24 July 2024

What is SaaS ERP (Image by Octobits)

Octobits Blog – In today’s fast-changing business world, it’s important to know what SaaS ERP is and how it’s changed enterprise resource planning.

SaaS ERP, or Software as a Service Enterprise Resource Planning, is a cloud-based solution that provides ERP software over the internet, so you don’t need on-premises infrastructure.

SaaS ERP is like a company’s central nervous system, integrating functions like accounting, inventory, customer relationship management (CRM), human resources (HR), and supply chain management.

This model has seen significant growth and adoption due to its flexibility, cost-effectiveness, and scalability.

Over the last five years, SaaS ERP has become integral to many businesses’ strategies to improve operational efficiency and adaptability in a competitive market.

Let’s take a moment to unpack the bigger picture.

SaaS ERP Definition

SaaS ERP (Software as a Service Enterprise Resource Planning) is a suite of integrated applications hosted on a remote server and accessed via the internet.

In contrast to traditional on-premises ERP systems, SaaS ERP operates on a multi-tenant model, wherein multiple organizations share the same software instance and infrastructure.

This set-up means that vendors can handle all the updates and maintenance, so users always have access to the latest features and security enhancements.

Plus, SaaS ERP also means companies don’t have to buy and maintain their own hardware and software infrastructure, which frees up valuable IT resources.

Kindly refer toTypes of SaaS Software for Every Business Requirement: A Straightforward Guide,” for details on various types of SaaS.

Key Features of SaaS ERP

There’s no doubt about it: using SaaS ERP means you’ll have access to everything you need to get the job done.

SaaS ERP lets users access real-time data and insights from any device with an internet connection. Yes, SaaS ERP means broader accessibility.

Then, scalability is another big deal. It lets businesses adjust their ERP resources as needed to accommodate growth or downsizing without having to make significant infrastructure changes.

Then, of course, the SaaS ERP model is cost-effective because it’s a subscription-based model, so there’s no need to make a big upfront investment in hardware and software.

This model turns capital spending into operational spending, which makes it easier for businesses of all sizes to manage their finances.

Plus, you can customize the system to fit your specific workflows and processes, so the ERP solution will meet your unique operational needs. 

Then, think about how the vendor’s automatic updates keep the system up to date with the latest features and security enhancements, without any extra costs or downtime.

With all these features, it means the integration capabilities are pretty solid, so you can connect with other cloud-based apps and services with ease.

This integration makes business processes more efficient by allowing different systems to work together in a unified way.

Plus, you can access it on your phone, which is a big plus.

This is especially useful for employees who travel a lot or work remotely, as it means they can access critical business functions whenever they need to.

And we’ve got real-time reporting and analytics, which are essential for businesses that need to make informed decisions based on up-to-the-minute data. 

How SaaS ERP Differs from On-Premises ERP

Sure, SaaS ERP systems are more flexible and scalable than traditional on-premises ERP. So, let’s compare the two.

Deployment Differences

SaaS ERP is hosted in the cloud and accessed via the internet, so there’s no need for physical servers or complex installations.

With on-premises ERP, you have to install it on your own hardware, which your company’s IT staff manages.

This big difference means that SaaS ERP can be set up much faster and doesn’t require as much infrastructure.

SaaS ERP can usually be deployed in 3 to 6 months, compared to up to 12 months for on-premises systems.

Maintenance and Support

With on-premises ERP, you’re responsible for maintenance, updates, and troubleshooting, which often means you need a dedicated IT team.

This can be pretty time-consuming and expensive. With SaaS ERP, the vendor takes care of all the maintenance, including regular updates, security patches, and support.

This means that your internal IT resources don’t have to worry about it, and you’re always up to date without any extra costs.

Cost Implications

On-premises ERP systems can be pretty expensive upfront, with costs for hardware, software licenses, and ongoing maintenance.

These systems are usually seen as capital expenditures. SaaS ERP, on the other hand, is a subscription model, so you pay for it over time as an operational expense.

This model gets rid of a lot of hidden costs that come with hardware upkeep and system upgrades, making it a more cost-effective solution for many businesses.

Benefits of SaaS ERP

With a cloud-based model, SaaS ERP eliminates the need for extensive IT infrastructure and management.

This lets you focus more on core business rather than on maintaining IT systems. It also means you don’t need a big IT team or spend a lot on hardware.

With SaaS ERP, you can access ERP functions from anywhere with an internet connection, which is great for supporting remote workers and keeping the business running smoothly.

This accessibility lets employees work efficiently from anywhere, which boosts productivity and operational efficiency.

