The benefits of adopting ERP as SaaS for your business

Business Process Management

Discover the benefits of adopting ERP as SaaS for your business, including lower costs, enhanced scalability, and improved resource allocation. Understand the various advantages ERP as SaaS has over traditional on-premises solutions.

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Written by
Vendr Team
Published on
April 3, 2023
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Powerful enterprise resource planning (ERP) is vital for businesses big and small, but accessing the right tools without breaking the bank or wrestling with complicated installations can be a challenge. Traditional on-premises solutions require a huge upfront investment, as well as ongoing costs related to server maintenance, updates, and support.

For these reasons and more, ERP as Software as a Service (Saas) has emerged as a powerful alternative, providing businesses with streamlined operations, cost savings, and flexibility.

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What is ERP as SaaS?

ERP is a suite of integrated software applications that manage and automate various business functions, such as finance, inventory, sales, customer relationship management, and human resources. Traditionally, ERP systems were installed on a company's premises and required extensive hardware and infrastructure investments.

ERP as SaaS, on the other hand, is a cloud-based approach to ERP. With this model, the software is hosted on remote servers and accessed through the internet. This means that businesses no longer need to invest in costly hardware or maintain their own data centers. Instead, they can access their ERP system from anywhere with an internet connection, using any device. Top ERP SaaS solutions include Syspro, Acumatica, and Netsuite (see our guides on what Netsuite is and how it's used, as well as our guide on Netsuite pricing for more).

The benefits of adopting ERP as SaaS

Adopting ERP as SaaS doesn’t just reduce costs—it also provides your business with improved scalability, better security, and easier maintenance.

Lower upfront costs and improved resource allocation

One of the most significant advantages of using ERP as SaaS is the lack of a significant upfront investment. Traditional on-premises ERP systems can be quite expensive, with hardware, software, and infrastructure costs eating into your budget. This often puts these tools out of reach for small and medium-sized businesses.

With ERP as SaaS, companies can avoid these hefty initial investments. Instead, they pay a subscription fee, usually on a monthly or annual basis, which covers the cost of the software and related services. This allows businesses of all sizes to access the same powerful ERP tools as their competitors, leveling the playing field and promoting growth.

Another notable advantage of ERP as SaaS is its ability to enable better resource allocation and cost management. With a subscription-based pricing model, businesses can more accurately predict and manage their software expenses. This makes budgeting and financial planning easier, as you can scale your ERP system up or down based on your organization's needs and budget constraints at any given time.

Furthermore, because ERP as SaaS is hosted remotely, your organization can save on energy costs and other operational expenses associated with maintaining on-premises hardware and infrastructure. This can lead to a more sustainable and cost-effective IT strategy for your business.

Enhanced scalability, flexibility, and business continuity

As your business grows and evolves, your ERP system needs to be able to keep up. With on-premises ERP systems, scaling up can be a costly and time-consuming process, involving purchasing and installing additional hardware and software.

ERP as SaaS offers a much more scalable and flexible solution. As your company expands, you can quickly and easily add new users, modules, and features to your system without any additional hardware investments. This enables your business to adapt and respond to changing market conditions and customer demands more effectively.

Market conditions can change in an instant, and disaster can strike just as quickly. In the event of an unforeseen system failure, having a robust disaster recovery plan in place is crucial to ensure your business can quickly resume operations. With traditional on-premises ERP systems, developing and maintaining a disaster recovery plan can be time-consuming and costly, often requiring additional hardware and infrastructure investments.

ERP as SaaS offers a more straightforward approach to disaster recovery. As your data is stored in the cloud, backups and redundancies are typically managed by the SaaS provider. This means that your organization can rely on the provider's expertise and infrastructure to ensure your ERP system and data are protected and can be quickly restored in the event of an outage.

Easier upgrades and maintenance

Keeping your ERP system up to date is crucial to ensure it reflects the latest technology and continues to meet your business's needs. However, with traditional on-premises systems, upgrades can be time-consuming and disruptive, often requiring downtime and extensive testing.

ERP as SaaS simplifies this process. As your service provider manages the software, they are responsible for ensuring it remains up to date and secure. This means that upgrades, patches, and new features are rolled out automatically, with minimal disruption to your business. This not only saves you time but also helps reduce the risk of errors and system downtime.

Integration with your other business applications is just as seamless as system upgrades. In today's interconnected business environment, it's crucial for companies to integrate their ERP systems with other essential business applications, such as customer relationship management (CRM), human resources management (HRM), and e-commerce platforms. This ensures seamless data flow and communication between different departments and processes, ultimately improving overall efficiency.

