When small businesses elect to implement an ERP software solution, they have a decision to make as it relates to hardware and operating platform. They can either purchase new hardware or move to a Software as Service (Saas) ERP platform in which businesses access their software application on the software vendor’s or a third-party service provider’s servers. The Software as a Service model, which has significantly grown in popularity over the last two years, can provide substantial cost savings to the small business.
First, by selecting a SaaS ERP solution, small businesses do not need to make a capital investment in the purchase of new servers. The cost of hardware and updates to the hardware is included in the service provider’s monthly fee. In addition, since the Software as Service model is essentially a lease on the hardware, businesses can take advantage of the ability to write off the cost of the service in full as a monthly business expense rather than to depreciate the new servers’ purchase as a capital investment.
Secondly, SaaS is a form of IT outsourcing, so small businesses that lack internal IT skills can enjoy the strong benefits of an ERP without bringing on new technical personnel. When one considers the cost of bringing on a new, full-time IT employee (i.e., salary, benefits, etc.), a Software as a Service solution can deliver thousands of dollars in cost savings each year.
Lastly, the Software as a Service model can provide small businesses with features that would otherwise not be possible if small businesses were to purchase and maintain their hardware themselves. Many Software as a Service providers have 24-hour backup mechanisms in place, so even in the event of a power outage at the service provider’s location, the small business can continue running with little to no impact on daily operations.
The Software as Service model can deliver significant time and cost savings to the small business. Any small business considering the purchase of an ERP solution should examine the many benefits of Software as a Service.