One of the most strategic, and costly, business applications is enterprise resource planning (ERP) software. ERP is critical to an organization, underpinning functions such as finance and business operations. Organizations should strive for a modern ERP solution, but modernizing ERP is often a costly and time-consuming process. Firms also face the decision of whether to move off of on-premises ERP to software-as-a-service (SaaS) solutions. Deciding to, and deciding how to, modernize your ERP solution thus requires careful consideration. That is why Forrester wrote the report Quantifying The Business Value Of SaaS ERP to help technology leaders understand the potential longer-term financial and business impact of replacing on-premises ERP with modern SaaS ERP.
While SaaS ERP is dominating the conversation of modern ERP, on-premises ERP still remains an option. Many ERP vendors are pushing customers to move to SaaS through price hikes and compliance threats. Don’t let these factors rush your decision to switch to SaaS. Instead, create a business case that looks at the advantages and disadvantages of SaaS ERP. We created a simplified version of Forrester’s Total Economic Impact™ (TEI) model for SaaS ERP (downloadable tool included in the report) to help consider factors such as benefits, costs, risks, and flexibility.
Take A Pragmatic Approach
With any modernization effort, there is naturally some risk and considerable costs involved. For SaaS ERP, the primary cost to consider is the ongoing subscription fee, which is often more expensive than the license-plus-maintenance fees over time. Other common concerns are loss of application control and vendor lock-in. While these apprehensions are valid, we find that in most situations, the overall business value of SaaS ERP outweighs these cons. SaaS ERP offers innovation, agility, and user empowerment. Updates are more frequent and incremental, all users are on the same version, and SaaS vendors can often provide better security and performance than firms can in-house.
By considering SaaS ERP from all angles and taking a long-term view of the potential business value, technology leaders can create a comprehensive business case for SaaS ERP specific to their organization.
Let’s Connect
The report Quantifying The Business Value of SaaS ERP is a great place to start in crafting a business case for SaaS ERP. If you want to discuss this in further detail and review your results, schedule a guidance session with a Forrester analyst. For comprehensive help with crafting a business case, explore Forrester’s consulting options.
