Successful ERP implementation depends on a cascading series of decisions shaped by the budget, needed features, user requirements, customizations, and more. Once an ERP vendor is selected, one of the first options that must be researched, reviewed, and resolved is the choice of deployment.
Why is Software Deployment important?
Software deployment includes all the activities and procedures that make software available for use. In ERP, the categories for deployment generally come in three flavors: On-Premise, SaaS, and Cloud ERP. Because the type of deployment drives so many factors throughout implementation, it’s important to understand the benefits and considerations of each option.
On-Premise ERP
On-Premise deployment involves the upfront capital acquisition of the software license which means, of course, that you own it. Having ownership allows for full customization of your ERP solution as well as integrations to other software. A study by Allied Market Research expects On-Premise to hold a larger market share of 57% through 2020.
Why it may be right for you: You keep your data on-site. Having your own in-house IT team provides immediate response to issues. This option offers greater ability for customizations because you own it.
Considerations: Choosing On-Premise deployment does require a higher initial investment or capital expenditure due to the software purchase as well as the management of related hardware, servers, and the IT staff required to maintain it. Implementation typically takes longer than SaaS due to the number of customizations and infrastructure needed. In addition, On-Premise software may face challenges related to system upgrades and enhancements depending on the complexity of your initial customizations which are tied directly to your current deployment. If your ERP vendor releases product updates, your specific customizations could be overwritten unless your IT team carefully reimplements your original customizations.
SaaS ERP
Software-as-a-Service — or “SaaS” — is a subscription model that allows for a comprehensive software solution that wholesalers and distributors can use to run their business. The predictability of the subscription service or operating expenditure can be folded easily into ongoing monthly budgets and reduces the upfront capital outlay associated with On-Premise solutions.
Why it may be right for you: No physical servers or cloud-based applications. You just have a subscription fee to access software via a web browser. Vendor provides continuous updates and enhancements.
Considerations: SaaS provides simple deployment off-site at a hosting provider or on-site within your office. In either case, you don’t have the responsibility of maintaining the software. The software application runs on your provider’s servers which users access via the internet. Upgrades and enhancements are also handled by the software vendor. Software customization options are also available and should be discussed with your vendor.
Cloud ERP
Cloud deployment has the same subscription model as SaaS except that the server is hosted in the cloud. According to the same study by Allied Market Research referenced above, the cloud-based ERP market is enjoying significant expansion and is forecast to grow with a CAGR of 10% by 2020 culminating a market share of over 40%. One of the main drivers of growth is that it allows for easier deployment and removes the need to have servers hosted locally or at a remote location. Companies can reallocate their IT budget from server maintenance to innovating other business processes.
Why it may be right for you: Costs are predictable over time. The cloud provider handles all hardware needs, provides continuous updates, and gives you the ability to have “elastic growth.” Cloud also allows for easy mobile accessibility. To get started, all you need is an internet connection.
Considerations: Cloud offers elasticity meaning resources and costs can increase or decrease depending on your demands. Simplicity of deployment can be offset by hurdles of upgrading highly customized systems.
Fully understanding your software deployment choices enables you to make the best ERP decisions for your organization. With Distribution One, you have the options of On-Premise, SaaS, or Cloud deployment for our innovative turnkey ERP-ONE software. Still have questions? We will be happy to listen, discuss, and recommend the best solution based on your company’s needs.