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Views from Booth 25 – P21WWUG CONNECT 2021

Views from Booth 25 – P21WWUG CONNECT 2021

Prophet 21 Trade Show Truths

Dining and whining with the end users in the trenches of Prophet 21’s annual conference can elicit frank and poignant sentiments regarding the state of software and the state of the broader markets that it works to support. Listening to the triumphs and tribulations of the P21 customer base, we’ve gained a much better understanding of the challenges that face the distribution world in 2021 and beyond. With this in mind, we thought we’d pass along a few lessons learned from our time in our P21WWUG CONNECT booth this year.

P21WWUG CONNECT 2021 Booth 25 Miranda Fallas Chris Koplar Epicor Prophet 21

Many business owners find themselves at a crossroads, where they need to take the next big step to scale up their existing operations and to compete more effectively and support strategic growth initiatives. This growth might even involve developing a more global footprint, and this has massive infrastructure, cybersecurity, and compliance regulation needs.

Distribution Industry Material Supply Challenges

Material supply continues to be a primary concern for organizations, one that unfortunately extends beyond the capabilities of an ERP system. Shipping lane stagnation, port congestion, raw material shortages, truck driver labor shortages, offshore vendor shutdowns, and a variety of additional factors have thrown traditional supply chains into disarray.

Addressing the Challenges

Companies are taking various approaches to address many of the above situations. Pathways might include outward-focused initiatives like EDI, punchout, SRM, e-commerce to improve communication between suppliers and customers. More internally-focused approaches also abound, as companies try to get more efficient and effective in the areas of warehouse management, AP automation, AR collections and credit, and in the pursuit of more cost-effective application deployment strategies.

Suppliers vs. Distributors

Over the years, suppliers have developed an increasing and disproportionate influence on distributors, more than ever before. Supplier mandates are forcing distributors to sometimes take radical actions to reorient themselves to address new demands. The breadth and depth of new demands often corresponds with the comparative size of the suppliers in question, but may also relate to the commodities being supplied and their relative scarcity. That is to say, when demand outstrips supply, the suppliers can be more demanding.

New Software, New Support Needs

The release of new versions of the software, coupled with the expiration of legacy version support, has put many users in a heightened state, as they scramble to determine what the next steps of their upgrade and deployment lifecycle will entail. Related to this, the migration to the web-based interface is an area that many companies are struggling to work out, given their existing application footprint, and the differences in look, feel, and functionality between the new and the P21 legacy client versions.

Labor Shortages

While material shortages are a well-known and overarching concern related to the pandemic, shortages in labor are also becoming increasingly problematic. The inability to find able-bodied individuals to fill positions within supply chains caused significant changes for organizations in 2021 and distributors are concerned that they will persist into 2022.

Application Deployment Differences

Overheard at the conference: “I didn’t know there were any other options!”—as legacy versions approach their end-of-life dates, customers find themselves looking at alternate application deployment options—from continuing to locally host the application on-premise, to moving to Prophet 21’s SaaS version, to hybrid private cloud infrastructure-as-a-service models. In spite of the tumult, different options exist, and P21 customers are discovering just what is out there.

As supply chains become more complex than ever, Prophet 21 customers are looking for control, access, and visibility. Critical to the goal of ultimate control, especially in terms of access, cloud deployment can make or break the chain.

Cloud Crossroads or Crosshairs

Also overheard at the conference: “Cloud without access means no job—cloud with access means I still have a job.” A common theme with the P21 customers we’ve talked to with regard to cloud deployment has been a question of access. Customers generally require varying levels of control and access over their application deployment. Solutions that limit access and control create problems for companies not only in terms of employment but in terms of efficacy. At the end of the day, distribution industry leaders are hoping the crossroads of growth won’t put them in the crosshairs of a cluster-cloud.

This concludes our episode of “tales from the booth.” Were you able to attend this year? Tell us what you learned. Did you miss it this year? Let us know and we’ll tell you all about everything we learned at P21WWUG CONNECT 2021!

