SaaS vs On-Premises – our take on Forrester’s investigation of the power of cloud for ERP | Unit4
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SaaS vs On-Premises – our take on Forrester’s investigation of the power of cloud for ERP

As you look to replace your legacy ERP systems with more modern platforms, you’re likely to be encountering a crucial question: do we stay with on-premises, or move to the cloud?

SaaS solutions aren’t just “on-someone-else’s premises” options. They’re a completely different approach to enterprise software with their own distinct profile of benefits and challenges.

Let’s look at some of the main benefits of SaaS ERP platforms as described in Forrester’s recent report: Quantifying the Business Value of SaaS DOP Investments.

“SaaS typically beats on-premises on overall business value”

Forrester evaluated the key drivers of benefits, costs, and risks for an organization moving from on-premises ERP to SaaS.

It’s hard for the on-premises options to measure up in business areas like innovation, agility, and user empowerment.

SaaS offers more potential for innovation and agility than on premise apps

When we look at the main reasons firms decide to use SaaS, we see a distinct pattern emerge:

Image showing that improved business agility had a 28% response on important benefits in the Forrecter Analytics Global Business Technographics Software survey on 2019

It’s a close-call, but agility and innovation beat out cost. (You might also notice that the other benefits that rank highly are also related to agility and innovation improvements.)

SaaS platforms have advantages in multiple areas that make them the clear choice for any organization looking to boost their innovation and agility:

Faster deployment. Many SaaS deployments take less than a year, twice or three times as quick as a typical on-prem deployment. That means faster time to value and more potential for innovation.

Frequent automatic updates. SaaS platforms are upgraded automatically by the vendor without need for downtime or extensive planning from customer organizations. Users get the latest feature and regulatory updates as soon as they’re available – with less disruption and less cost.

A single operating version. Since upgrades are managed centrally, every user of a SaaS platform is using the same version of their tools. This makes sharing best practices and even specific approaches and code easier – between employees, partners, and customers - fostering greater collaboration and faster time to value.

Rapid scalability. SaaS solutions allow you to quickly scale into new activities, groups, or regions. But for true flexibility, some solutions also allow you to rapidly scale down as the need arises. This means no more planning for infrastructure needs – your tools can now grow as and when you need them.

Give more power to users. SaaS has the unique capacity to involve your users actively in technology by empowering them to modify their UI, workflow, and reporting environments with one-click customizations. Many of SaaS ERP’s biggest advocates are its users – such as finance and HR executives.

How can we create a business case that shows a relevant ROI calculation for our organization?

1. Account for the size, diversity, and momentum of user populations

Ease of use always matters, but benefits vary based on population. Organizations with large, fluid user populations will reap bigger benefits from the easier-to-use, intuitive design as SaaS solutions.

2. Consider the full value of upgrades and innovations

Seamless, automatic upgrades matter more for some SaaS DOP categories than others. New, rapidly evolving solutions will benefit the most from frequent feature and function enhancements, as will those in areas like security and compliance. 

3. Be ready to reallocate resources based on SaaS replacements of legacy ERP

If you have dozens or hundreds of people running your legacy ERP, you can likely redeploy talent from infrastructure and hardware to innovation and growth activities. Make sure you factor changes (and added value!) like this into your business case.

Keen to know more?

To learn more about how cloud ERP platforms can transform the way your organization does business, check out our wholly cloud native next-gen solution ERPx. You can also access the full Forrester report “Quantifying The Business Value Of SaaS DOP Investments” here and the Infographic summary here.

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Hivkumar Gopolan - Chief Information Officer of Unit4

Shivkumar Gopalan

Shivkumar is a senior professional with core skills in digital transformation, bringing a balance of technical knowledge and human skills to the environment he works in. With deep experience in interacting with business stakeholders, he enjoys driving outcomes, not just programs.