to new business models or scale up your operations.
Privacy and Control
SaaS ERP providers rent out their applications for your use. The management of the system is entirely in their hands, and they retain complete control of the core program. In cloud systems, the data is stored on a third-party cloud server. This means ownership and accessibility is shared, which is why you get a greater degree of customisation.
Choosing Between SaaS and Cloud ERP
As you can see, the primary difference between SaaS and cloud ERP systems is the level of customisation you get. Both offer very similar advantages in terms of costs, ongoing maintenance, security and scalability. But you get more access to customisation when you choose the cloud model over the SaaS one.
At the end of the day, ERP software are all-inclusive systems that offer a range of sophisticated features to meet your business needs. When you choose the appropriate system for you, the benefits can be extensive. So it is important to take your time to make the right decision and enlist expert support if you are uncertain about anything.
Why Choose Eventura as your ERP Implementation Partner?
Eventura has been providing robust business solutions to countless organisations for over two decades. We are ERP experts and can identify all of your business needs, including issues surrounding supply chain, and deliver a comprehensive ERP solution that works for you.
As Sage 200 Partners and NetSuite Solution Providers, we can help you identify which solution will fit your business needs the best. Our expert team of business analysts, developers, consultants, technicians and support staff can guide you through your entire project, from initial scoping through to implementation and on-going support.
We’re also managed IT service providers meaning we can help you identify your entire IT infrastructure requirements from day one. If you would like to speak to one of our ERP experts to discuss your options or request a free demo, you can request a free call back here.