An ERP (Enterprise Resource Planning) or PGI (Integrated Management Software) is an integrated software solution that links all the organizational and financial processes of a company. The basic principle of an ERP software is that the more the internal links are automated, the better the organization will perform as a whole. This performance gain will be felt internally and in interactions with stakeholders (customers, suppliers, employees, etc.).
However, integrating different departments, functions and business processes can be very difficult. In order to achieve concrete business benefits in terms of accessibility, efficiency, productivity and overall security, architectural assessments conducted upstream. Selecting an ERP for large-scale implementations can involve some tough decisions. An on-premise ERP being expensive to set up and maintain, the most logical choice is to decide between ERP SaaS and ERP Cloud.
What is a SaaS ERP?
Owners of the software as a service (SaaS) version of an ERP do not have to manage any physical infrastructure, nor do they have to update or maintain the ERP. The solution provider takes responsibility for deciding all of this. It simplifies the use of ERP by companies by freeing them from the management of supporting technologies and infrastructures.
Updating technologies and maintaining ERP systems are difficult tasks. The large number of modules, interconnected dependencies and data further complicates the task. ERP SaaS is the solution. It separates the services and the functioning of the organization. HR or other functionalities, for example, can be upgraded without affecting the manufacturing module. Upgrades to a SaaS ERP are simplified by service-based configuration. Customers can use state-of-the-art technology without explicitly changing their environment.
What is a Cloud ERP?
SaaS ERP and cloud ERP are both implemented through the cloud. Nevertheless, a company normally manages a cloud ERP on a private basis. In other words, the cloud space on which the ERP is installed is used exclusively by your company. Unlike SaaS ERP therefore, the remote server is not shared.
Once the system is in place, the company will be able to access its data remotely via the Internet. With cloud-hosted ERP, your business is in control of upgrades, downtime, and customizations. Scalability is another feature of cloud-based ERP, which helps companies meet their physical infrastructure needs.
How to differentiate between ERP Cloud and ERP SaaS?
Cloud ERP and SaaS ERP are used confusingly in blogs, IT news articles, and even in professional communications. This makes it difficult to tell them apart, making the reader, who is often unaware, believe that they are the same thing.
Commonalities :
One of the causes of confusion between ERP Cloud and ERP SaaS is the fact that these solutions share certain characteristics, namely:
Both are based on the principle of cloud computing,
The installation is done in both cases on a remote server (infrastructure located outside the company),
ERP data is accessible from the outside, thus meeting the mobility and flexibility needs of employees.
The differences between the two models:
a) Characteristics specific to the Cloud ERP model
The ERP Cloud is a single-tenant service: This means that the cloud space on which the ERP is installed belongs solely to the user company. No other entity can access it without his authorization.
The management of the software is the responsibility of the company: After acquiring a cloud space, the company wishing to use an ERP is responsible for acquiring it, installing it and ensuring its maintenance.
The possibility of having tailor-made software: From the software version installed, there is the possibility of bringing certain personal touches to the ERP in order to make it more suited to your needs. However, these manipulations require the intervention of specialized persons.
Low costs depending on the size of the company: Large companies need large data centers, servers and storage capacities. Thus, with the ERP Cloud, the physical infrastructure expenses are considerably reduced.
More security for data: When it comes to sensitive information and critical data, the ERP Cloud is able to provide the necessary control. You can customize downtime, upgrades, and data rules to suit your business needs.
² : When organizations manage their own cloud, they must ensure that data compliance requirements are met. For example, for customer information, HIPAA and GDPR regulations must be followed. Although cloud service providers manage some of the guidelines, the company should always be proactive about regulations and stay current.
b) Characteristics of the ERP SaaS model
Technical management is outsourced: A third-party company is designated to provide the hardware and ERP software. This “intermediary” is therefore responsible for all installation, upgrading and maintenance operations to deliver a turnkey solution.
You pay what you use: Subscribing to a SaaS solution can be done according to the number of users in your company and also according to the power and storage required to process your data. This makes the SaaS model particularly attractive for small and medium-sized businesses.
A little more practicality: The ERP SaaS is natively developed in web language and therefore optimized for use on the internet. This feature makes it perfectly compatible and easy to use remotely and via different connected devices.
Compatibility with other applications: SaaS ERP companies facilitate the integration of third-party applications. The most popular applications are frequently integrated with SaaS ERPs and can communicate back and forth with them.
Personalization is very limited: The multi-tenant aspect also means that any modification of the basic platform by the supplier is passed on to all customers. Thus, the latter will ensure as much as possible not to make changes and therefore to offer software close to the source version.
The ERP SaaS is multi-tenant: Unlike the ERP Cloud where the company is a single tenant, the software here is used by several companies that benefit from a right to use the solution subscribed to with the SaaS supplier.