9 Questions to Answer at P21WWUG CONNECT

9 Questions to Answer at P21WWUG CONNECT

P21WWUG CONNECT – BOOTH 25

The 2021 Prophet 21 user conference (P21WWUG CONNECT) is less than a week away. For those of us in attendance, it is an exciting time for collaboration and discovery. User conferences are a great opportunity to trade ideas with other users and get a sense of the shared and unique challenges faced by different companies, in different industries. 

Having manned a few booths over the years, I’ve been lucky enough to hear many ERP stories and more than a few customer ERP quandaries. One such quandary that cyclically arises has to do with the question of application deployment. As hardware ages and operating systems expire, customers often find themselves scrambling to determine whether to replicate past deployment models or explore new options. 

Distribution business worker using cloud hosted ERP technology

Software-as-a-service, public cloud, private cloud, managed hosting, infrastructure-as-a-service—the options abound and overlap, and it’s easy for options to slip though the cracks. As such, customers sometimes approach our booth simply looking to understand what options are available, relative to their current situation. In our conversations with such customers, we normally run though a set of questions to better understand our customer’s current state, the issues they face, and the opportunities available to them.

With that in mind, and with the P21WWUG CONNECT 2021 event on the horizon, it might be beneficial to understand some of the early considerations to make, as you approach the question of application deployment. Answers to these questions can set you on a path to understanding how you might want to deploy the next generation of your P21 application.

Do you have outdated hardware? How old are your servers?

As your hardware ages, it becomes an increasing risk to your organization, and many companies are accustomed to the 5-year cycle of hardware replacement. But the technical footprint of our current world differs considerably from five years ago, and this provides new options in 2021 that would not have been viable in 2016. Server deployments do not mandate an on-premise data center. Review the options for private cloud server deployments before signing the check for a new server stack. 

Does the customer have outdated operating system of RDBMS versions causing downtime, security risks, lack of backups, compliance or cost?

Like hardware, an operating system can exceed its use-by date, creating several potential issues. This overlaps with version upgrades of your P21 ERP, as ERP versions are restricted to specific operating system and database versions. As such, ERP upgrades are often partnered with upgrades to a customer’s database and operating system. 

Like hardware, an operating system can exceed its “use by” date, creating several potential issues. This overlaps with version upgrades of your P21 ERP, as ERP versions are restricted to specific operating system and database versions. As such, ERP upgrades are often partnered with upgrades to a customer’s database and operating system. 

Are you struggling to find the right IT support for your hardware, your server, or your application?

Whether IT support is internally supplied, or outsourced from a managed service provider, companies frequently encounter support challenges, whether it is with capacity, capability,  or delivery. Most often, as your business grows, your IT capacity might be stretched beyond its original capacity. Such is an opportunity to evaluate a cloud deployment, to apportion the management of the application to a partner, allowing you to focus on mission-critical IT projects and initiatives. 

Is your P21 application currently hosted by another provider and are you looking for different options? Are you unhappy with your current situation due to downtime, latency, security, compliance or cost? 

Even within a private cloud hosting environment, different options are available, in which certain resources are dedicated, while others are shared. These differences can impact price, performance, and service levels, and its important to understand whether the cloud configuration you’ve been provided is meeting your needs, or whether a different configuration, perhaps though a different provider, would be preferable.

Are you thinking about moving your Prophet 21 install “to the cloud” and looking to know more about what that might mean?

A cloud deployment of your P21 ERP application could mean different things. On one end of the spectrum, you have software as a service (SaaS). In SaaS, the application is deployed to a public cloud.

Is the customer on P21 SaaS and considering moving back to an on-premise / hosted /perpetual license version?

A software-as-a-service (SaaS) deployment of any ERP application can bring many benefits to an organization. But a SaaS deployment does not work for all customers, and it is not uncommon for customers to purchase a SaaS version of an ERP and decide to shift to its more robust and fully-functional perpetual-license counterpart. But moving back to a perpetual license does not mandate a move to an on-premise deployment. Cloud options are still available. 

