From the SME to the large group, all modern companies benefit from a close connection between their data and their operational and financial functions. And the more these links are automated, the more the company performs. It is on this simple idea that enterprise resource planning (ERP) systems are based. However, choosing and successfully implementing an ERP is not always so simple. It can be a complicated and confusing process, starting with the question of whether to use a SaaS, on-premises or cloud-based ERP.
A few answers:
At first glance, this may seem like a question of technology architecture unrelated to how you run your business or whether you run it efficiently. If your ERP system can serve as a single database integrating finance, human resources, production, distribution, inventory, orders and purchasing, does the way it is hosted really matter? important?
The answer is yes ! Each method of deploying an ERP has specific advantages and disadvantages that make it a more or less suitable solution for different companies. For example, SaaS ERP can usually be deployed faster and at lower upfront costs, while Cloud ERP can offer more scope for customization.
Although some use these two terms interchangeably, SaaS ERP is actually a subset of cloud ERP with special characteristics. This is the most advanced technology in Cloud Computing. Moreover, 86% of IT decision makers say it: Cloud Computing is the future of IT! What do the terms ERP Cloud and ERP SaaS mean? How do they differ? We remove the ambiguity!
What is Cloud Computing?
Cloud Computing refers to the fact of storing applications and data on remote servers and accessing them via the Internet. Previously called “hosting”, Cloud Computing is opposed to storing data and programs on servers installed within the company itself.
Any terminal (desktop, tablet, smartphone) thus becomes an access point to applications hosted in the Cloud: data is easily accessible anywhere, constantly and from any terminal. Faced with these new imperatives of mobility and accessibility of information, companies now tend to resort to solutions stored in the Cloud. Iaas, Paas or Saas, each of these 3 alternatives meets specific needs.
What is IaaS?
Infrastructure as a service (IaaS) is a type of cloud computing service that offers storage and networking resources on demand, on a pay-as-you-go basis.
Migrating a company’s infrastructure to an IaaS solution helps reduce on-premises database maintenance, save hardware costs, and gain real-time business insights. IaaS solutions offer great flexibility and the ability to scale enterprise IT resources based on demand and load. They also allow the rapid addition of new applications. The reliability of the IT infrastructure is thus contractually guaranteed.
What is PaaS?
Platform as a Service (PaaS) is a complete cloud-based development and deployment environment. Like IaaS, PaaS includes infrastructure (servers, storage, and network), but also middleware, development tools, business intelligence (BI) services, database management systems, and more. PaaS is designed to support the full life cycle of a web application: creation, testing, deployment, management and updating. This model is often found in the field of e-commerce sites.
PaaS avoids the expense and complexity of purchasing and managing software licenses, application infrastructure, or development tools and other resources. The company manages the applications and services it develops, and the cloud service provider generally manages everything else.
What is SaaS?
Software as a service (SaaS) is one of the most advanced cloud solutions. It allows users to connect to cloud-based applications and use them over the Internet. The most common examples are e-mail, calendar management and office automation tools.
SaaS provides a complete software solution that the business acquires, on a pay-as-you-go basis, from a cloud service provider. The rented companye therefore the use of an application and users connect to it through the Internet, usually using a web browser. All underlying infrastructure, middleware, software and application data are located in the service provider’s data center. The service provider manages the hardware and software and, through an appropriate service contract, ensures the availability and security of the application and data. SaaS allows the organization to be quickly operational with an application for a minimal initial cost because shared.
Software as a service (SaaS) is one of the most advanced cloud solutions. It allows users to connect to cloud-based applications and use them over the Internet. The most common examples are e-mail, calendar management and office automation tools.
SaaS provides a complete software solution that the business acquires, on a pay-as-you-go basis, from a cloud service provider. The company therefore leases the use of an application and users connect to it through the Internet, usually using a web browser. All underlying infrastructure, middleware, software and application data are located in the service provider’s data center. The service provider manages the hardware and software and, through an appropriate service contract, ensures the availability and security of the application and data. SaaS allows the organization to be quickly operational with an application for a minimal initial cost because shared.
ERP SaaS: SaaS technology at the service of business management
To summarize and simplify, Cloud Computing is the act of hosting its IT infrastructure and applications outside the company with a provider. SaaS is the highest level of Cloud Computing service because infrastructure, application execution platform and applications are fully managed by the provider.
SaaS is therefore a Cloud Computing service.
By extension, the terms “SaaS applications” or “ERP SaaS” have appeared, confusing companies wanting to carry out an ERP change project, if they hadn’t already.
From the English “Enterprise Resource Planning” (or PGI “Integrated Management Software”), an ERP designates a management solution allowing companies to cover all of their functional and management needs within the same application. The data is thus managed centrally in a single database: the information is stored in real time and without interruption of flow, which makes it possible to obtain a 360° view of all flows (purchases, sales, stocks, production, accounting, etc.).
