Some Key Considerations for SaaS ERP

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In yesterday's post about enterprise app stores for ERP, I noted that companies offering software-as-a-service ERP have been among the first to embrace the app store model. I also shared Forrester Research's prediction that SaaS ERP will experience annual growth of 21 percent through 2015. SaaS also appears to be a good fit for companies considering two-tier ERP , an emerging deployment model that seems to be gaining traction.


So it seems as if SaaS is making definite inroads into ERP. Still, it won't be for everyone. As I wrote a few weeks ago, there are three big sticking points when it comes to SaaS ERP adoption. These big three - cost, customization and security - are the same ones often encountered with any SaaS deployment. Yet they are even more relevant for ERP, considering how core it is to most companies and how much money many companies have already invested into their existing ERP systems.


Cost and customization both factor into the short list of reasons companies should consider SaaS ERP, offered by Skyline Consulting's Martin Browne as part of a larger discussion. They are:

  • Out-of-control costs to maintain the current system. You spend more on regular maintenance of hardware, operating systems and databases than a SaaS solution would cost.
  • Update hassles. New releases are becoming more difficult and/or costly to install.
  • Customization headaches. Managing custom applications is driving up complexity and cost.
  • Already using SaaS. You already have moved some applications and parts of business databases into the cloud.


The bulk of Browne's post on SandHill.com is devoted to some important considerations for companies considering SaaS ERP. He astutely points out companies should consider the cloud development platform underlying a SaaS solution, noting a good platform-as-a-service (PaaS) will support application design and development, bug and enhancement tracking, database support, security, versioning and customization.


He drills down further into several specific topics, including upgrades and implementation complexity. I particularly appreciate his comments on implementation, as he stresses it's not going to be the kind of walk-in-the-park some SaaS vendors will make it out to be.


Browne does a great job of addressing technical issues. As tricky as the technical issues can be, though, I think downplaying the importance of people and processes can cause far greater problems with SaaS implementations, a point I made in an earlier post about CRM. (I think the same general points apply to ERP. In fact, I think they are even more critical, again considering the core nature of ERP.)

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Add Comment      Leave a comment on this blog post
Oct 24, 2011 11:24 AM Dacey Dacey  says:

The SaaS solution gives users portals, which allow your customers and partners to collaborate with you and improves customer satisfaction and sales. As you compare ERP solutions for small businesses, you'll find that Netsuite's ERP software gives you comprehensive management of accounting, reporting, budgeting, and other financial responsibilities.


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