Customizing ERP on SaaS – Part II

November 2, 2009
By djohnson

In a previous post we proposed criteria to define criteria for easy to customize ERP systems. We innocuously declared that 0% of multi-tenant SaaS solutions would meet these criteria. After hearing from several folks, we decided that more clarification is required.

Savings with SaaS

The fact that multi-tenant SaaS solutions are not 100% customizable is a good thing. SaaS solutions realize economies of scale by bundling users with similar needs on a common infrastructure or platform. The multi-tenant SaaS platform is highly tuned based on similar needs and requirements to create shared savings on hardware and IT management.

Advancement in software and cloud computing has created multi-tenant solutions with highly customizable reports, configurations, and processes. However, these platforms will never be completely customizable – and for good reason. In multi-tenant deployments, specialized code has to be made available to all users (thereby slowing overall system performance and exponentially increasing system complexity) or isolated to a few users (thereby eliminating some of the cost benefits of having common code).

A key SaaS customization problem involves interfacing with external systems – including other SaaS applications. In cases where customizations are possible, the interface can be highly inefficient due to the cost and delay involved with transmitting data over the Internet.

Savings with Customization

Customized solutions realize economic savings by improving business processes, reducing manual work, and eliminating staff re-training. Many companies drive unique value through the ability to efficiently perform core business tasks. Attempts to change these processes to conform to standards will result in a loss of competitive advantage. In other cases, changing these processes could lead to regulatory or compliance issues.

Defining Requirements

Maximizing business productivity relies on customizing some tasks, automating some tasks, and changing some tasks to conform to standard business practices. The exact mix depends on the individual business, the regulatory environment, and the maturity of the process in the company. The problem is, all of these requirements change over time.

Recommendation

Change is not predictable, but the fact that change will occur is. So,

2 Responses to “ Customizing ERP on SaaS – Part II ”

  1. [...] the next article for a deeper dive into customizing SaaS. Recommend and [...]

  2. Mark Symonds on January 20, 2011 at 2:44 pm

    There is no question that on-premise ERP solutions have a long life ahead. But let’s be clear. Manufacturers who use Cloud ERP are not posting their critical information “somewhere on the Internet”. Cloud ERP providers store data in hardened data centers with audited, world-class security, redundancy and disaster recovery processes and technologies. Their business is all about uptime, response time, security and DR. Those are not usually core competencies for manufacturers.

    More and more manufacturers from startups to $billion global companies are turning to Cloud ERP to help them reduce costs and improve their business processes. CIOs and IT managers who are truly aligned with the business are seeing Cloud ERP as a powerful tool to deliver business value.

Leave a Reply

*