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What is SaaS ERP (Enterprise Resource Planning?

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Priya Naha

Senior Writer: Priya Naha

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green tickPublished : August 29, 2022

What is SaaS ERP(Enterprise Resource Planning)?

Summary: SaaS ERP is a cloud-based enterprise resource planning software delivered over the internet and sold through subscriptions. ERP as SaaS significantly improves business communications and enhances an organization’s ROI. 

This blog will talk about SaaS ERP, ERP systems, types of ERP systems, and benefits of SaaS ERP over on premises ERP. You’ll also learn about cloud ERP, steps to deploy cloud ERP and the need for ERP as SaaS for businesses.

Integration of ERP and SaaSSource

Software as a service (SaaS) based technologies are enlightening the business world with its tremendous benefits. SaaS and software business processes need ERP systems to cater to all their business processes, including financial management, human resources, real estate management, warehouse management, customer relationship management, inventory management, human capital management, and others. 

 Choosing the right ERP software is necessary for companies to achieve their goals.  If you are unsure about what ERP and SaaS ERP systems are, this blog is just for you.

Here we’ll take you through ERP SaaS, ERP systems, and why ERP SaaS is a better choice than on premises ERP systems. You’ll also learn about cloud ERP systems.

What are SAAS ERP Solutions?

What is SaaS ERP?

Saas ERP solutions are a type of cloud based enterprise resource planning  software that runs on the cloud provider’s or vendors’ servers, is delivered as a service over the internet, and sold through subscriptions.  The SaaS ERP solutions have helped companies maintain their procurement processes, accounting, project management, and others.

Earlier, the SaaS ERP solutions could capture large sets of business data but faced challenges while producing reports. For the IT departments, the SaaS ERP systems were always about large, time-consuming, and expensive deployments that required specific infrastructure or hardware requirements.

However, with software as a service (SaaS) and cloud computing deployments, there is a change in the way organizations think about Saas ERP software.  Businesses can simplify their technology requirements and see a higher and faster ROI by moving ERP to cloud solutions.

Cloud ERP solutions enable other key technologies to integrate, like decision support systems, mobility, collaboration, and social systems. Organizations can leverage cloud platforms and integrated suites with industry-leading scalability and high performance, improved security, and reliability to ensure that your ERP as a SaaS system is successful.

What is SaaS?

What is SaaS?Source

SaaS (software as a service) is a way of distributing applications over the internet as a service and it allows users to use application software and subscribe to them in the cloud rather than license the software or buy the hardware.

Companies can get SaaS solutions from the cloud services provider for a monthly subscription fee. With a modern cloud suite, you can get complete software for your whole business. For example, you can subscribe to numerous SaaS applications for supply chain management, human resources, financial management, customer experience, sales, and marketing organizations.

What is Enterprise Resource Planning (ERP)?

What is ERP?Source

Enterprise resource planning (ERP) is a process that companies use to integrate and manage the most crucial parts of their  business. The ERP system allows users to surface, understand and track saas business metrics.

Today’s ERP systems automate and integrate crucial operational business functions and provide a single source of data insights from sources including financial reporting, accounts payable, general ledger, and others.

ERP functions include:

  1. Accounting
  2. Financial management
  3. Procurement
  4. Project management
  5. Supply chain management
  6. Adaptive intelligence
  7. Enterprise Performance Management (EPM)
  8. Analytics
  9. Risk Management

Individual ERP applications can offer SaaS. A complete suite of ERP applications forms an ERP system to combine business processes and communicate effectively, enabling a data flow between applications.

An ERP software system allows project management and better performance that helps to plan, predict, budget, and accurately report an organization’s financial health.

Types of ERP Systems

Types of ERP SystemsSource

The most common types of ERP software system includes:

On Premises ERP Software

On premises ERP software systems  is the traditional ERP software maintained in physical office space and implemented on-site within an organization. Once implemented, it is hosted on the company’s personal computers and servers for full support, control, and ownership of the entire system. SaaS management software

Cloud ERP Software

Cloud ERP software is a web-based solution popular as  ERP software SaaS. In ERP as SaaS management software , an organization stores data and access it on any device using an internet connection by purchasing it via subscription.

Cloud ERP also has a private cloud that runs on the EP vendor’s cloud or a cloud service provider. As a result, businesses get continual support, training, updates, and flexible customization supported by the ERP vendors.

Hybrid ERP Software

Hybrid ERP software is a blended implementation of ERP on-premises ERP systems and cloud based ERP solutions. The combination of deployment services and hosting vary from each provider.

The hybrid ERP solutions allow ERP users to migrate between delivery models or integrate benefits not available to existing implementations.

