What is SaaS Enterprise Resource Planning (ERP)?
See the industry-leading enterprise resource planning (ERP) cloud solution, serving as your integrated management of business processes and applications, to gain resilience and real-time agility, to position yourself for growth.
Enterprise resource planning (ERP) systems are the backbone of many organizations, helping them manage their accounting, procurement processes, projects, and more throughout the enterprise. For many IT departments, ERP systems have often meant large, costly, and time-consuming deployments that might require significant hardware or infrastructure investments. The advent of cloud computing and software-as-a-service (SaaS) deployments are at the forefront of a change in the way businesses think about ERP. Moving ERP to the cloud allows businesses to simplify their technology requirements and see a faster return on their investment.
Cloud ERP solutions are mature offerings that have all the same features and functionality as their on-premises counterparts. In addition, the cloud deployment model easily enables the integration of other key technologies, such as mobility, decision support systems, and collaboration and social systems. Cloud services are growing in popularity among leading businesses that want applications with modern functionality, but without the overhead of IT infrastructure, maintenance, and upgrades. To ensure the successes of your SaaS ERP system, you can leverage integrated suites and cloud platforms with industry-leading high performance and scalability, unparalleled reliability, and improved security.
Software as a Service (SaaS) allows users to subscribe to and use application software in the cloud rather than having to buy the hardware or license the software. You simply purchase this software from a cloud provider for a monthly subscription fee and the service is delivered to you over the internet. A modern cloud suite provides complete software for your entire business so that you can subscribe to certain SaaS applications for your finance, supply chain, human resources, customer experience, sales, and marketing organizations.
What is SaaS?
Software as a Service (SaaS) allows users to subscribe to and use application software in the cloud rather than having to buy the hardware or license the software. You simply purchase this software from a cloud provider for a monthly subscription fee and the service is delivered to you over the internet. A modern cloud suite provides complete software for your entire business so that you can subscribe to certain SaaS applications for your finance, supply chain, human resources, customer experience, sales, and marketing organizations.
What is ERP?
Enterprise resource planning (ERP) software allows organizations to automate their back office processes and manage day-to-day functions. ERP functions include the following: financials, accounting, procurement, project management, risk management, supply chain management, enterprise performance management (EPM), adaptive intelligence, and analytics.
6 benefits of SaaS ERP versus on-premises ERP
Most financial management systems do a good job of providing dynamic visibility into enterprise data. In the last century, ERP software excelled at capturing very large sets of business data, but had difficulty producing reports. That was then.
Today’s organizations want the ability to put their financial data to use to improve profitability, streamline operations, and improve decision-making. In recent years, capabilities for reporting and other data output and monitoring have become much more important to organizations. Reporting requirements for financial management systems have rapidly evolved to keep pace with that demand.
At a minimum, all companies need reports that cover month-end close, quarter close, and annual close, along with basic financial statements for income, expenses, and balances. While these outputs were always available, it wasn’t easy to adjust these reports or add derivations for other needs.
In our fast-paced business environment, the ability to generate prebuilt reports as well as easily create ad-hoc outputs, isn’t just something that’s nice to have—it’s a critical requirement for financial management systems software. Add in requirements for in-depth data analysis, information visualization, more operational visibility, and narrative reports, and companies quickly discover that their ERP software solutions need to easily work with advanced reporting systems like enterprise performance management (EPM) solutions.
From its inception, the SaaS model was designed to deliver a core set of business benefits versus traditional, on-premises ERP solutions. These modern business benefits include:
| Lower upfront costs |
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| Predictable, ongoing costs |
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| On-demand scalability |
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| Faster time to value |
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| Increased innovation |
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| Support for globalization strategies |
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Comparing financial models and cost of ownership
ERP Model |
On-Premises ERP 1.0 |
Cloud ERP 2.0 |
|---|---|---|
| Business Financial Model Capital expenses for on-premises ERP systems divert funds from important business growth needs and often incur taxes. | Cap-Ex Up-front purchase |
Op-Ex Monthly Subscription |
| ERP Software On-premises software requires up-front purchase and taxes; cloud ERP leverages operational expenses month-to-month. | $ | All included. No additional hidden costs. |
| ERP Software Maintenance On-premises ERP requires annual maintenance fees to be current with security fixes, critical patches, and updates. | $ | All included. No additional hidden costs. |
| Hardware for ERP Software On-premises ERP requires additional capital expenses; hardware typically needs physical uplift every 3 to 5 years. | $ | All included. No additional hidden costs. |
| Hardware Maintenance On-premises ERP hardware often requires annual maintenance fees or contract, high-cost space, utilities, and staff. | $ | All included. No additional hidden costs. |
| Database for ERP Software On-premises ERP systems need an on-premises database which often requires staff and contractors for deployment. | $ | All included. No additional hidden costs. |
| Database Maintenance On-premises ERP requires annual maintenance fees and staff to keep the ERP database secure, current, and optimized. | $ | All included. No additional hidden costs. |
| System Upgrades On-premises ERP system upgrade projects cost $100K to over $1M per project every 3 to 5 years for software and hardware. | $ | All included. No additional hidden costs. |
| System Security All on-premises ERP systems have additional costs for security software and monitoring with staff to monitor and maintain. | $ | All included. No additional hidden costs. |
| System Disaster and Recovery All on-premises ERP systems have large costs for disaster and recovery plans, infrastructure, services, staff, and redundancy. | $ | All included. No additional hidden costs. |
What to expect from a modern SaaS ERP
Today’s modern SaaS ERP systems use advanced technologies to automate processes and boost efficiency where and when it matters, especially in times of uncertainty. To get some insights into how cloud-driven innovation is transforming business operations, Oracle and Enterprise Strategy Group (ESG) partnered to conduct a 2020 global survey (PDF) of 700 finance and operations managers and executives. The survey revealed and found that: “91% of all respondents say SaaS is an enabler of new technology adoption within finance and operations applications.” These technologies include:
AI
Intelligent enterprises use artificial intelligence (AI) that is prebuilt into their modern SaaS ERP applications to help them automate operations, drive innovation, and make smarter decisions. The ESG survey results indicate that “incorporating AI into ERP systems can yield a 36 percent drop in errors and reduce the time it takes to close the books by 3.5 days.”
