The Economy Nudges ERP Toward SaaS

No industry has been untouched by the recently tumultuous economy, and naturally ERP is one of them. So how will this already slow-moving industry absorb the economic shock? By speeding up, of course.

This development is evident in the rise of SaaS ERP products for SMEs—SaaS for the mid-market is being considered the next big thing. Two years ago SAP announced Business ByDesign (BYD), a SaaS ERP model, and it is currently being released at integrals. NetSuite and Salesforce.com have similar platforms available, and marketing language associated with them is centered on cloud computing.

The economic crunch has left businesses in search of ERP platforms with greater functionality that can get services to market quickly. Where companies previously exercised only about ¼ of their ERP product’s functionality (according to Cindy Jutras at Aberdeen Research Group), tough times left them looking for systems that met all their functionality needs for more efficient implementation of business practices. Companies are studying ROI more closely than before, and looking for quick solutions. Likewise, fewer companies are willing to wait extended periods for full ERP implementation—they want within months or weeks what previously took years to accomplish.

Some of the lesser-known providers are gaining popularity as large companies look to them for speedier ERP implementation at new branches. This doesn’t mean certain death for on-premise solutions—if they lower their prices, they’d surely stay afloat—but that the demand for cheaper and more extensive ERP products will affect industry movement is unassailable.

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