What are the Differences Between SaaS ERP and Cloud ERP?
September 02, 2022 11:30 AM

What’s the difference between SaaS ERP and Cloud ERP?

Before we dive into the differences between SaaS ERP and Cloud ERP, let’s begin by understanding what ERP (Enterprise Resource Planning) means.

Any business or organization that comprises more than a few employees can greatly benefit from a closer connection among its operational and financial data and functions. ERP systems allow for these connections to be as automated as possible. That’s the basic premise behind Enterprise Resource Planning systems.

However, many businesses find it a complicated endeavor to select and then successfully implement the ERP solution that is right for their specific needs and preferences. The confusion often begins with the Software-as-a-Service (SaaS) ERP vs Cloud ERP debate.

While there are many similarities between these solutions, they each come with specific advantages and disadvantages, which make them a better or worse fit for a specific business, depending on that business’ needs and preferences. For example, SaaS ERP is typically faster to deploy and entails lower upfront costs, while cloud ERP offers more scope for customization.

Cloud ERP

The pros and cons of a cloud-based ERP

Cloud ERP software is delivered and managed through remote servers, and companies pay the vendor for the specific resources and functionality they need. Users can continually customize their cloud ERP by adding resources when needed or removing the resources that are no longer necessary. This feature makes cloud ERP highly flexible and scalable and also allows users to access data in real-time. Maintenance and updates to hardware or software is handled by the vendors.

Advantages of Cloud ERP

  • Lower upfront costs, since there is no need to buy hardware
  • Faster and easier to implement
  • Better access to the system and key business information
  • Up-to-date software upgrades
  • Enhanced security, resilient data storage and business continuity capabilities

Disadvantages of Cloud ERP

  • Data migration could be a challenge for businesses shifting from on-premises ERP
  • Less control over data and other security concerns
  • Possible security and regulatory compliance issues regarding hosting and accessing customer information


The pros and cons of a SaaS ERP

SaaS ERP is a cloud-based ERP solution that is typically sold as a monthly, per-user subscription, and is distributed as a service through the internet. SaaS ERP runs on the vendor's servers, and the vendor updates the software on a quarterly basis.

SaaS ERP runs on a multi-tenant architecture, which means that each tenant's data is kept separate by the vendor, but they share the software instance and supporting infrastructure and database.

A SaaS ERP system is easy to implement and use, and the vendor is in charge of updates and maintenance. This helps to enhance system security, protect the ERP system from threats and crashes, and lower IT costs. On the downside, vendors usually offer standard features with little room for customization in the SaaS ERP model.

Advantages of SaaS ERP

  • Lower, and highly predictable operating expenses - You only pay for the users who need access to the system
  • Excellent out-of-the-box functionality that covers various aspects of business operations
  • Rapid scalability and agility in terms of adding or removing users
  • Automatic upgrades that save time and effort, while also giving users access to up-to-date functionalities
  • An intuitive user interface that helps users access more system functionality, thereby increasing adoption

Disadvantages of SaaS ERP

  • Less flexibility in terms of customizing the software to accommodate unique business processes or operations
  • SaaS ERP may not meet the rules & regulations of certain highly stringent organizations or those that operate in highly regulated markets
  • Costs increase as more users are added and can escalate quickly if they aren’t closely monitored

Cloud ERP vs SaaS ERP: Which ERP Solution is right for you?

While choosing the right ERP solution largely depends on your organization’s specific needs & preferences, it is generally advised for extremely large organizations, and those with strict security requirements or highly unusual business models to opt for a single-tenant Cloud ERP, which gives them greater control over the software.

Most other organizations will likely benefit from SaaS ERP. Especially those that are seeking quick implementation, wish to control initial costs, require seamless scalability, and want to avoid the time and expense involved in installing and maintaining the software in-house.

Our expertise in the field

At Web Synergies, we work with major ERP platforms like Microsoft, SAP, and our homegrown cloud-based ERP platform, iSuite, to provide cutting-edge and ERP solutions to our valued customers across the globe. With our industry-specific knowledge and deep understanding of business processes, we are in the best position to offer advice and guide customers on the successful implementation of ERP solutions in the most timely and cost-effective manner.

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