Are you planning for a P21 upgrade and looking for options?

An upgrade, especially a major release, can be an opportunity to consider your deployment options. What is the best way to deploy the new version? Does the new version change the server configuration in any way? Prophet 21’s deployment evolved across versions, as Epicor deployed a middleware application server layer as part of the new architecture. The change required a new server stack. Understand how big a jump you have in front of you by developing a P21 upgrade roadmap that includes a deployment that matches your business needs.

Are you concerned about Epicor dropping their support for the Legacy client and looking for options?

The rush to Epicor’s middleware server is too hasty for many in the user community, and customers are still trying to make sense of P21’s web client and hybrid client deployments. With this change comes opportunities to deploy hybrid client models, to allow certain users to continue to leverage the legacy client.

Is the customer looking to update overall technology stack as part of the implementation of an integrated system (E-commerce, SRM, CRM)?

Sometimes, the integration of a third-party platform requires an upgrade to the overall ecosystem. Such is an opportunity to review your server installation and consider your options.

 

Will you be at the P21WWUG CONNECT user conference this year? If so, come find us at Booth 25. We’d love to talk about application deployment, or whatever else is on your mind.

Total Cost or Total Loss: New Software, New Budget

Total Cost or Total Loss: New Software, New Budget

The cost of a software budget

Software selection can be a lot like car shopping. You do a few test drives. You talk to happy drivers. You ask for the price and then ask for a better deal. You begin to investigate how much this new vehicle is going to cost. One part of the software budget is easy: that it’s going to cost you something. You might already have a quote from your prospective supplier. You might have more than one quote addressing different ways to acquire your new software or ERP system. But how can you predict the total cost of ownership?

African Professional Chartered Accountant Woman Budgeting For Enterprise Software

Initial installation costs

One option for a new software or ERP system is an on-premises installation, complete with your own hardware to support the platform. In the past, this was the only option. A business would pay money at the beginning and obtain the software to install on a company-owned computer network. Ongoing costs would include financing the staff required to maintain support, manage future upgrades, and navigate bug fixes.

Many software acquisitions today use software as a service, or SaaS, as an option. This is commonly known as the cloud, but it is the most public of the multitudes of cloud-based solutions available to businesses. SaaS requires an agreement to pay a fee monthly for some years into the future. Software as a service usually involves low or no upfront cost since the profit for the vendor is based on long-term commitment to the software subscription. Salesforce is a common example of SaaS. Implementation costs are low to none, as the software and related data are loaded on a vendor-maintained system somewhere outside of your corporate walls. Initial costs vary for SaaS, but generally they’re the deal that opens the door for a more lucrative future for the vendor, rather than an early expenditure for the purchaser.

Project management costs

Acquiring and implementing enterprise-level software of any kind is a major project that can require several years to complete. One of the first considerations is that you’ll need someone to manage the overall project. Some companies will hire a specialist who has managed similar implementations successfully with the intention that the job will be limited to this one project. Others might choose to challenge an up-and-coming person already employed with the company to transition into a position of management of the ERP or software project. The intention here is often to develop that person’s skills and groom them for future promotions. There are other options, of course, but the bottomline is that managing your enterprise software project will cost money. Even using an already-employed person has a cost, as someone will need to be hired to perform that person’s job in the interim.

Most businesses will form a steering committee that will act as a board of directors over the project. The project manager and senior executives will fill this committee and help keep the project on track, leading to completion on a schedule that will most benefit the company.

Real costs will come from the defined implementation group. This group can be made from currently employed people, but all of them, while working on the project on a part-time or full-time basis, will need replacement personnel to fill previous roles. One or more software consultants from the software provider will have roles in this group, and all of them will cost money. Likely there will be specialist consultants required to fill roles and perform tasks when the business is in need of additional resources.

Data conversion costs

Extracting data from legacy systems and converting that data to the formats required by your new software is one of those specialist roles. Most of the cost will come early in the project, but some expenses will certainly be ongoing, as new needs and corrections are found during the testing of the new software.

