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Cloud ERP vs. SaaS ERP

By Joseph Timmins

Are businesses migrating away from on-premises enterprise resource planning (ERP) solutions? International Data Corporation (IDC) research says yes. According to their survey, nearly three-quarters of ERP customers want to move to a cloud ERP or software as a service (SaaS) ERP. (Although many use the terms interchangeably, SaaS ERP is also cloud ERP, just with different characteristics.)

Here are some things to consider when deciding between cloud ERP and SaaS ERP.

What Is Cloud ERP?

With cloud ERP, the software is managed offsite and delivered through remote servers. These cloud-based ERPs are often ‘single-tenant,’ which means your business has its own virtual application and database servers (versus sharing with other companies).

Because your business manages the software, including maintenance and upgrades, it’s as close as you can get to an on-premises ERP without having an on-premises ERP.

Advantages of Cloud ERP

  • Cost savings because there’s no need to buy/maintain hardware
  • Faster and easier implementation
  • Better security
  • Anytime, anywhere access via any device with an internet connection
  • Configurable software – to your specific needs

What Is SaaS ERP?software as a service ERP, SaaS

As with cloud ERP, SaaS ERP software is managed offsite and delivered through remote servers. Businesses pay a subscription fee based on the number of users and computing power or storage they need. SaaS ERP is “multi-tenant,” which means multiple companies use the same vendor’s servers and infrastructure.

Advantages of SaaS ERP

  • Your deployment is not unique (for better or worse)
  • Scalable infrastructure
  • The vendor is responsible for the hardware and software, including patches, upgrades, and maintenance

Like cloud ERP, SaaS ERP also offers cost savings, standard (vs. unique) deployment, and anytime, anywhere access via any device with an internet connection.

Unlike cloud ERP, however, SaaS ERP:

  • Is difficult to customize and may not support third-party mission-critical applications
  • Splits its servers among multiple businesses, so the vendor determines when updates are done – not you

Which ERP Is Right for You?

Both cloud ERPs and SaaS ERPs are viable options, and the ERP you choose will depend on your business’s needs. However, cloud ERP is the way to go if you want more:

  • Customization options
  • Control over your data, cybersecurity, backups, and recovery
  • Optimized upgrades and maintenance

It’s the best way to get your ERP offsite while staying in control.

Whichever ERP you choose – or if you need help choosing – Acuity Consulting Group can help.

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