ERP software as a service (SaaS) is gaining popularity wherein the software application is installed on the provider’s server instead of the user’s computer. Earlier the organizations had to buy the license of the applications. This involved large investments on software and the hardware. The disadvantage of this approach was that the buyer had to pay a hefty license fees every time the application was used on a new machine. The organization needed to hire consultants and professionals to run the ERP applications and so spend on hiring support staff. With the changing policies, new investments get necessary and the organizations have to keep updating their hardware equipments. These disadvantages are not faced in ERP software as a service (SaaS).

ERP software as a service is a way of deploying ERP software in an on-demand environment. In this method, the software as a service software model allows for the Enterprise Resource Planning software to be rented for a long time. The software is hosted via a third party provider or ASP. The benefits of ERP software as a service are that it is a low cost software implementation and it is easy to use. The implementation is easy and no license has to be bought for new applications. The expenses can be reduced on the hardware purchases and the fees paid to the provider are predefined depending on the quality and number of services used.

For using ERP Software as a service (SaaS), the organization has to buy the subscription of the SaaS and pay to use the application software installed. The speed of service, the quality of service and the number of calls made on the server all contribute to the cost of the ERP software as a service. The service provided is customized according to the needs of the buyer. The provider agrees to offer information about the hardware requirements, implementation time and other services. The provider agrees to offer customized services as specified by the client.

While ERP software as a service (SaaS) provides many benefits, it may not be perfect for all kinds of organizations. All vendors do not provide SaaS software model and those vendor which do provide, may limit the ability to alter the software. This can act as a deterrent for the organizations that are looking for a highly customized solution. As users cannot modify the software they are using, they do not have control over their own computing. Apart from these disadvantages, the benefits are many. It is accessible from anywhere with an internet connection and it offers rapid scalability.

The service includes backup, security, updates and maintenance usually and there is no local server installation. It is a low cost way for business to utilize the software as required rather than paying licenses for every application on each machine. The capital expenditure is reduced and it involves faster implementation. With lower implementation and upgrade costs, ERP software as a service (SaaS) is catching on in the market. SaaS has become a common model for various business applications other than ERP.

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