Today, distributors have the advantage of being able to choose from either traditional, in-house ERP systems or the new SaaS and Cloud ERP systems to best run their distribution businesses. With this choice, distributors are provided with a new option that can successfully handle the complexities of distribution, but without the traditional on-premise IT infrastructure in place. For many small-to-mid-sized distributors, SaaS and Cloud-based ERP systems offer features and capabilities available to billion dollar companies as an affordable price.
SaaS is a business model that enables businesses to outsource the responsibility for the technical operation and maintenance of their ERP system. A SaaS model provides predictable recurring payments and allows distributors to focus on their business while letting an expert organization focus on running the ERP solution. Cloud computing is new technology that provides hardware and operating system efficiencies, making it easier and less expensive to run applications and offer SaaS solutions.
Because there are no upfront application and hardware costs to run the system, and no IT infrastructure to maintain. There is also the benefit of shorter rollout times for new functionality from the SaaS provider, allowing distributors to take advantage of new capabilities sooner. Distributors can also pay for just what they use, making it easy to scale up or down based on demand.
But there are also concerns: One of the most common is that there is a lack of security due to the fact that the distributor’s data, computing and applications are not in-house. Some distributors also believe that they will not be able to customize their applications, and worry that their application functionality can change without notice.
Other worries include not being able to interface with other important in-house or web-based software products needed by the company and the risk of being locked into rising fees from the vendor hosting the ERP - or paying for it as long as there is a need for the ERP system.
Finally, some believe that it may be hard to get data back from the host provider if needs change.
The good news, however, is by simply asking the right questions, it's possible to find the best possible solution to meet the needs of a business, without many of the conerns:
- Does the solution offer a true web interface?
Critical benefits such as access from anywhere, rapid enrollment, elimination of client software, platform independence (PC/Mac/Linux), and mobile device access are delivered by a web-interface. A ‘true’ web interface means that 100% of your features are available through a standard browser, not just selected features enabled through a web portal.
- Is there a choice of deployment?
Can the vendor provide both a SaaS offering and/or the option to deploy the Cloud ERP on-premise, creating a “private” cloud within the distributor’s business in order to keep their data, applications and computing in house? Can they also host the solution on a virtual or dedicated server of the distributor’s choice? These options lower the security risk perception for those distributors not wanting to process on the web.
- Is it possible to switch from SaaS to on-premise?
As a company's needs change, will the vendor allow the it to change from a SaaS deployment to an on-premise deployment and back? This would be helpful if there is a concern about the monthly payment going higher over the course of the subscription or the distributor does not want to continue to pay a monthly fee for as long as there is a need for an ERP solution. This also eliminates the perception it will be hard to get their data back if there is a change in their ERP plans.
- How easy is it to customize and integrate the solution?
Because every system should match the way the company does business, how easy it is to customize logic and screens? Some SaaS vendors allow only small changes, while other vendors provide ERP solutions that are easily customized, even by non-programmers. It is also important to know how the customized areas are impacted by system upgrades. Also, ask how easy it is to interface with other on-premise or web-based systems that the company needs.
- Does the provider offer unlimited users without additional costs and capacity constraints?
Determine if the SaaS and Cloud vendor allows the addition of other people on the system without additional costs. Some SaaS and Cloud vendors will charge for additional people, while others provide unlimited number of users that can be easily added to the system by an in-house authorized person. Make sure that the solution can scale quickly and verify that you don’t need to purchase additional hardware as users are added.
- How are data controls and security provided?
Ask not only how it is provided, but also if it meets the physical, transmission, storage, access, data, and application security needs of banks, health-care, and government organizations. Are the security features such as access controls, data encryption, and server based processing built into their system?
Today, SaaS and Cloud vendors are successfully addressing distributor perceptions and when asking the right questions, distributors can find a system that successfully matches their needs. It is why SaaS and Cloud computing has become a viable choice for the distributor’s ERP selection.
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