Enterprise resource planning (ERP) is a computer based system that that manages both internal and external resources. These resources might be financial resources, human resources, materials and tangible assets. The architecture is meant to provide information throughout the organization–from department to department–and to external people who have a stake in the company. Run on a central database, ERP consolidates everything so that it is very streamlined and uniform across the entire enterprise.
SaaS ERP vs. Traditional ERP
There are a series of reasons why SaaS ERP is better and worse than Traditional ERP. In the end, when choosing one for your business, these differences should be heavily weighed. They will provide insight into which is the proper product.
Flexibility
Traditional ERP can be customized and tweaked the way you want it because it is installed directly to your server. SaaS ERP is not. Therefore, when dealing with SaaS, you have fewer customization techniques and therefore, you need less technical ability to run it. However, because of the drop in customization, if there is something very specific you want to do, SaaS might not be able to let it happen.
Simplicity
As mentioned above, since it is not as flexible, SaaS is easier to use since you don’t need as much in technical experience. Since you don’t own SaaS, you don’t have to worry about putting it on new servers or anything like that. However, because it is so easy, you might run into some complexities that you wouldn’t otherwise run into when trying to implement different aspects of the ERP.
Control
Going hand in hand with flexibility is control. For small businesses that don’t have a large technical team, giving up control for the ease of SaaS is not a bad thing. However, for mid-to-large sized businesses that can afford larger technical teams, having more control over the ERP is beneficial and therefore, traditional ERP is a favorite. For smaller businesses, though, SaaS is ideal.
Accessibility
This is a basic one. SaaS requires the Internet. Traditional does not. Should the Internet crash, you lose out on accessing your ERP. Traditional, so long as your company has an internal network, can be accessed all the time.
Cost
SaaS is cheaper to implement in the short term. However, since you’re leasing it yearly, the costs can definitely become high as you add more employees. Traditional is a one time cost since you own the software after that and it is installed on your server. So, in the short term, SaaS is definitely cheaper. In the long term, Traditional is cheaper.
