SaaS ERP vs. traditional ERP

Traditional and SaaS ERP are two types of ERP software solutions that each come with their own advantages. To determine which solution best suits your business needs, it's important to look at the key differences between traditional ERP and SaaS ERP. 

What is ERP?  

An enterprise resource planning (ERP) system is a software solution that manages and automates core business processes. It allows companies to streamline operations, improve efficiency and make data-driven decisions. ERP systems typically include modules for various functions such as finance, human resources, supply chain management and customer relationship management. 

Traditional ERP: On-premise solution 

Traditional ERP systems are on-premise solutions requiring companies to install the software on their in-house servers and manage it internally. These systems often involve significant upfront hardware, license and implementation costs. Companies are responsible for maintaining and upgrading the software, which can be time-consuming and expensive. 

However, traditional ERP systems offer companies greater control and customization options. Companies can tailor the system itself to their specific needs and have direct access to their data. They also have the opportunity to integrate the ERP system with other on-premise applications and systems. 

Larger organizations typically favor on-premise ERP solutions with dedicated IT teams and infrastructure. 

SaaS ERP: Cloud-based solution 

On the other hand, SaaS ERP is a cloud-based solution where the software is hosted and maintained by a third-party provider. Companies access the ERP system via the internet, eliminating the need for any on-premise servers and infrastructure. SaaS ERP systems are subscription-based, and companies pay a fee (usually monthly or annually) for using the software. 

Cloud-based ERP solutions offer several benefits: lower upfront costs, faster implementation as well as automatic updates and maintenance. They are scalable and flexible, allowing companies to easily add or remove users and modules as their business needs change. Users can access SaaS ERP systems from anywhere or on any device with an internet connection, which makes cloud-based solutions ideal for remote workers or distributed teams. 

Small and medium-sized businesses often prefer SaaS ERP solutions to avoid the upfront costs and IT requirements associated with traditional ERP systems. 

Comparing features and functionality 

When comparing Traditional ERP and SaaS ERP, it is essential to consider each solution's various features and functionality. 

Traditional ERP systems typically offer extensive customization options and the ability to integrate with other on-premise systems. They may have more advanced features and robust reporting capabilities. However, these systems require dedicated IT resources for maintenance and upgrades. 

SaaS ERP systems, on the other hand, may have limitations in terms of customization, but they offer ease of use, scalability and automatic updates. They can also integrate with other cloud-based applications, like customer relationship management (CRM) platforms. SaaS ERP solutions often have user-friendly interfaces and intuitive workflows. While they may not have the same level of customization as traditional ERP systems, they are constantly evolving and making improvements based on user feedback. The scalability and opportunity for further development make SaaS ERP solutions an excellent option for future-proofing your business.  

Overall, when comparing functionality, businesses must assess their specific needs and prioritize the most important features. 

Choosing the right ERP solution for your business 

Choosing the right ERP solution for your business depends on several factors, including your budget, business size, industry and specific requirements. 

If you have a large organization with an established IT infrastructure and the need for extensive customization, a traditional on-premise ERP system may be the right choice. However, be prepared for higher upfront costs and ongoing maintenance expenses. 

A SaaS ERP system may be more suitable if you are a small or medium-sized business looking for a cost-effective and flexible solution. It offers scalability, ease of use and access to your ERP system from anywhere. 

Ultimately, an organization should decide between traditional ERP and SaaS ERP after thoroughly evaluating business needs and considering the advantages of each solution. 

Kerridge Commercial Systems (KCS) offers both traditional on-premise ERP systems as well as SaaS or cloud-based ERP solutions so that businesses can choose the best system for their unique requirements. Book a free live demo to discover the difference between traditional ERP and SaaS ERP software, or contact us today!