6 Benefits of SaaS ERP Systems vs. On Premises ERP Systems

SaaS ERP vs On Premises ERPSource

The debate between on premises ERP vs SaaS ERP has been doing rounds for a long time. However, it is better to end the discussion of ERP SaaS vs ERP systems to help companies choose the best for their business.

Let’s see how the discussion between ERP SaaS vs ERP on premises solution ends!

Financial management CRM systems do a great job by providing strong visibility into enterprise data. Organizations today want to use their financial data to streamline processes and improve decision-making and profitability.

And in recent years, capabilities for data output, monitoring, and reporting have become crucial to organizations. As a result, the financial management system’s reporting requirements have rapidly increased with the demand.

At a minimum level, every company needs a report covering annual, month-end, and quarter close, along with basic financial statements for expenses, balances, and incomes. Though these outputs were always available, adjusting these reports or adding derivations for other needs wasn’t easy.

It is crucial for financial system software to create ad-hoc outputs and generate pre-built reports.Add requirements for information visualization, in-depth data analysis, and narrative reports.

 In addition, companies discover that ERP software solutions must seamlessly work with traditional, on premise solutions. The modern key benefits include:advanced reporting systems like Enterprise Performance Management (EPM) systems.

The ERP as SaaS model was designed to deliver a key set of business benefits vs 

Lower Upfront Costs

  1. It eliminates the need for additional middleware and hardware.
  2. It reduces implementation and installation charges.

On-Demand Scalability

  1. It reduces disturbances while maintaining service levels.
  2. It scales instantly to meet the transactional demands and growing data.

Increased Innovation

  1. It easily accesses support, collaboration, and analytics tools with standardized functionality.

Ongoing, Predictable Costs

  1. It turns capital expenses into operational pay-as-you-go expenses.
  2. It pays more focus on operational costs than technical costs.
  3. It eliminates unpredictable patching, managing, and updating hardware and software costs.

Faster Time to Value

  1. It reduces cost with less required IT support than traditional, on premises solutions.
  2. It implements new functionality immediately.

Support for Globalization Strategies

  1. It improves collaboration between finance resources in various countries.
  2. It gains insight and transparency into profitability and cost across the business with standardized processes.

What to Expect from a Modern SaaS ERP?

The modern ERP as SaaS solution boosts efficiency and automates processes when and where it matters, primarily in times of uncertainty using high-tech machine learning and advanced technologies.

According to a global survey, 91% of respondents say that SaaS enables new technology adoption with finance and operations applications. The technologies include:

Internet of Things (IoT)

Internet of Things (IOT)Source

Suppose you enhance ERP systems with real-time information from streaming IoT data. In that case, your organization can gain more insights, visibility, and efficiencies using smart predictive maintenance, workplace safety, manufacturing, and connected customer experience.

By incorporating IoT data into the company’s supply chains and workflows, organizations shorten their time to produce orders by an average of more than six business days.

Artificial Intelligence (AI)

Artificial Intelligence (AI)Source

Numerous organizations use artificial intelligence (AI) prebuilt on their ERP as SaaS system applications to help drive innovation, automate operations, and make better decisions.

The global survey  also has a result on AI. Incorporating AI into the ERP system yields a 36% drop in errors and reduces the time taken to close the books by 3.5 days.

Along with AI, machine learning and Robotic Process Automation (RPA) are part of a software developer kit that creates custom apps, vertical solutions, and extensions.

Blockchain

Block ChainSource

When businesses require secure collaboration with numerous parties, the solution is to bring everyone together in real-time to share data. With blockchain, businesses have a collaborative framework to share reliable data. However, according to the survey, 42% of respondents claim automating routine monitoring tasks is the most crucial advantage of blockchain applications.

Digital Assistants

Digital Assistants

Source

Digital assistants like chatbots make it easy for ERP as SaaS  systems to interact with multiple other systems.

It increases productivity by guiding employee and customer support tasks, delivering faster analysis, providing instant responses, and making smart recommendations.

The survey also states that companies using chatbots had an average of 38% faster analysis and 36% productivity improvement.

Cloud ERP: Top 10 Signs it is Time For A Modern Financial System

Cloud ERPSource

Undoubtedly, ERP systems deliver significant potential to run your company, improve customer experiences, and directly manage how you compete against businesses.

But, you need to take care of the generational and technological changes in your business and how your present on premise software environment could be holding your organization back.

You now know the benefits of ERP SaaS software over on premise solution.But, how do you know when your company must make the switch to cloud ERP?

We’ve identified the top 10 signs for you. Next, it’s time for your company to switch to  ERP software SaaS during:

Heightened Dissatisfaction with Usability

When employees complain about usability and ask why their on premises ERP isn’t like their mobile devices.

Upgradation of Finance Systems

When your on premises ERP system requires a costly investment as it ages past support dates.

