According to experts, manufacturers are leading the way with Software as a Service (SaaS) adoption. Despite this, there is still some confusion about SaaS deployment options.
So how does SaaS ERP measure up to the more traditional ‘on-premise’ model? And what exactly are the benefits for your manufacturing business? Here’s a rundown:
SaaS verses on-premise
The biggest difference between SaaS and on-premise is how software is accessed. With on-premise, software is accessed–as the name suggests–on your premises, and the software installed on users’ computers. SaaS on the other hand is accessed via the Internet and typically hosted by the software vendor.
Within a SaaS model, your business can rent its software over a period of time from a software vendor, allowing you to spread the cost. This is different from an ‘on-premise’ solution where your business purchases a perpetual license to the software. In other words, with SaaS, your business doesn’t own the server or the software: you pay a monthly subscription to run them as a service.
Simply put, instead of paying out a substantial upfront investment for your ERP hardware and software, you’re paying for your ERP system on a subscription basis, with affordable monthly or quarterly ‘per user’ costs.
What are the key benefits of SaaS for manufacturers?
Substantial up-front costs are replaced by monthly or quarterly ‘per-user’ charges.
There are no additional hardware investments (e.g. server, IT infrastructure).
There’s no need for manufacturers to maintain servers or other IT infrastructure on their premises - system maintenance is handled remotely by the software vendor.
The software vendor is responsible for all security and uptime.
Implementation will typically take less time.
Manufacturers are leading the way with SaaS adoption
According to experts, manufacturers are leading the way with Software as a Service (SaaS) adoption. Gartner’s study “Survey Analysis: Adoption of Cloud ERP, 2013 through 2023” (2013) revealed that 47% of respondents planned to move their core ERP systems to the cloud by 2018.
In another study, the research and advisory firm Mint Jutras, concluded that SaaS-based applications will steadily grow from 22% of all manufacturing and distribution software installed in 2013, to 45% within ten years.
Recent research from management consulting group McKinsey & Co. “IT as a service: From build to consume” (2016) also suggests that the shift to cloud computing is about to accelerate, according to McKinsey “More large enterprises are likely to move workloads away from traditional and virtualized environments toward the cloud—at a rate and pace that is expected to be far quicker than in the past,”
The right ERP software for your manufacturing business
At Kerridge Commercial Systems we work with manufacturing companies to help them choose the type of ERP deployment option that is right for their needs. Some of our customers still prefer the traditional on-premise ERP model, but a growing number prefer the Cloud ERP model, of which we offer a number of variants.
Our K-Cloud operates within a ‘tier 3’ standard data centre where the latest firewall and power source technology, physical security and climate control combine to protect your dedicated version of the software - and your critical business data.
SaaS provides a level of affordability that many businesses like. But it’s a business model that also generally gives rise to an improved, newer and upgraded ERP system, as well. That’s because instead of being forced to wait ten years or so to upgrade an ERP system, the upgrade cycle can be much more frequent, as the impact on the monthly subscription that you pay will be comparatively small.
If you are thinking about making the move to SaaS or Cloud ERP, get in touch. I'd be happy to talk to you about your options.
If you are considering implementing a new Manufacturing ERP system, be it SaaS or on-premise - our free tip sheet below can help you on your way.....