ERP as SaaS often comes with built-in integration capabilities, making it easier for businesses to connect their ERP system with other applications. Moreover, many SaaS providers offer pre-built integrations with popular third-party software, further simplifying the process. This streamlined integration can save your organization time and resources, as well as reduce the risk of errors and data inconsistencies.

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Enhanced business intelligence and reporting capabilities

Modern ERP as SaaS solutions often come with advanced business intelligence and reporting capabilities, allowing organizations to analyze their data and gain valuable insights into their operations. These tools can help businesses identify trends, monitor key performance indicators (KPIs), and make data-driven decisions to improve their processes and overall performance.

Additionally, many ERP as SaaS providers offer customizable dashboards and reporting templates, enabling you to tailor the system to your organization's specific needs and preferences. This level of customization allows you to obtain the most relevant and actionable insights from your ERP data, ultimately leading to better decision-making and a more competitive edge.

As we mentioned earlier, ERP as SaaS providers are responsible for maintaining and updating their software. This includes not only essential security patches and bug fixes but also the development and deployment of new features and technologies. By adopting ERP as SaaS, your organization can benefit from continuous innovation and access to the latest advancements in ERP technology. This ensures that your ERP system remains cutting-edge and is always equipped to meet your business's evolving needs. In contrast, companies with traditional on-premises ERP systems may be slower to adopt new technologies due to the costs and complexities associated with upgrades and migrations.

Enhanced security and compliance

Data security and compliance are critical concerns for all organizations today, regardless of their size. With the increasing prevalence of cyberattacks and data breaches, it's essential to ensure that your ERP system is secure and adheres to industry regulations.

ERP as SaaS providers typically have robust security measures in place, such as data encryption, firewalls, and regular security audits. As they specialize in providing software services, they have the resources and expertise to ensure your system remains secure and compliant with industry standards. This can be especially beneficial for small and medium-sized businesses, which may not have the resources to manage these aspects in-house.

Additionally, with ERP as SaaS, your data is stored in secure data centers, often with redundant backups and disaster recovery plans in place. This provides an extra layer of protection for your valuable business information.

Faster implementation and reduced risk

Implementing a traditional on-premises ERP system can be a lengthy and complex process, often taking months or even years to complete. This not only delays the realization of benefits but also exposes your business to various risks, such as implementation failure or cost overruns.

With ERP as SaaS, the implementation process is significantly faster and more straightforward. As the software is hosted remotely, there is no need for extensive hardware installations, and the service provider will often assist with data migration and system setup. This can reduce the time it takes to get your ERP system up and running, allowing you to start realizing the benefits more quickly.

Moreover, the reduced complexity of ERP as SaaS implementations can help mitigate the risks associated with traditional ERP projects, increasing the likelihood of a successful outcome.

As ERP as SaaS is cloud-based, your employees can access the system from anywhere with an internet connection. This enables remote work, promotes collaboration, and ensures that your teams always have access to the information they need to make informed decisions.

Plus, with real-time data syncing, your entire organization can stay up to date with the latest information, reducing the risk of errors and miscommunications. This increased accessibility and collaboration can lead to improved decision-making and faster response times, ultimately boosting your business's efficiency and effectiveness.

Focus on core business activities

By outsourcing your ERP system to a SaaS provider, your IT team can spend less time managing and maintaining the software and infrastructure. This frees up valuable resources that can be redirected towards more strategic initiatives, such as innovation, digital transformation, and improving your core business processes.

This shift in focus can lead to increased competitiveness and growth, as your organization is better equipped to adapt to changing market conditions and capitalize on new opportunities.

Unleash the full potential of your business with ERP as SaaS

The adoption of ERP as SaaS offers a compelling array of benefits to businesses, enabling them to access powerful ERP tools without the financial and technical burdens of traditional on-premises systems. By leveraging cloud-based technology, organizations can enjoy lower costs, improved scalability, faster implementation, and the ability to focus on core business activities.

As businesses continue to embrace digital transformation, ERP as SaaS is poised to become the go-to solution for companies seeking a more agile, cost-effective, and efficient approach to enterprise resource planning. Don't let outdated systems hold your organization back—explore the advantages of ERP as SaaS and discover how it can propel your business forward in today's competitive market.

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Vendr Team
Vendr's team of SaaS and negotiation experts provide their curated insights into the latest trends in software, tool capabilities, and modern procurement strategies.

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