The price of testing

Testing the new software to ensure all transactions and reports yield the results required actually work will be an ongoing cost throughout the project. Some tests will be completed and changes to processes or data will be made and then the test will be made again until the results are satisfactory. Set aside money and time for a testing phase. This is a critical step and should have substantial representation when you’re developing your software budget.

The savings found in training

Your users will need training so that they can work with the new software immediately. Whether you hire training specialists or develop your own training process, there will be an investment here that will result in a lot of savings and profitability for your company.

The budget for hardware and networks

Your new software has the most up-to-date technologies. Likely you will need upgrades to hardware and networks to enable those technologies. Your legacy hardware probably could use some upgrades anyway if your systems were bought years ago. To create an accurate budget for hardware and networks, add up all the incremental costs and make a time-phased list of those costs. You can now compare the costs in each time bucket against the benefits you expect in each time bucket.

Looking for help developing a software budget reflective of your company’s needs and capabilities?

Get a business process review today. Our experts can assist you with full-circle enterprise resource planning, managed ERP hosting, and managed technology. EstesGroup has helped manufacturers and distributors for more than 17 years, and we have specialists for everything from Epicor Kinetic to Prophet 21.

 

When Your Value Stream Begins With Software

When Your Value Stream Begins With Software

Stay in the Flow: Estimate Your Software Value Returns

Businesses are supposed to earn a profit. New software can quickly lead to debt. Before you commit to a new software acquisition, know if your new possibilities will also be new expenses. If one of your customers wants to open up new product channels and your legacy systems will not work to meet development needs, the software selection process begins. You want to keep the good relationship you have with your customer, and you also want the new business. If you’re a small business, this means exploring the greater world of enterprise resource planning (ERP) software.

Software Value Stream Mobile Device Cloud ERP

Can you forecast the revenue stream for this incremental product or channel?

Your customer will have their estimate. You might also be able to increase sales to other customers with the capabilities the new software brings. Is there new business you can develop that did not exist yesterday? Maybe you can win some business from your competitors using your new capabilities. Incremental revenue will also have an incremental cost of sales. The additional margin is what you need to estimate for this analysis. Some of the new sales might replace existing orders and, if this is your case, subtract the forgone revenue associated.

All You Need to Know About the Savings Game

During the meetings you and your team hold for developing software requirements and talking in general terms about this new software, you will hear excited thoughts about sales orders moving faster into production. People will talk about how you can manage inventory much better. Another one might suggest that you could produce the same level of product with half the personnel in a department.

Some “software value stream” thoughts will make it to your software selection requirement list.

Here’s a potential thought stream surrounding value potential, especially when considering adding or upgrading an ERP software.

  • What can I do to enable a 25% reduction in inventory levels?
  • How can I ensure that all new sales orders will be in production or shipping within four hours of receipt of the order? Can I achieve this using only one support person to handle exceptions? Can I do this if I reduce staff to one from the current level of five people?

With new software, value can now be seen everywhere in your company’s future. Other potential savings are not requirements but remain as expectations. You know that you and your team will benefit from this software. Develop your list of savings and describe those savings in monetary terms divided into time phases. Remember that reducing your sales order support staff as described in your requirement only counts when you actually reduce staff.

Downstream From Your Software Value Stream: Ensuring Future Business

Often some of our software requirements enable us to meet new demands such as a new compliance regulation that our legacy system cannot support. When our new software allows us to meet that compliance, we cannot say we increased revenue or reduced cost. But we can continue in business so that there is a clear value. We could say the cost avoided is the loss of any margin that comes from an entire product line, so the loss would have been significant.

Your Total Value Stream

Evaluate all of your cost savings and incremental revenue and any other measurable improvement related to your new software. Lay these objective benefits out in time buckets over the next several years. You will probably be able to name other benefits that are not easily measurable. An easier user interface will be valuable to your employees, but there might not be any cost savings related. Keep your benefits simple and only use those that you can measure. When in the selection process and considering your software value stream, get your costs of acquisition and usage defined, so that you can compare these benefits directly with your costs later.

