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Enterprise SaaS: Not Your Father’s ERP

Enterprise Software-as-a-Service (eSaaS), or cloud-based ERP, is a relative newcomer to the ERP world. Even so, the adoption rate is rapidly increasing–according to analyst firm Gartner, 47% of organizations surveyed planned to move a majority of their core systems to the cloud within five years*.

eSaaS adoption presents tremendous potential to modernize core business capabilities, streamline back-office processes, and simplify technical operations and management. However, to ensure that the implementation and adoption of your new eSaaS solution goes as smoothly as possible, there are several areas that represent significant departures from traditional ERP system implementation and deployment.

It’s About Business Transformation—Not Technical Execution 

Implementation of traditional on-premise solutions requires significant technical effort related to hardware and architecture, database management, and custom development, and the ability to customize the functionality of the products to fit current business processes to reduce the relative business transformation requirements. With eSaaS, much of the technical effort for implementation is eliminated. However, the inability to customize the functionality increases the effort for business process transformation. While the overall effort for an eSaaS implementation is often significantly less than for a traditional on-premise solution, it’s important to plan properly for the business transformation required to align with the delivered functionality of an eSaaS solution.

Your Organization Plays a Bigger, Broader Role

The implementation methodologies of most eSaaS solutions presume significant resource requirements from the customer. The elevated level of business transformation requires significantly greater involvement from your team members who have detailed knowledge of the business requirements and current processes. This focal shift from technical to business transformation also drives increased participation requirements for your team to plan and execute the testing requirements and strategy for the implementation.

Organizational Change Management and Testing Are the Keys to Success

With traditional on-premise ERP implementations, the significant technical efforts and ability to customize functionality mean that the major success drivers of the implementation exist mainly in the quality of the technical deployment and custom development execution. eSaas solutions shift the transformational efforts from the technical to the business area, which greatly increases the breadth and depth of change within the business. As such, the major success drivers of an eSaaS implementation lie mainly within the quality and comprehension of the organizational change management and testing efforts, particularly end-to-end, parallel, and user acceptance testing.

Enterprise Architecture Transformation is More Complex

Traditional on-premise ERP solutions generally impact your enterprise architecture in a relatively low-complexity fashion. There is often little to no impact on the perimeter and external architecture elements, and the net change consists mainly of additional hardware in internal data centers, on internal networks. With an eSaaS solution, the enterprise architecture impact is more complex—secure, robust connectivity to the eSaaS provider’s infrastructure is required to enable user access and data integration between the eSaaS solution and other on- or off-premise systems. This also heightens the need for security of data in transit. This is an important consideration as your organization moves into the cloud.

Goodbye Optional Upgrades—Hello Mandatory Updates

Traditional on-premise ERP systems allow significant flexibility (and complexity) in adopting and scheduling updates and upgrades from the ERP provider. While there is often a minimum version requirement to maintain supportability from the provider, there is no requirement to adopt all upgrades and updates, and you can plan and schedule upgrades around other priorities. With an eSaaS solution, updates to the applications are applied by the provider two to four times annually. These updates are mandatory, applied to all customers at the same time, and the schedule set by the eSaaS provider is immovable. While this simplifies the application of software updates and improves the ease with which customers can stay current on releases, it also requires increased planning by your business and technology teams to address the time boundaries inherent in eSaaS software updates.

Less Technical Support, More Business Support

Traditional on-premise ERP applications carry a significant technical resource requirement for service delivery and end user support. Because these applications are often customized to meet existing business processes, the business support requirement is generally lower. eSaaS solutions turn this model on its head—since the technical components are off-premise and managed by the eSaaS provider, technical delivery and support requirements are greatly reduced. At the same time, the increased business transformation requirements of an eSaaS solution drive higher levels of business support needed. This shift to business needs will likely require your organization to significantly transform your service delivery and support models to meet this emerging need.

Are You Ready For the Future?

Many companies, particularly those who have experienced a traditional on-premise ERP implementation, find themselves remarkably unprepared to address the key differences in the strategic areas described above. Understanding these key differences, and starting the process early to socialize these within your organization, can better position you for success.  Focusing key resources in the right areas can not only ensure a smoother implementation, it can result in true business transformation that moves your organization forward in valuableways.

 

North Highland has a successful track record of helping organizations understand the key considerations that drive a successful eSaaS implementation, deployment, and operation.  Our consultants bring deep functional, technical, industry, and solution expertise and provide the guidance required to maximize the value of your eSaaS systems.  Contact us today to learn more.

 

*Source: “Survey Analysis: Adoption of Cloud ERP, 2013 Through 2023,” Gartner, January 24, 2014

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