ERP is an enterprise-wide set of management tools used to integrate an organization’s business processes. An ERP solution would strive to balance supply and demand within an organization and can integrate the entire value chain. An ideal ERP system offers deep functionality and tight integration between the store, back office, and operations of a company, which may include finance, sales, procurement, manufacturing, inventory management, quality management, product design, and human resources.
The biggest benefits are the consolidation of multiple systems into one and improved visibility across the enterprise. Some of the main advantages that a typical ERP system offers are:
o Better visibility and transparency
o Better and more effective communication
o Reduced stock levels
o Reduced lead times and cycle times
o Reduced wasted effort
o Consolidated source of information
o Improved planning and forecasting
o Reduced costs
What is SaaS?
Wikipedia defines it as.
Software as a Service (SaaS, usually pronounced “Sass”) is a software delivery model in which an application is hosted as a service that is delivered to customers over the Internet. Since the application no longer needs to be installed and run on the customer’s own computer, SaaS relieves the customer of software maintenance, ongoing operations and support.
A recent forecast by Gartner predicts that by 2012 at least one-third of business application software spending will be on service subscriptions rather than product licenses. The analyst firm also predicts that by 2010, 30% of new software purchases in Asia Pacific will be delivered via an application utility or SaaS (Software as a Service) model.
Organizations are finding it increasingly difficult to manage the complexity of their growing systems and networks. They are typically time and resource consuming and combined with high operational costs and lack of operational costs present a formidable challenge to monitor and manage the complex and dynamic IT infrastructure environment.
The benefits of deploying an enterprise solution on a SaaS model are many.
SaaS ensures low cost, scalability and anytime, anywhere access, eliminating the need for upfront investments and internal IT resources and additional infrastructure.
This is particularly useful for organizations that have poor IT infrastructure and resources, and this is especially true in the Indian government sector.
Typically, the ERP application is hosted on a server in a secure data center in a SaaS model, with the relevant data backed up with robust internet bandwidth and 24×7 support.
Let’s take the case of organizations in the process of automating their supply chain. The enormous costs of providing the complex IT infrastructure and the server banks at its end can be prohibitive. Productivity improvements can be significant as they can connect to their delivery base in real-time.
An ERP solution on a hosted model can be a very affordable and reliable option.
The application is accessed over the Internet by users who have their specific user roles defined.
The perfect recipe for success is a “tailor-made” ERP solution delivered on a SaaS model.
According to Springboard Research, the overall market for ERP and supply chain management (SCM) applications is expected to grow, rising from $14 million in 2006 to $70 million in 2010.
ERP delivered via the SaaS model is expected to grow rapidly in India, especially in the SME sector.
Software as a Service will play a significant role in the future of business software.