Custom Cloud: Public Cloud Choices, SaaS Challenges

Custom Cloud: Public Cloud Choices, SaaS Challenges

What to Do When ERP Turns SaaS

I once sat in at a sales conference for an ERP vendor and listened as the CEO explained sales strategy as it related to their ongoing movement to the cloud. He described the situation as one of configurability vs. customizability. There were some customers who could live with and work within the configurable features and capabilities of the base application as they existed “out-of-the-box.” These customers would be targets for the vendors single-tenant and multi-tenant cloud (or SaaS) offerings. For the subset of customers whose needs extended beyond the system’s base configuration, and were in need of custom functionality and integrations, the vendor would still offer the traditional perpetual license. This would allow customers with more complex needs to deploy their applications on-premise or in a private cloud.

ERP Public Cloud Software as a Service

That was the CEO’s perspective. Customers have their own perspective. 

Configuration & Customization to Order

I recently talked with a customer who was struggling to implement the cloud version of an ERP to the vendor’s public cloud. The customer had purchased the software based on a set of assumptions, assumptions that were not instantiated by the vendor’s public cloud (or SaaS) platform. For one, the customer had come from a highly customized in-house suite of applications, and had a highly developer-centric approach to application implementation: if the app didn’t do what you need, customize it so that it would do what you need.

This approach is anathema to ERP implementations in general, and as a customer implementing on a public cloud SaaS platform, the shock was only intensified. The customization toolset to which they believed themselves to be privy to was less than advertised. And the documentation that explained just what was and was not possible was all but nonexistent. As the customer put it, his team’s vast C# skillset went largely underutilized.

Frustrations abounded on all fronts. Creating the necessary reports and labels, whether through Bartender or SSRS had been a disaster, as both the licensing and underlying architecture made for an untenable situation. Development and deployment of new solutions was cumbersome and time-consuming, as it required the vendor to perform the deployment every time a change was made. Similarly, the approved third-party applications that they had purchased in conjunction with the base package didn’t integrate as well as advertised, and they turned out to be even less configurable than the base ERP system.

Worse still, the customer was a user of the ERP’s product configurator module. This mode was itself a mini-development platform, but its features were largely server-side and thus greatly hampered in the vendor’s SaaS platform. The ability to use the module to look up and retrieve data, for instance, was greatly limited on the SaaS architecture, and the customer struggled to construct configurators to handle their complex product needs. Beyond functionality, the overall performance of the application was a drag. For many customers, the move from whip-fast, green-screen legacy platform to a contemporary ERP brings an unfortunate surprise when it comes to basic performance at a user interaction level. But in this case, it was magnified by the performance of the underlying cloud platform.

It was a disheartening conversation and I struggled to offer suggestions, outside of a reimplementation under a perpetual license model. The strange thing was that the customer did not really even come to me looking for help. He was really just venting his frustrations. He had learned enough of the application, its architecture, and the Service-as-a-Software (SaaS) deployment model to know that whatever help he might receive, he was constrained by the architecture to which he had bound himself. The cloud, whose name implies boundless opportunity and possibility, had become a crippling constraint.  

Different ERP systems provide different levels of configurability and customizability. Some systems offer a basic platform with robust tools to use to build custom functionality with which to tailor the base platform. Others provide extensive configurability, as to avoid the need for additional tailoring. The systems that best combine configurability and customizability capabilities stand the best chance of supporting the needs of complex organizations. Even still, the unbridled requirements of a given company can often exceed the combined abilities of an ERP system to handle it.

This may necessitate the need for third-party integrations, to atone for liabilities in the base system. It may require integration to a pre-existing home-grown system, to address the specific needs of the organization. In the most extreme of cases, customers may look to modify the system’s source code to make the system do what it needs. At some point, it should be considered whether such extreme measures justify the investment in ERP at all. Sometimes it is simply a cultural conundrum: if an organization is unable to bend some of its needs to the will of the application, they may truly be better off with a homegrown system, and live with the liabilities that come with such a decision. 