Requirement of New Hardware in Business Systems

When your company’s on premises ERP infrastructure is past due for an extravagant capital replacement.

Increased Reporting Challenges

When your management reporting is too inconvenient.

Rapid Growth of Company Globally

When your current back-office applications disrupt market growth, acquisitions, and international expansion.

Increased Maintenance Costs

When your company’s service costs and system fees increase annually.

Increased Business Demands

When your business cannot keep up with increasing demands.

More Disparate Data and Nonintegrated Systems

When there is growth in disconnected systems, enterprise data gives conflicting answers to key questions.

New Compliance Requirements

When there are increasing financial and compliance requirements impacting your organization.

Time for an IPO

When your company is ready for a public offering that mandates strict financial controls and information.

7 Steps to Deploy a Cloud ERP System

Deploying a Cloud ERP SystemSource

Once your company has decided to switch to SaaS ERP solutions, you might wonder about the next step. Here’s how you can get started!

Define your Project Goals Clearly

Companies must establish KPIs to measure business operations like infrastructure costs, productivity, and closed financial speed.

You must keep track of your strategy build, provide a baseline to access success at milestones, and build project consensus and approval.

Document Inventory Management Systems and Processes

Companies need to map their complete IT infrastructure, including their internal and third-party solutions, their integration points, and the redundant systems.

You can include your organizational structure to understand the roles aligning with data migration, management, ownership, and use. Defining a single source of truth strategy is essential before starting the project and production planning.

Ensure Strong Executive Sponsorship

Executive sponsorship is essential regardless of what your company size is! You need continuous support throughout your business process management. Along with ongoing employee communication, accentuating the leadership commitment to your new cloud ERP SaaS software will drive success.

Select an Implementation Approach in Alignment to the Organization

The cloud ERP will vary from organization to organization. Moreover, it does not require deploying cloud ERP applications simultaneously. Numerous organizations incrementally choose to adopt high-value cloud services alongside their on premises solutions, resulting in a hybrid environment.

Building towards a complete end-to-end transformation, companies can start a modernization journey with crucial ERP applications.

Support Best Practices Present in the Application

The best modern practices are built in cloud applications so that companies can replace legacy software developer kits along with outdated approaches and processes.

ERP is the perfect place to start your project because cloud ERP solutions deliver almost all the professional services you need with built-in standardization.

Study Analytics and Reporting Early

With SaaS ERP, the users can understand your business in real-time, with advanced data visualization and multidimensional analysis that provides quick analysis without relying on a data warehouse. Your company must define analytics and reporting needs early in the project plan. Then, once the information is live, you can quickly generate in-depth, meaningful reports.

Involve Process Owners and Users from the Beginning

The users of your SaaS ERP solutions determine your project’s success. Therefore, throughout the implementation, ensure to include tests and demonstrations at regular intervals.

Why is SaaS ERP Software Best for Your Business?

From the above analysis, you have come to know that the latter is the winner in the debate of traditional ERP vs SaaS ERP.

Let’s enlighten you on the type of companies that can utilize SaaS ERP in the best way.

 SaaS ERP is the best option for companies that:

  1. Want low upfront costs and a quick path to use
  2. Don’t need much system customization and are comfortable with the security that the public cloud provider hosting the service provides.
  3. Don’t have a large IT staff and don’t want to spend time, money, and efforts on upgrades and upkeep.

Get your company’s best SaaS ERP systems and improve your business’ ROI in no time!

Frequently Asked Questions

ERP is the integrated management of major business processes in real-time that is mediated by software and technology. On the other hand, SaaS is a way of delivering various applications over the internet as a service.

ERP is the integrated management of major business processes in real-time that is mediated by software and technology. In contrast, cloud ERP runs on a vendor's cloud platform allowing companies to access the internet.

ERP is a fully maintained and supported cloud solution, covering software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS).

The steps to successful ERP implementation include:

  1. Plan
  2. Choose the right team members
  3. Communication
  4. Research
  5. Design and Development
  6. Data migration and integration
  7. Test and Go-live
  8. Change management and training
  9. Stay connected
  10. Ongoing partnership and support

ERP is important because of the following reasons:

  1. Save money
  2. Improve collaboration
  3. Better analytics
  4. Better productivity
  5. Customer satisfaction
  6. Simplified risk management and compliance
  7. Better inventory monitoring
  8. Better production planning and resource management

The basic features of ERP include:

  1. Integration
  2. Data analysis
  3. Automation
  4. Tracking and visibility
  5. Accounting
  6. Reporting
  7. Customer relationship management
  8. Financial management
  9. Supply chain management
  10. Human resources
  11. Sales and marketing
  12. Manufacturing

Updated : September 16, 2022

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