What are the Differences Between SaaS ERP and Cloud ERP?

Modern businesses require advanced technological solutions. Enterprise Resource Planning or ERP is one such tool used by businesses to manage and integrate different day-to-day activities.

The secret to the success of any ERP is its power to integrate different processes at one platform. Hence, teams can manage the entire process seamlessly and precisely. Do you know that the ERP market is set to cross 49.5 billion USD by the end of 2025?

ERP solutions have evolved over the years, and hence there are multiple options for businesses to choose from. The top two contenders are SaaS ERP and cloud ERP. It is easy to get confused in making the ideal choice for your business.

So, today we bring a detailed review of SaaS ERP vs. cloud ERP, starting with all details about them one by one. It is followed by a head-to-head comparison based on features, functionality, affordability, advantages, etc., to help businesses make the ideal choice for their requirements. Let us start with SaaS ERP.

What is SaaS ERP?

The ERP services hosted on the provider’s location come with regular multitenant updates. It only requires username and passwords for quick access by your team from any remote location. SaaS ERP solutions can be accessed on any smart device. Like any other ERP solution, SaaS-based services can cover all different segments like accounting solution, production management, HR system, sales, etc.

The ease of using SaaS services on monthly, per-user subscriptions and distribution through the internet is a key characteristic for modern businesses. These services come with vendor services for all system updates and are beneficial for companies requiring customization ERP.

Features of SaaS ERP Software

After knowing all about the SaaS ERP definition, it is important to go through the main features of these services. Some of these key features include:

• The key requirements of any SaaS ERP include multi-tenancy, management & hosting by ERP vendor, and subscription pricing.
• The service vendor is responsible for system maintenance, upgrades, patches, hardware maintenance, software maintenance, etc.
• These services are sold through the subscription model and delivered over the internet.
• It uses a multi-tenant SaaS architecture where different purchasers use the same software, copy, infrastructure, database, or instance, etc., while ensuring high levels of data security.
• All the features of SaaS-based ERP services are standardized, and there is a lack of customization features.
• The single-tenant mode of SaaS ERP ensures that all users get an individual instance of the database and software. This model further allows full control of customization and updates.
• SaaS ERP solutions can effectively offer adherence to the government regulations related to data security and data privacy.
• All the program codes of SaaS-based solutions are small, highly streamlined, and have new versions with the least features.
• Businesses can go for the additional layer of multi-tenant infrastructure that allows custom extensions programming.
• There are options to choose from the single code base or prepackaged specialized applications that offer detailed customization features.
• It is widely used in customer relationship management system over any other ERP solution.

Advantages of SaaS ERP Solutions

With more than 64% of the total ERP users preferring ERP software as a service, it is important to know ERP key benefits. Some of these are:

• These ERP solutions are free from capital expenses. Businesses can pay according to the number of users without paying for unnecessary services. The highly predictable operating expenses ensure that businesses don’t have to spare extra budgets for the capital investment in ERP solutions.
• SaaS ERP solutions’ modern and intuitive user interface ensures that business teams can use it without any difficulty. It further helps businesses increase adoption and improve system functionality.
• It offers complete functionality for the business needs like HR, accounting, supply chain, customer relationship management, etc., under one roof only. Hence, teams don’t have to juggle different platforms to manage business functions.
• SaaS ERP software is the need of the growing businesses with scope for technological advancements shortly. All the required upgrades and security patches are automatically implemented without any issues to the business. Hence, companies can benefit from the advanced features without losing time in downtime.
• Any business projecting scalability can go for the SaaS ERP. There is no need to invest in hardware and other technology when the SaaS services can work for your business. Further, it works if a business has to shed extra employees at some time in any revenue cycle.

Possible Issues With SaaS ERP

No technology can fulfil all business needs, and hence SaaS ERP comes with its limitations. It is crucial to understand these issues and manage them while using this ERP.

• The costs of SaaS ERP increase when the businesses go for increasing the workforce. These costs can go exponentially high over the cloud software costs when the workforce increases over time. Hence, the businesses need to look at the projected costs and growth over the service years.
• The security standards used in the SaaS ERP may compromise with the compliances required in the highly regulated markets. Hence, it is important to have a detailed look at the security standards of ERP service providers. Further, businesses going for these services must check for the strict organizational rules for security standards.
• It becomes difficult to accommodate the universal SaaS solutions’ specific business processes or operations. Hence it is ideal for the SaaS ERP service providers that offer customized solutions according to business needs.

What is Cloud ERP?

ERP solutions completely hosted in the cloud technology are the Cloud ERP services. These solutions are highly commercial and flexible according to the business needs. If any business wants to explore cloud technology, these ERP solutions are ideal for any department in the company.

Like any business knows the power of the cloud in turning productivity and total revenue, the power of remote servers is immense. Businesses only need internet connectivity to access the cloud ERP.

