Neither here nor there

PANORAMA Consulting Group`s 2010 ERP report mentions some differences between software-as-a-service (SaaS) ERP system implementations, and those of on-premise software.

Paul Marketos, MD of Bluekey Software Solutions, says regarding SaaS: "South Africans are culturally a little sceptical. There hasn`t been massive demand for it. It`s the way the world is moving, but it`s still a small minority."

Kevin Pentecost, Epicor territory manager for Africa, agrees that SaaS is growing. "SaaS is quickly gaining popularity due to the many benefits it offers to businesses of all sizes, particularly small and mid-size companies. ERP software delivered in a SaaS model provides businesses with the opportunity to reap the benefits of an enterprise-class software solution at a lower cost of entry. On-premise ERP, however, is still the best choice for companies that already have a solid infrastructure, the right expertise, skills and knowledge, and who would like to retain the control of the system in-house," he says.

The advantages of SaaS, according to Swati Desai, country manager for HansaWorld SA, are: it is simpler to deploy from a technical perspective, it is a suitable option for multiple locations where the number of users is spread over large geographical areas, and it has low start-up costs, as all technical support for updates and maintenance is included in the monthly fees.

The disadvantages, she says, are the reliance on the Internet, lack of customisation, cost of long-term rentals and the possible security risk.

However, on-premise solutions have their own advantages and disadvantages. Advantages are that a company has better control over changes to software, such as customisation, there is a greater reliability for up-time and there are no long-term rental costs involved.

The disadvantages, she says, are the additional costs of physical servers, the need for operating system technical support, disaster recovery plans and support, and the higher start-up costs.

Mohammed Mosam, product manager for Evolution for Pastel, says SaaS, without a doubt, is a growing trend. "It`s growing widely, and not just overseas."

He says there`s still a generational gap, where more traditional companies want control over their data, but the new generation is interested in being agile. "As we progress even further, it will become more in demand."

Jaco Stoltz, CEO of Strategix, says: "Most companies are moving towards SaaS as it can be used as an operational expense, whereas on-premise can incur an enormous capital outlay around licensing, hardware and consulting fees. The benefit of SaaS ERP is that companies are able to increase and reduce users as needed. As the price of storage and bandwidth continues to fall, cloud-based services are becoming more and more attractive to small and medium-sized businesses, especially considering that they are seeking ways to reduce licensing costs, avoid recruiting IT staff and focus fully on their core responsibility: growing the business."