Page 48 - MetalForming April 2015

Study:
More Companies Considering
Software-as- a-Service ERP
Adoption of SaaS deployments of ERP has lagged behind that of other applications. Entrusting a SaaS solution provider with the trans- actional system of record for a business requires a higher level of trust than it might to hand over other applications.
That sentiment however is changing and barriers to acceptance appear to be breaking down. Each year Mint Jutras asks participants in its ERP Solution Studies what deployment options they would consider if making a decision now. The options shown in Fig. 1 were defined as follows in the 2014 study (Mint Jutras has data for its 2015 study, which the company will present at Met- alForming magazine’s The Manufac- turing ERP Experience, April 14-16 in Rosemont, IL):
• Software as a Service (SaaS): Soft- ware is delivered only as a service, not on a CD or other media to be loaded on your own (or another party’s) computer.
• Hosted and managed by your ERP vendor: Software is licensed by you but you pay your ERP vendor to manage and maintain (host) hardware and software.
• Hosted by an independent third party: Software is licensed by you but you pay another party to manage and maintain (host) hardware and software.
Cindy Jutras is founder of Mint Jutras LLC; www.mintjutras.com.
While companies have seemed willing enough to let the applications that surround and extend enterprise resource planning (ERP) reside in a Software as a Service (SaaS) environment, they were less willing to place their systems of record in a cloud that they did not specifically own or control. A 2014 study reveals a change in that thinking.
BY CINDY JUTRAS
• Traditional licensed on-premise: You license the software and are responsible for managing and main- taining it on your own premises.
For the past few years, the “SaaS” and “hosted and managed by your ERP vendor” options have run neck and neck in our study. Indeed, the differ- ence between these two options is often blurry and many equate “hosted by your ERP vendor” to a single-tenant SaaS solution. The clear implication is a preference for cloud and interest in relieving themselves of the burden of simply “keeping the lights on.”
But what we find more interesting is the decline in the willingness to con- sider traditional on-premise deploy- ments. Prior to the start of the global economic crisis in 2008, the percentage willing to consider traditional deploy-
ments would have been in the 90s. By 2011 it had dropped significantly. While it rebounded somewhat this year, at 43 percent it still lags behind SaaS.
Before you assume SaaS deploy- ment is just for small companies, con- sider Fig. 2. The willingness to consid- er SaaS ERP actually increases as companies grow, with the highest level of interest from large enterprises, which also are the least likely to consider tra- ditional on-premise deployment.
Figs. 1 and 2 aggregate responses from all companies, regardless of cur- rent deployment models. For Fig. 3 we distinguish between those actually operating under a SaaS model and those operating under all other deploy- ment models. Those running SaaS are extremely unlikely to return to an on- premise installation. We point this out
46 MetalForming/April 2015
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