The standard functionalities of ERPs vary according to the editors. However, they generally cover the needs of commercial management, CRM, production management, accounting and even, for certain ERPs, payroll and human resources functionalities.
Nota Bene: the ERP SaaS is natively developed in web language in order to be optimized to be delivered on the Internet. It is maintained by the editor who manages version upgrades and updates.
ERP Cloud vs ERP SaaS: everything you need to know to avoid confusing them
To choose the right ERP, you have to start by understanding and mastering what you are talking about. However, the two terms that we hear most often, “ERP in SaaS mode” and “ERP in the Cloud”, tend to be used interchangeably, even though they designate two distinct types of ERP. Here’s how to tell the two apart.
ERP Cloud: similarities and differences with ERP SaaS
Differentiating between ERP Cloud and ERP SaaS can be difficult as they are used interchangeably in blogs and specialized IT press articles, or in the communications of the publishers themselves. Thus leaving readers, often uninformed, to think that it is the same thing. Historical publishers are largely responsible for the appearance and maintenance of this ambiguity: many of them today communicate on “SaaS applications” without actually being so.
Cloud ERP should be considered as a technological infrastructure with two essential characteristics: the servers are located in an off-site data center (which often does not belong to the company using them) and the company accesses the software. via Internet.
At one end of the spectrum is the single-tenant Cloud ERP. Under this model, the company manages the software, including maintenance and upgrades. Its operation is therefore closer to an ERP installed on site. At the other end of the spectrum is multi-tenant SaaS ERP, where the vendor is responsible for hardware and software, including patches, upgrades, and other maintenance. As this type of ERP is multi-tenant, any modification of the base ERP platform is passed on to all customers at the same time. All of this is included in the subscription that the company pays monthly or annually. An amount that depends on the number of users and/or the power or storage required.
ERP SaaS and ERP Cloud therefore have in common that they are hosted outside the company and provide access to ERP data from outside, which meets the mobility needs of employees.
However, from a technical point of view, the structure, components and programming language of SaaS and Cloud ERPs are clearly distinct: SaaS ERP is natively developed in web language and optimized for use on the Internet, whereas ERP Cloud is originally developed to be used locally. If the ERP Cloud is accessible via the Internet, it is thanks to an HTML layer added to the technical core of the ERP. Indeed, the ERP Cloud is initially developed and planned for a client/server architecture, that is to say installed on servers in the client company. In addition, the performance, processing speed and browsing speed between a Cloud ERP and a SaaS ERP are often not equivalent, especially when internet connections are degraded.
Another difference between ERP Cloud and ERP SaaS: multi-tenant updates. Companies with access to an ERP Cloud have access to the version installed when implementing their solution. Their subscription includes, of course, the factto be able to receive updates, but these can only be implemented by going through technical migration services not included in the framework of their contract. Conversely, in the context of an ERP made available in SaaS mode, it is the editor who takes charge of version upgrades and updates. All SaaS ERP customers are therefore on the latest version published by the publisher and constantly benefit from the new features available via updates.
What criteria should be taken into account when defining the budget for your ERP?
Once the green light has been obtained to invest in a new ERP system, it remains to determine and justify the budget to be allocated to the project. For this, the drafting of specifications is essential. Here are some of the key elements of ERP cost planning:
- The number of users: because the cost of ERP SaaS depends mainly on the number of users, smoothing is an interesting solution to take into account future recruitments.
- The functionalities: to know the essential functionalities of the future ERP, it is necessary to study the weak points of the company. The functionalities will, in fact, aim to streamline the processes, in order to ensure a more modern management and to help the success of the company’s projects.
- Integration: the chosen ERP will have to communicate as much as possible with the other departments operating in the company: CRM, logistics, accounting, payroll system, etc.
- Scalability: a scalable ERP will make it possible to refine the software after its implementation to respond ever more precisely to the needs of the company.
- Maintenance: in correlation with the hosting model of the solution, maintenance can be supported by the publisher or require a dedicated team internally.
- The deployment model: As you will have understood, there are different deployment modes for ERPs. On-Premise, Cloud or SaaS have varying prices.
How much does ERP SaaS cost?
When it comes to pricing in the SaaS ERP market, giving fixed prices is not easy. And for good reason, today only a handful of publishers offer truly SaaS ERPs. However, a strong trend stands out: SaaS ERPs are marketed via a subscription that depends on the functional scope to be deployed and the number of users.
To this subscription, integration services must be added, namely data transfer, module configuration, interfaces, training, etc. Thus, on average, the price of an ERP SaaS subscription per month is between 60€ and 140€ per named user. This subscription is strongly decreasing according to the size of the company for reasons of pooling.
The choice of a SaaS ERP must be determined by a medium and long-term strategic vision, taking into account the future development of the company. The acquisition of a more powerful and more efficient solution must be seen as an investment in the future growth of the structure.
