{"id":1376,"date":"2010-07-19T07:00:06","date_gmt":"2010-07-19T15:00:06","guid":{"rendered":"http:\/\/www.formtek.com\/blog\/?p=1376"},"modified":"2010-07-19T07:00:06","modified_gmt":"2010-07-19T15:00:06","slug":"saas-erp-business-in-the-clouds","status":"publish","type":"post","link":"https:\/\/formtek.com\/blog\/saas-erp-business-in-the-clouds\/","title":{"rendered":"SaaS ERP: Business in the Clouds"},"content":{"rendered":"

CRM continues to be the most successful category of application running in the cloud. \u00a0A recent survey in the UK by Really Simple Systems<\/a> found that the split between companies using on-premise CRM versus those that use a cloud-based version is near parity.<\/p>\n

But the numbers for other application categories deployed to the cloud, such as ERP, Payroll, HR and Manufacturing, are very small. \u00a0 13 percent of companies said that they’re using SaaS-based ERP and only 39 percent have confidence in ERP systems running in the cloud. \u00a0Gartner has forecast <\/a>a 16.1 percent market share of SaaS ERP by the end of 2011. \u00a0But Gartner cautions that most of the early market share for ERP solutions are really point solutions, primarily for human capital management and financials. \u00a0Gartner predicts that “mature robust solutions are unlikely to emerge by 2011”.<\/p>\n

Acceptance of SaaS-based ERP has been slow in coming because it is too complex. \u00a0Most early-adopter companies that have ventured into SaaS ERP are small. \u00a0Large companies have virtually ignored SaaS-based ERP. \u00a0The complexity of ERP mean that many ERP offerings in the cloud are not complete. \u00a0 Software suites available in the cloud now are generally focused on one specific domain, like sales force automation or payroll. \u00a0It will take some time before cloud-based ERP offerings will match the depth of capabilities that are found in traditional on-premise software.<\/p>\n

Some of the appeal behind SaaS CRM has been the fact that CRM applications are simple enough so that customers can experience an “instant on” effect after signing up. \u00a0With CRM not very much configuration or setup is needed to be done prior to have a ready and fully functional system. \u00a0It’s much harder to do that with SaaS ERP.<\/p>\n

Achieving an “instant on” with cloud-based ERP is generally not achievable, at least not yet. \u00a0Setting up an ERP system requires you to understand your business processes and for you to know how to map your business \u00a0process components to application features in the software. \u00a0Because of big variations in business processes across different companies, on-premise ERP software implementations have traditionally involved very large ERP software customizations. \u00a0But creating extensive customizations with \u00a0cloud-based software negates many of the positive cost-saving benefits that a SaaS solution can offer. \u00a0The alternative to changing the software is to modify your existing business processes to match the standard processes in the software, something that many companies would resist doing or find very challenging to do.<\/p>\n

This isn’t to say that SaaS ERP vendors aren’t trying to crack this market open. \u00a0SaaS ERP vendors are working to make their products super flexible and configurable. \u00a0A recent ZDNet article by Brian Sommer<\/a> reports on some promising SaaS ERP offers that include Plex Systems<\/a>, \u00a0RootStock <\/a>software (built on NetSuite infrastructure), and SAP’s Business By Design<\/a>.<\/p>\n

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CRM continues to be the most successful category of application running in the cloud. \u00a0A recent survey in the UK by Really Simple Systems found that the split between companies using on-premise CRM versus those that use a cloud-based version…<\/span><\/p>\n

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