DRaaS for SaaS: When the Public Cloud Vendor Needs to Adapt

Beyond configurability and customizability, the questions of functionality and integration as they relate to an ERP system’s deployment model complicate matters further. The textbook cases regarding ERP customization nightmares from the 1990s all occurred within an on-premise context. The evolution of cloud computing had not yet thrown this new variable into the mix. But with the improvement of server processing power, the expansion of data centers, and the ability to pass larger and larger amounts of data over networks, ERP vendors were able to construct ERP applications that conformed to the public cloud software-as-a-service (SaaS) deployment model.

This shift toward a SaaS model allowed for highly available and highly scalable ERP solutions, whose subscription-based model provided ERP services for a monthly rate. But in doing so, the features and capabilities that these vendors offered were often scaled back significantly, when compared to their on-premise, perpetual license predecessors. Similarly, the integration capabilities of such platforms were drastically reduced to the web APIs that the ERP SaaS platform supported. This made the extension of the application’s capabilities much more difficult to achieve. For customers needing robust and expansive ERP functionality, as was the case with my customer above, the results of a mismatch between business requirements, customization tendencies, and deployment models can lead to a perfect storm of failure and disillusion. 

How does one avoid such a problematic situation? To begin with, there are some key questions to answer at the time of software selection before you’ve signed the dotted line:

  • Firstly, you need to understand the background of your own organization. Are you coming from a standard system or from a highly-tailored home-grown system? Are your business requirements of the variety that are commonly managed by a packaged system? Is the shift from your current system to the future system a small shuffle or a quantum leap?
  • You also need to understand your own expectations for the new system: are you trying to fit your organization into the system, or are you trying to tailor the system to fit your business? Do you see an ERP system as a packaged application or a custom development platform? Companies differ in this approach, and this greatly affects how they intend to use the system, so you need to be explicit about your expectations.
  • Finally, it should be noted that in many cases, a software’s public cloud version will differ markedly in functionality from its cloud cousin. As such, be careful to understand the version from which the Sales Engineers are basing their demonstrations. If you’re looking at a cloud deployment, ensure that the sales team demonstrates the application, as you will experience it as a customer, and not the products more robust, on-premise version.

Cloud services are as unique as business processes, and SaaS companies / SaaS, or public cloud, applications aren’t always as “internet connection, web browser, go” like they’re often advertised to be.

If your corporate office is mandating some form of “cloud” solution, understand that not all clouds are created equal. A system’s deployment mode is not as simple as choosing between an on-premise dinosaur and a public cloud popsicle. One significant alternative to the SaaS vs on-premise dichotomy is a private cloud deployment. Private cloud allows an ERP customer to install an on-premise, perpetual license version of the software, but in a virtual cloud environment. This allows customers to leverage the full set of capabilities, functionality, and integration opportunities that the software offers. For customers bent on heavy tailoring and customization, this allows them to leverage the full set of tools tailor the application to the customer’s specific needs. Further still, this model makes integrations much easier, as it provides access to the application and database server layers, as needed, which can greatly simplify integration architectures. 

Cloud Customs of Custom Code

A company’s implementation story should be neither a laughable comedy nor a disheartening tragedy. With planning and discretion, companies can formulate a successful narrative. Are you in search of an ERP story with a happy ending? Talk to us, and we’ll spin you a yarn.

You can consolidate everything from software licensing and updates to hardware inventory management with EstesCloud Managed Application Hosting. We offer custom solutions for web-based transactions. We might not be famous like Amazon web services, but our private cloud, hybrid cloud, IaaS, and PaaS solutions offer you the personal attention of world-class IT and ERP consultants.