This is a major decision, involving software costs, development costs and, sometimes, even training of internal staff in the new SaaS ERP. Therefore, improvements made by the business management system must offset these costs. And this, thanks to a more efficient organization and the optimization of production, which alone are enough to justify the change of ERP. Thus, embarking on the comparison of different ERP solutions necessarily requires taking into account not only the cost, but also the development possibilities and possible investments, which should be supported in the future. Budget comparisons between the different models must imperatively be made over the long term (6 to 10 years) by integrating all the present and unsuspected hidden costs of the solutions installed on site in particular.
It is also interesting to know that the SaaS-type offer provides a tax advantage: investment costs (CAPEX) are replaced by operating costs (OPEX).
To find out more: ERP price: what budget should you plan for your software?
ERP SaaS for SMEs: what are the benefits?
Whether in SaaS mode or not, the benefits of acquiring a SaaS ERP are numerous for SMEs. The ERP provides the company with a global vision of its main flows. In addition, the daily activity of its employees is facilitated because the exchange of information between the various departments is done automatically and in real time.
However, beware of excess! The trend of the 90s and 2000s pushed companies to want ERP to manage all their flows according to their internal specificities, which moved them away from the standard and multiplied the specific ones. You have to be aware that maintaining specific developments is complicated, expensive and often delays version upgrades: this makes the ERP obsolete and not very agile.
The benefits of the ERP SaaS model are multiple for SMEs:
The most obvious advantage and most often sought by ERP SaaS users is undoubtedly mobility: all data is accessible everywhere and instantly. Then, by entrusting the outsourcing of ensof their information system (hardware, operating system and ERP), companies secure their data. The level of security and services offered by ERP SaaS providers is indeed far superior to what companies invest in their architecture when it is managed internally. Companies gain peace of mind and can concentrate on their core business.
Concentrating on its business is all the more important for a growing SME, especially when it has to open new sites in France or abroad, or when it has to deal with a temporary increase in its activity. This increase in load is then facilitated by the absence of technical and material infrastructure to install or configure. Similarly, if the increase in activity results in the arrival of new users: with an ERP SaaS, no installation on workstations or servers is required.
In addition, the acquisition of these new users from the publisher of the ERP SaaS will be facilitated because the subscription to this service is carried out via a subscription which is dimensioned for use. This therefore allows the SME to smooth the load and better control it.
Another benefit: the multi-tenant update. This characteristic of ERP SaaS is essential for business agility and scalability. The latter constantly benefits from the innovations brought by the publisher and has a technologically and functionally innovative environment. Unlike the traditional Client/Server model or Cloud applications, ERP SaaS is not fixed in a version that has become obsolete as soon as it is installed, as IT developments are rapid. Not to mention that the company will save version upgrade services that can represent several tens of thousands of euros every 3 to 5 years and which, moreover, prohibit the use of the application for several hours or even several days.
Finally, the significant interest for the company that uses a SaaS ERP is to be able to complete the functional scope of its tool with a multitude of verticalized web applications that have emerged over the past ten years. The scalability of the ERP SaaS is thus unlimited thanks to its native web technology which allows it to easily interact with other specialized SaaS business solutions (WMS, GED, CRM, HRIS, messaging, etc.). These 100% web solutions are also experiencing significant growth, as confirmed by the Club Decision DSI Barometer, which indicates that nearly 9 out of 10 French CIOs use at least one SaaS application.
As you will have understood, there are many advantages for SMEs that equip themselves with a SaaS ERP. In summary :
- Outsourced IT infrastructure management
- Maximum data security on highly secure infrastructures
- Significant savings over the long term
- Access to advanced features
- Flexible and attractive pricing
- Scalability thanks to the interconnection with verticalized web applications
- Real-time update, easy to scale
- Mobility or even mobiquity (word invented by Xavier Dalloz which contracts the words mobility and ubiquity)
ERP SaaS therefore ensures the agility and scalability of the information system of companies, making it a vector of growth and a source of value for innovative companies.
Archipelia: a SaaS ERP solution specially designed for SMEs
Archipelia, the SaaS ERP for SMEs that we have been publishing for 18 years, is a SaaS solution developed natively on the web for trading, logistics, e-commerce and retail companies. The price varies between €60 and €150 excl. VAT per month per user with access to the ERP brick which includes commercial management functionalities (purchases including large imports, sales and stocks), CAPM, CRM and Accounting. Workflow, GED, Prestashop and Magento e-commerce connector complete the ERP brick.
Two tools are also connected in real time to the base:
- POSia: touchscreen and mobile checkout to manage points of sale
- TCBia: Barcode Terminal application for all peripherals for inventory management (reception, picking, inventory, etc.)
To meet the business needs of companies, the ERP brick is enriched with internet applications that guarantee the adaptation of the information system to the new business needs of companies, while managing data in a unified, centralized way and without interruption of flow. The functional areas of these applications are varied: EDI, Business Intelligence, WMS, route management, after-sales service, recommendation engine, CMMS, shipping management, PLM, datamining, BPM, etc.
Do you have an ERP SaaS project for your company? Don’t wait any longer, contact us!