ERP Cloud Considerations

What the chart doesn’t show is the relative size of the “X’s”. For example, when implementation and customization costs consume the majority of the budget (as is often the case with mid-sized ERP customers), SaaS initial costs are still less – but not by much. Also, as your business grows, the size of the Annual Subscription in the traditional column is an “x” while the size of the Annual Subscription in the SaaS column is “X“. Many times the cost of SaaS can be higher in the long term.

With ERP, Flexibility Matters

ERP software customers should seek flexibility – software at your service. Do not lock into a single purchasing or deployment model. Make sure that your solution can be readily customized and tailored to your particular needs. Verify that your software and data can be easily re-deployed in a different environment.

Following this advice will make sure that you save money in both the short term and the long term.

“SAP has cut 3,300 staff and is asking the rest to be more nimble and opportunistic. A key project is to use “cloud” computing, software delivered over the internet as a service to adapt ERP to small and medium-sized companies. SAP has a product, BusinessbyDesign, but it’s had teething troubles.”

A key takeaway is that somewhere out there, a better model exists. And SAP is searching for it. Is the model a web-based product, a cloud product, a SaaS product or something else?

To answer this, let’s look further in Mr. Mortished’s article where he points out how SAP became successful.

“The idea was to integrate lots of different bits of business software (payroll, manufacturing, customer service, supply chain) into a seamless whole so that managers can see into the different parts of a business and quickly find out what is going on.”

Today, the need for a single-view of data exists alongside the need for cost cutting. Can new SaaS and cloud technologies provide a single-view of data or do SaaS technologies limit customization and integration and thereby limit themselves to point applications?

A customizable SaaS solution with a viable value added reseller model is certainly possible. Further, the advent of web technology has simplified integration so geographically dispersed systems can communicate.

If it’s possible, why hasn’t it been done?

Perhaps it’s due to large investments in existing systems. The natural course of action is to maintain your existing solution instead of paying the massive expense of building, configuring, and training people on a new system.

Perhaps it’s due to fear. What happens I move my business to SaaS and then want to move back for regulatory or compliance reasons? Most vendors use different codes bases for their SaaS solution and their on-premise solution, thereby locking customers in to one model or the other.

Perhaps the incentives are too small. SAP and Oracle do not want to sabotage current revenues. Customers do not want to risk upfront money for future operational, development, and management savings.

Perhaps it’s due to another reason. Feel free to suggest and comment.

Software-At-Your-Service is a flexible software licensing and deployment model that allows customers to shift between SaaS and Traditional purchasing methods.

This blog provides news and commentary that describes how companies can benefit from Software-At-Your-Service as it relates to accounting, enterprise resource management (ERP), and customer relationship management (CRM) applications.