Features of Cloud ERP software:

Cloud-based ERP is easy to understand, and hence the key features can be adopted by any business accordingly. Some of these features include:

• There are options for the businesses to go for the offsite data center accessed over the internet using the dedicated software.
• The single-tenant cloud ERP offers the company to manage software, maintenance, upgrades, etc.
• It offers an essential track of the customer profiles and interaction for smooth customer management, especially for small businesses.
• It is easy to finalize and manage different order quotes, order creation, and other updates on a single platform using cloud technology.
• Cloud ERP helps businesses extract catalog and other products information effectively on one platform. Hence, it helps businesses keep track of everything related to catalog management.
• All pricing-related data can be tracked using the price management feature of the cloud ERP services.
• It helps businesses update all inventory data quickly without issues in managing spreadsheets. Hence, real-time data can be used to manage stock levels.
• It can handle multiple customer issues with quick tracking and issue resolution accordingly.
• The account management feature of the cloud-based ERP software ensures that all invoices and payments are managed properly. Further, it offers email notifications that can work as payment reminders.
• This form of ERP solutions can help create and control marketing campaigns intuitively when it comes to marketing management.
• It offers powerful business analytics that can quickly and easily create decision-making reports. It helps businesses make informed decisions.
• All cloud ERP solutions offer a self-service portal to the customers that are easy to use and offers great customer experience levels.

Advantages of Cloud ERP Solutions

Cloud ERP solutions are used by more than 53% of global ERP users. The popularity of this solution can be matched with the key benefits offered that include:

• The cloud ERP ensures that businesses get the new methods and technologies without any additional benefits. It is ideal to stay updated using the cloud solutions that help receive upgrades and top features on ERP for businesses.
• Outsourcing ERP solutions can help businesses manage their deals more confidently without hampering maintenance issues. Any big and agile business can deviate from the ideal workflow with the mess of hardware and software maintenance. Hence, businesses focusing on specific work processes can go for cloud ERP solutions. The local data storage can create issues for the businesses that require timely maintenance, disaster recovery solutions, etc. Partnering with the cloud ERP ensures that companies don’t have to go for the unnecessary maintenance of the resources while it is managed by the service provider only.
• The cloud technology used in the ERP solutions ensures quick information transfer over the internet. Hence, it is possible to send information across distances without worrying about networking or server security. All the documents between businesses can be shared confidently using cloud ERP solutions. Further, the data security is managed by the company only.

Possible Issues With Cloud ERP

Like any other technology, Cloud ERP solutions also have their limitation. Some of the possible issues with this type of ERP solution that needs to be taken care of include:

• It has limited capabilities in offering flexible ERP solutions according to business needs. Hence, it is important to go for the service providers that offer good features customization options according to business.
• There are a couple of challenges regarding hosting and customer information access in cloud ERP solutions. Hence, businesses must comply with the required HIPAA and GDPR guidelines by services providers before connecting with them.
• The complete control of data and security management shifts to the cloud service provider. Hence, businesses must look for service providers that offer absolute control over the business data and security features.
• Businesses coming from the on-premise ERP solutions face difficulty migrating the data to the cloud solution. Hence, it is crucial to go for the service provider that offers detailed data migration solutions.

SaaS ERP vs. Cloud ERP

After having details about the individual entities- SaaS and cloud-based ERP solutions, it is time for a showdown of SaaS ERP vs. cloud ERP.

Any business looking to shift from on-premise ERP solutions can swiftly move to cloud ERP solutions. Companies having unusual business models and large businesses can trust the powerful features of cloud ERP. Such companies using cloud-based ERP technology can have great control over the software with an in-house IT team. All the system improvements, upgrades, patches, etc., can be managed by the service companies according to their current needs.

Any business looking for quick ERP implementation can go for SaaS ERP solutions. The cutting edge of these solutions includes low initial costs, unlimited scalability, etc. Further, businesses having limited time and budgets can go for SaaS solutions. These companies can have great cybersecurity features with SaaS services that give an additional layer of security over other ERP options.

To cut short, any business with a unique working model can go for the cloud ERP for customizing their business needs. On the other hand, SaaS ERP is a fit for businesses that don’t require detailed, customized ERP solutions.

The IT expenses, business partner connectivity, and mobility are increased for cloud ERP solutions. The closest competitors- SaaS-based solution allows full control to the companies. Hence, SaaS solutions for ERP are perfect for businesses that aim to offer top services in highly competitive markets.

The cloud ERP solutions ensure accessibility, keep the cost down, and offer flexibility in accessing data across boundaries. Businesses can give a major boost to their productivity without compromising security with cloud ERP software. SaaS ERP is a synonym for the businesses that want ready-to-go ERP solutions with quick implementation. There is no need to pay for the unnecessary on-premise solutions when businesses can go for the pay-per-user model of SaaS services.

Wrapping Up:

More than 93% of organizations reported ERP implementation as successful in last year. Hence, any business can go for this powerful technology available at affordable prices. The advanced features of the SaaS ERP and cloud ERP make them a top priority of any small business, medium business, or large business. While both are equipped with the hulk features ideal for overall business management, the key differences are the decision-makers.

Cloud ERP is perfect for businesses having special customized requirements, while the SaaS ERP works well for businesses that don’t need detailed, customized features. SaaS ERP is a subscription-based model, while cloud ERP offers on-premise ERP solutions.

Any business shouldn’t feel confused about selecting their ideal partner out of SaaS ERP vs. cloud ERP. It has already improved the business process improvements of more than 95% of companies. Further, it is easy to know about both ERP options, their advantages, and their disadvantages. It all comes down to the due diligence conducted by the businesses in selecting their ERP partner out of SaaS ERP or cloud ERP.