ERP Deployment Options & Cloud Services

Infrastructure as a Service

Platform as a Service

Software as a Service

IT Management Models

In pure form, a public cloud deployment limits your control and troubles cybersecurity and compliance management efforts. Know your enterprise resource planning options before you deploy. The cloud should be one of your most powerful tools as you move your company forward. But cloud computing terminology is hazy, and cloud migration can be a step backward if the deployment model isn’t a good fit. Do you understand your cloud options? Our cloud ERP experts can walk you through the cloud spectrum and help you find the best platform for your business. When a complex ERP like Epicor’s Prophet 21 is going through client-server architecture changes, EstesGroup consultants are here to answer questions so that you can focus on your business, rather than on its supporting software.

Feeling the pressure to upgrade your ERP system to a new SaaS version? Know your options before you commit to the public cloud. Get a free demo and consultation with our cloud experts today.

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Hosted or SaaS ERP? Understanding the Differences

Hosted or SaaS ERP? Understanding the Differences

In the world of enterprise resource planning (ERP), companies spend a lot of time on the software selection cycle. Determining which application will best fit the needs of the business also brings deployment model questions to the table. Currently, many manufacturers and distributors are trying to understand the differences between hosted ERP and SaaS (software as a service) ERP. Whether you’ve already chosen your ERP or are in the process of selecting your software, understanding your on-premise and cloud deployment options is key to enterprise resource planning success.

Hosted or SaaS ERP Infrastructure with Cybersecurity Locks

An application’s functionality is understandably important. The best fit that a company can find with its ERP system will very likely lead to a better implementation, with lower costs and reduced risk surfacing as essential benefits. Ideally, you’ll build a solid foundation for all business activities that follow your ERP implementation. Your computing costs should go down, and time formerly spent on technology and software should shift into more time to spend on your business.

What is ERP deployment? 

A key consideration, one that I do not believe receives enough time and effort during the software selection phase, has to do with the deployment of the solution itself. The implications of such a deployment are life-changing for any company, and particularly influential in the manufacturing and distribution industries.

At the time of software selection, it’s important to understand how you intend to deploy your new ERP system. An application’s functionality is almost as important as the functionality itself. For this reason, you’ll want to ensure that the deployment model you choose successfully overlaps with the functionality that you need.

What is a deployment model?

By deployment model, I am not referring to the operating system or the underlying database management system, whether the system is Windows-or Linux based or whether it sits on top of an SQL server or Oracle database. Those are in themselves important considerations, but the deployment model has more to do with installation and accessibility. How will the application itself be installed and accessed by the customer?

What is cloud deployment?

There are two very general classifications of cloud ERP deployment models that you can make to try and understand your cloud options. I would classify these as SaaS (software as a service) and hosted deployments.

The Software as a Service Deployment Model

Software as a service, or SaaS, is the model in which the application lives somewhere in the vendor’s data center, and the consuming customer has no line of site to its deployment. The customer subscribes to the software and consumes the application on a client-only basis, often in the form of a web browser. There is no need to manage a complex installation or oversee the application’s administration. The SaaS deployment model limits your control by limiting your responsibility in regard to application management.

The Hosting Deployment Model

The other common deployment model you could classify broadly as hosting. In a hosted environment, the application is deployed to a known server architecture. This architecture could be an on-premise or a local host, or a colocation facility, but I’m seeing much less of that these days, except with larger organizations that are comfortable with large hardware investments. Most often, I find hosting to refer to some form of cloud data center hosting, where the resources are consumed over the cloud as a service. In this scenario, the software itself is purchased using a perpetual license model and deployed to and administered from a discrete platform.

Hosted & SaaS ERP: Two Roads Diverged

So SaaS and hosting are your two basic options for the underlying technology that will serve as the foundation for your ERP. If you are a customer in the midst of an ERP software selection journey, you need to understand what deployment options are available and how they differ, relative to the specific software you are evaluating. That said, I think some generalizations can be made regarding the two models.

SaaS itself can be divided into two categories. The first would be the family of applications that were built from the ground-up to be browser-based, web applications. Plex, NetSuite, and Salesforce are examples of purely web-based applications. 

