Blog

Have you been wondering what the benefits of a hosted ERP solution really are?

Posted by Frank Gerome

Aug 2, 2017

Hosted ERP solutions provide a wealth of compelling financial and technical business advantages to today’s small and midsize organizations. These benefits include:

  • Minimized initial investment. Unlike conventional onsite ERP solutions, a hosted ERP solution does not require a substantial upfront investment. A typical onsite ERP implementation involves purchasing and maintaining servers, housing them securely, then deploying, configuring, and maintaining the software. In addition to a sizable upfront capital outlay, this also requires the time, effort, and associated costs of hiring and maintaining a staff of experienced IT personnel.

By comparison, with a hosted ERP solution the burden of implementing, maintaining, and keeping the application up to date is shifted from the customer to the solution provider. This approach eliminates the costs and complexities of installing and integrating additional hardware to support the software and hiring additional staff to support the application on an ongoing basis. As a result, a hosted ERP solution is particularly advantageous for small to midsize organizations with tight capital budgets and limited IT resources.

  • Accelerate and Increase Return on Investment of the Application. In keeping with the business model of SaaS applications, hosted ERP solutions can be implemented with relative ease and integrated faster into the organization’s day-to-day business than their onsite ERP counterparts. In fact, most typical hosted ERP solutions can be up and running in mere weeks, rather than months or even years, as may be the case with traditional onsite ERP software. This enables organizations to begin realizing the business benefits earlier, which, in turn, results in a more rapid payback, a greater return on investment (ROI), and a reduced total cost of ownership (TCO) over the course of the investment.
  • Seamless Upgrades. With traditional licensed ERP software, organizations typically must wait for the next release to benefit from the latest features, upgrades, or security patches. In addition, the cost, complexity, and potential disruption of moving to a new onsite software version often cause some organizations to defer upgrading to the newest release. This, in turn, prevents employees from taking advantage of the latest productivity enhancing tools consistently being added to the applications. Hosted ERP systems, however, eliminate this common problem. Under this delivery model, the provider continuously and unobtrusively adds latest features and upgrades, which means that users can be assured that they’re actually using—rather than waiting for—the latest technology, without drawn-out upgrades, customization, and consulting costs.
  • Reduced Dependence on Internal IT Resources. Hosted ERP systems typically require significantly fewer technical resources to manage than onsite ERP solutions because the hosting provider manages the software, hardware, and network administration. This reduces the strain on the organization’s IT department, allowing it to redeploy IT resources to focus on other, business-building tasks.
  • Make Changes on Demand. Hosted ERP solutions are easily scalable and flexible to meet changing business requirements. Adding or removing users can be done on demand and will simply change the monthly subscription fee. This flexibility is particularly beneficial for growing, seasonal, or cyclical businesses that need to quickly change their user base to meet their unique business requirements.