Digital Assistants
Digital assistants, such as chat bots, make it easy for ERP to interact with many other systems, increasing employee productivity by guiding customer and employee support tasks, providing instant responses, delivering faster analysis, and making smart recommendations. The ESG survey results show that “Companies using chatbots had an average 36% productivity improvement, 38% faster analysis, and 65% of respondents said conversational technologies are streamlining forecasting and reporting processes.”
Internet of Things (IoT)
By enhancing an ERP application with rich, real-time information from streaming IoT data, your organization can gain more visibility, insights, and efficiencies using smart manufacturing, predictive maintenance, connected logistics, workplace safety, and connected customer experience. ESG survey results indicate that “Organizations have shortened their time to produce/fulfill orders by an average of more than six business days as a result of incorporating IoT data into their supply systems and workflows.”
Blockchain
When the pace of business requires secure collaboration with multiple parties, you need a solution to bring everyone together—in real time—to share data. Blockchain provides a collaborative framework for sharing reliable data. According to the ESG survey, “42% of respondents state that automating routine monitoring tasks is the most critical advantage of Blockchain applications.”
Learn about Blockchain products
Find out more about AI, digital assistants, IoT, and blockchain technologies that are built directly into Oracle SaaS ERP applications. Today.
Cloud ERP: Top 10 signs it is time for a modern financial system
There is no argument that legacy ERP 1.0 systems deliver significant horsepower to run your organization, set customer experiences, and directly impact how you fare against competitors. However, you need to consider the technological and generational changes taking place in your business and how your current on-premises environment could be holding you back.
Now that you know the benefits of a modern SaaS ERP application, how do you know when it is time for your organization to make the switch? Below are top 10 indicators:
Finance systems need an upgrade
Your on-premises system requires an expensive investment as it ages past support dates.
Increased dissatisfaction with usability
Employees complain about usability and ask why their ERP isn’t like their smartphone apps.
Increased reporting challenges
Management reporting is too cumbersome.
Business applications require new hardware
Your physical ERP infrastructure is past due for an expensive capital replacement.
Maintenance costs are increasing
System fees and services costs increase annually.
Rapid and global company growth
International expansion, acquisitions, and market growth are hampered by your current back-office applications.
New compliance requirements
Increasing financial and compliance requirements impact your enterprise.
Business demands increase
Your business cannot keep up with increasing demands.
Time for an IPO
You are ready for a public offering which mandates stringent financial information and controls.
More nonintegrated systems and disparate data
Growth in disconnected systems and enterprise data give conflicting answers to key questions.
7 steps to deploy a cloud ERP system
Once your organization has made the decision to shift to a modern, SaaS ERP system, you may be wondering what’s next? Below are 7 steps to get you started:
Clearly define project goals
Establish KPIs that measure business benefits, such as productivity, financial close speed, and infrastructure costs. Measurable items build project consensus and approval, keep track of your strategy build, and provide a baseline to assess success at milestones.
Document processes and inventory systems
Map your complete IT infrastructure, including internal and third-party solutions and their integration points, plus redundant systems. Include your organizational structure to understand roles in conjunction with data ownership, management, and use. It is also critical to define a single source of truth strategy before starting your project.
Get strong executive sponsorship
Regardless of company size, executive sponsorship is critical. You need continuous executive support throughout your entire project. Coupled with ongoing employee communication, highlighting the leadership commitment to your new cloud ERP system will help drive success.
Select an implementation approach aligned to the organization
A journey to cloud ERP will vary by organization, and does not require deploying cloud ERP applications simultaneously. Many companies choose to incrementally adopt high-value cloud services that will exist alongside their on-premises solutions, resulting in a hybrid environment. While other companies start a modernization journey with core ERP applications, building towards a complete end-to-end transformation.
Embrace standard best practices present in the application
Modern best practices are built into cloud applications, so you can replace legacy software along with outdated processes and approaches. ERP 2.0 delivers more than 80 percent of common business processes you need with built-in standardization—the perfect place to start your project.
Study reporting and analytics early
With cloud ERP, users understand your business in real time, with advanced multidimensional analysis and data visualization providing insights quickly with no reliance on a data warehouse. Define reporting and analytics needs early in the project plan. Once live, you can quickly generate meaningful reports.
Involve users and process owners from the start
Users of ERP systems determine the success of your project. Throughout your implementation, include demonstrations and tests at regular intervals.
Take an ERP product tour