ERP is an enterprise-wide set of management tools used for integrating the Business operations of an organization .An ERP Solution would endeavor to balance supply and demand within a company and can integrate the entire value chain. An ideal ERP system provides deep functionality and tight integration between the Business, Back office and Operations of an enterprise which could include financial, sales, procurement, manufacturing, inventory management, quality management, product design and human resources.
The major areas of benefit are consolidation of multiple systems into one and the improved visibility across the company. Some of the Key Benefits that a typical ERP system provides are
o Better Visibility & Transparency
o Better and Effective Communication
o Reduced Inventory levels
o Reduced Lead and Cycle Times
o Reduced Wasted Efforts
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, typically pronounced ‘sass’) is a model of software deployment where an application is hosted as a service provided to customers across the Internet. By eliminating the need to install and run the application on the customer’s own computer, SaaS alleviates the customer’s burden of software maintenance, ongoing operation, and support.
A recent prediction from Gartner suggests that at least one-third of business application software spending will be on service subscriptions rather than on product licenses by 2012. The analyst firm also predicts that by 2010, 30% of new software purchases in the Asia-Pacific will be delivered via an application utility or Software as a Service (SaaS) model.
Organizations are finding it increasingly difficult to manage the complexities of their growing systems and networks. They are usually time and resource intensive and coupled with the High cost of operations and lack of, it does provide a daunting challenge to monitor and manage the complex and dynamic IT infrastructure environment.
The advantages of deploying an Enterprise Solution on a SaaS model are multifold.
SaaS ensures low cost, scalable and anytime, anywhere access and eliminates the need for upfront capital expenditure and in-house IT resources and additional infrastructure.
This makes particular sense for organizations which have poor IT infrastructure and resources and this is particularly true for the Indian Government sector.
Typically in a SaaS model, the ERP application is hosted on a server in a secure data centre with the relevant data back up with robust internet bandwidth and 24X7 support.
Let’s take the case of organizations which are in the process of Automating their Supply Chain. The huge costs of deploying the elaborate IT infrastructure and server banks at their end can be cost prohibitive. Productivity improvements can be significant as they can connect to their supply base on a real-time basis.
An ERP Solution on a hosted model can ensure a very cost effective and reliable option.
The application is accessed by users through the internet who have their specific user roles defined.
The perfect recipe for Success is a ‘Customized’ ERP Solution that is deployed on a SaaS model.
According to Springboard Research, the total market of ERP and Supply Chain Management (SCM) applications is projected to grow and reach $70 million in 2010 from $14 million in 2006.
ERP delivered through the SaaS model is projected to grow rapidly in India, particularly in the SMB sector.