When deciding between ERP system as SaaS or purchasing an on premise ERP system there is a checklist that you should want to go through: ERP Saas characteristics vs. ERP on premise. The points on the checklist are actually business parameters that you might want to consider when evaluating an ERP system and considering a SaaS solution or an installed base solution.
Is there a Need for a highly customized Solution?
This is a question if flexibility – are you flexible with your processes and will be willing to adapt the standard process that the system is offering? Or are you conservative regarding your processes and work methods and would not like to make any wide changes? Normally SaaS system are less flexible than the installed ones.
It is a matter of technology. The web technology is not quite changeable as the traditionally ERP technologies. But it is a question of time before the app technology will catch up and will offer the same possibilities for customizations.
How large is the planned Deployment?
This question relates indirectly with the previous one. With on premise ERP solution you are likely to have a long term deployment – you are purchasing a solution that might be customizable and will want to take advantage of the possibilities it offers.
That takes time. With SaaS solution it is the opposite – you are likely to have a relative short deployment. In most cases you will adapt to the standard functions that the system offers.
Is there a Need to integrate with Legacy Applications?
A legacy application is that which the organization has invested considerable resources. In our case, legacy applications may be database management systems (DBMSs) that serve critical business needs. This is a question of data exchange and IT abilities.
If a legacy application is running, the new solution should be able to integrate with it. This is a very technical debate. Please summon IT teams from both side and lay out your requirements. I recommend that they will prepare for you a kind of document which will specify the abilities for integration, the risks, the limits and the required resources. The results will surprise you.
Are there Features that are missing from the Software?
One may ask this question the other way around – which solution offers the most required features? My experience with on premise ERP systems shows that most organizations use merely 50% of the features offered to them. I am not talking about modules (sale, purchase, stock management or finance) but the functionalities that each module brings – the ability to release an offer to an order, the lists and tools of analysis etc.
What is the experience of your IT Team?
Usually the IT administrator is the one who is responsible for the ERP system – is he (or she) is capable of handling such a project? With SaaS it will be much easier.
Is there a Need to upgrade a significant Portion of your IT Infrastructure?
Please bear in mind that the ERP on premise are developed to run with the latest OS systems and other server environments. And the question is whether your IT environment is updated. Otherwise you might need to purchase new licenses, new servers, new computers etc.
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