Software is surely eating the world. SaaS startups are piece meal’ing one business problem at a time. This is certainly improving productivity of individuals and enabling small enterprises to become more efficient. But, are businesses setting themselves up to paying more in the long run?
Cloud based applications to run businesses is the way to go operating model and the trend continues with more and more organisations following this path.
Every day, there is a new startup in the market solving a problem in a different way. Software catalogues, marketplaces and digital marketing companies are abound and you can find a SaaS solution for pretty much anything you might do.
That begs a question. Is ERP still relevant?
Each business is an integrated entity that runs a core set of functions really well. Whether every function is fully or partly, internally specialised or externally sourced, the business needs to execute these functions well to succeed. Systems and people are what runs a business successfully. ERP is a business operating system that is built to ensure all relevant parts of a business are working according to design.
Although data integrations exist to connect the many SaaS solutions to each other, orchestrating an ERP across the many applications is a very costly and complicated endeavour. As businesses mature and scale, an ERP is a must have system.
ERP systems tend to lag in modernisation due to their sheer size. These days pretty much every ERP vendor has a cloud based SaaS offering and some are certainly better than others. It is wise to consider ERPs along with the shiny new SaaS offering in your system evaluations. No business stays the same and future planning is crucial.
How could a business using 21+ SaaS subscriptions to run many of its core functions, get itself setup to scale better?
It is important to review and consolidate the disparate parts of your business operating system at regular intervals. Technology is a moving landscape and there are always better options than last year.
Using SaaS solutions to build your business to a point cost effectively is a great strategy. Once you reach that point and start scaling, you will need to take a good look at your processes and build a better operating system for your business.
This could be a custom built database or custom built software or an entry level ERP with a small set of core modules. Best of breed SaaS can still be used to provide last mile extensions or unique value add.
The goal of building long term business value can only be achieved by systems that scale with you long term. This is where the right ERPs shine. Not all ERPs are equal.
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