Troy Warr has been a software engineer at Computer Presentation Systems, www.cpsusa.com, Rancho Cordova, Calif., for more than 25 years.

SaaS Is a Natural Evolution for ERP

The acronym ERP (enterprise resource planning) was first coined by the Gartner Group, www.gartner.com, Stamford, Conn., in the 1990s. Acquiring an ERP system is one of the biggest investments a business can make. Traditionally, implementing such a system required a substantial capital investment in infrastructure: hardware, software, and personnel. It was a one-size-fits-all solution—just so long as that size was Fortune 500. Most small to mid-size businesses were left out because they simply did not have the resources to entertain an engagement.

The most significant advancements in ERP has come with cloud computing. This has given birth to the SaaS (software-as-a-service) business model. The SaaS industry has been around for more than a decade and while you may not be familiar with the term, you may already be using it: Microsoft Office 365, WebEx, Google Apps, or GoToMeeting. It’s a software licensing and delivery model where the software and data are centrally hosted and the application is accessed via a Web client (usually a browser). The subscription fees may be user or usage based.

The most significant advancements in ERP has come with cloud computing.

SaaS has changed the landscape of the entire software industry. Software developers have been given a new delivery channel and this opportunity has given rise to a rapidly increasing number of vendors who can provide this service. For the consumer, it replaces the capital outlay of buying IT infrastructure with a simplified costing model in the form of an ongoing operational expense, expedites deployment, and mitigates most of the risks associated with on-premise solutions.

While the older on-premise model enjoyed a bounty of integration options, the initial SaaS surge, unfortunately, left behind these mature tools. Many providers have been playing catch up in developing newer APIs (application programming interfaces) to fill the void—but it is happening. These advancements in integration will cultivate the “best-in-breed” approach, allowing solutions built by other companies to communicate with the business core. HR, payroll, customer service, and CRM (customer-relationship management) are all on the front lines of these offerings. Forbes reports that by end of this year 62% of CRM will be cloud based.

Smaller businesses need to be faster and smarter than their larger competitors. The successful implementation of an ERP system allows that business to appear, act, and operate at an enterprise level. Cloud-based implementations provide instant infrastructure that can scale with continued growth. There have never been so many enterprise-level software options as there are today. The competition results in better pricing, added value, and continuous innovation with an emphasis on mobile functionality that is essential to field level operations. ERP is now for everyone—that’s the revolution.