Another class of applications would be vendors who are retrofitting their older, on-premise applications to be web-enabled and centrally installed and administered, like any other SaaS application.

In general, SaaS is a great option, especially for what I would consider lightweight applications. The software as a service deployment model provides the functionality you need with a costing model that your accountants will like, and it does this without a lot of administrative IT overhead. 

I say lightweight because I’ve found some challenges with some of the limitations of SaaS functionality. In my own efforts, working within various applications, I’ve found that SaaS applications provide a more limited functionality when it comes to the need for more robust capabilities. This is especially true in terms of reporting or administration, or in the construction of specialized business logic.

If you take a well-known software like Salesforce, for instance, and compare its capabilities to traditional on-premise enterprise systems, you’ll see some challenges or differences in the relative functionality of the two systems. An example might be the administrative tools provided to manage, load, and update data. The capabilities are somewhat comparable, but on-premise applications will almost always be more robust, easier to use, and more effective.

The Future of ERP Deployment Makes All the Difference

Currently, ERP software vendors understand this gap and are working to close it over time, but this process is years in the making. For vendors that offer both on-premise and SaaS versions of their applications, I’ve found that the functionality available in SaaS has a long way to go to catch up with their on-premise antecedents. If you were to purchase the SaaS version and the on-premise version of an ERP from the same vendor, you should expect the SaaS version to underperform compared to the on-premise version.

The resources on ERP deployment out there are not always very clear on what those differences actually are, especially when the information comes from the vendors themselves. 

For a hosted model, whether it is some form of self-hosting on top of an infrastructure as a service model, or a managed hosting situation, where a group is providing the entire platform, you can think of it as an on-premise installation without the risks and costs and overhead that come with an on-premise install. This is great from a functionality standpoint, as the control provides over the server architecture allows you to really leverage the full functionality available to you as a customer.

From my perspective, the difference between SaaS and hosted ERP really comes down to expectations with regard to functionality.

I have seen cases during the software selection cycle where the solutions engineers of various companies demonstrate the capabilities of their ERP systems using their full-bodied on-premise versions, only for the sales reps to actually sell the SaaS-based version of the application to the customer. 

This is done with the implicit assumption that the SaaS-based version contains all the rich features and functionality of its on-premise sibling. But as we’ve discussed, that this is not always the case, and I’ve known more than a few customers who express tremendous frustration over this experience—believing they are buying a luxury car, only to have the dealer deliver them the base model. 

How to Choose SaaS or Hosted ERP

If you are looking at a software that sprung from the web fully formed, like a NetSuite or a Plex, the question is a little more straightforward. There is no option to host the application, and from a functionality standpoint, what you see is what you get.

But if you’re working though the decision as to whether to purchase the SaaS subscription license or the perpetual license of an application, you really need to understand whether the functionality will be available in both versions. Essentially, you need to understand how the user experience might differ between the two versions, and then make your choice from there. 

Companies that need the robust functionality that comes with a perpetual license and an on-premise installation and can’t afford to lose that in moving to a pure SaaS or purely web-based architecture have hosting options. If you wish to avoid the liabilities and costs of an on-premise install, then you need explore some of the hosting alternatives available. There are plenty of benefits to be gained through leveraging the cloud:

  • the scalability
  • the dynamic consumption model
  • the benefits of adaptive computing

With these in mind, your cloud migration should also be done in a process that ensures that you are leveraging the full functionality of the software and not limiting yourself, your business, and your future in the process.

Cloud environments like hosted or SaaS ERP systems demand that your team is ready to handle everything from basic business processes to highly sensitive data. Cloud ERP is becoming the go-to jump, and a cloud based software solution could become a downfall without expert project management.

Software applications are becoming more complex, and your ERP solution will change regularly as your vendor adapts to changing technology. Are you looking for help understanding cloud infrastructure? Our cloud computing consultants have answers. Whether you’re trying to head out of community clouds or get lightning-strike level understanding of single tenant infrastructure, our EstesCloud team is here to help make your business run better.