SaaS ERP systems are much faster to deploy than on-premises solutions. SaaS ERP can usually be up and running in a few weeks, whereas traditional ERP systems can take several months. 

Security is another big plus for SaaS ERP. Vendors usually offer solid security measures, including data encryption and regular security updates, which help keep sensitive business data safe from breaches. 

One of the best things about SaaS ERP is its scalability. With SaaS ERP, you can easily adjust your ERP resources to match your current needs without making a big investment.

This scalability is especially useful for growing businesses or those with changing demands.

Plus, the vendor keeps things fresh with regular updates and new features.

This means you always have access to the latest technology and improvements, which helps them stay competitive and efficient.

Also, you can read Benefits of SaaS is Your IT Team’s Best Friend to Ditch the IT Headaches,” for a more in-depth look at SaaS.

Challenges of SaaS ERP

In Björn Johansson and Pedro Ruivo’s paper, “Exploring Factors for Adopting ERP as SaaS,” we get a good look at the hurdles associated with adopting SaaS ERP systems.

One of the main challenges is data security and confidentiality. The study found that many people are concerned about the safety and privacy of their business data, since it’s stored off-site and managed by third-party vendors.

Customers often have concerns about the legal implications of data breaches, particularly when sensitive information is involved.

Another challenge is that the system relies on a stable and reliable internet connection.

SaaS ERP needs to be connected to the internet all the time to work properly, which can be tricky in places with unreliable internet connections.

Also, customers are worried about losing control of their systems. With SaaS ERP, the vendor handles updates and changes, which can sometimes mean less customization and control than with on-premises solutions.

This change can be a bit unsettling for businesses that are used to having direct control of their ERP systems.

Another thing that can be tricky is system usability. Switching from on-premises ERP to SaaS ERP might mean getting used to different user interfaces and workflows.

Customers may have to learn a few new tricks as they adjust to new systems and processes, which can temporarily disrupt business operations.

The research shows that switching to SaaS ERP is usually less complicated than going with traditional ERP, but it still needs to be done right to make the transition go smoothly.

Implementing SaaS ERP in Your Business

If you’re thinking about implementing SaaS ERP in your business, it’s important to understand that it’s not a one-step process. 

Johansson and Ruivo’s research says that it’s important to start with a thorough needs assessment to understand your business requirements and goals.

This helps you choose the right SaaS ERP solution that works for your business.

One of the first things you need to do is choose a reputable vendor with a proven track record in delivering reliable and secure SaaS ERP solutions.

It’s important to choose a vendor that provides good support and has clear service-level agreements (SLAs) in place. This helps to ensure that the system keeps working well and that any issues are fixed quickly.

Migrating data is an important part of the implementation process. It’s about moving all your existing data from your on-premises systems to the cloud-based ERP.

This step requires a lot of planning to make sure the data is kept safe and that there’s as little disruption as possible.

Using the data migration tools and services provided by the ERP vendor can make the transition go more smoothly.

Another important part of the implementation process is customization and integration.

If you tailor the ERP system to match your specific business processes, it’ll fit seamlessly into your operations.

Also, connecting the SaaS ERP to other existing software, like CRM and supply chain management systems, makes everything run more smoothly and efficiently.

Training and support are really important for getting the most out of SaaS ERP. It’s important to provide comprehensive training for employees so they’re well-versed in using the new system.

The vendor should be there for you after you’ve gone live, helping you with any issues that come up. That way, the system will run smoothly and effectively.

How Octobits Can Help You Manage Different Types of SaaS Software

So, as you may have guessed, implementing SaaS ERP means juggling subscriptions, usage tracking, and ensuring cost efficiency, which often leads to scattered data and a lack of clear oversight.

That’s why we at Octobits offer you a centralized control over your diverse SaaS applications, so you can make informed decisions based on real-time insights.

Our platform does more than just collect data. We give you actionable analytics that help you make the most of your SaaS investments, identify underutilized licenses, and plan for future spending.

This lets you make the most of your software resources, so that every dollar spent helps you reach your business goals.

If you’re interested in learning more about how Octobits can help you manage your SaaS, we invite you to explore our website.


The cloud makes it easy for businesses to adjust their resources as needed with SaaS ERP. No big capital investments or extra strain on internal IT teams are needed.

This newfound agility not only makes operations easier but also allows businesses to react quickly to market changes, keeping them competitive.

With that in mind, let’s go back to the question we started with: what is SaaS ERP? It’s not just software. It’s a strategic tool that can reshape how your business operates.