ERP system as a service – why?

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It is becoming increasingly common, when upgrading or buying a new ERP system, to buy it as a service rather than an installed on-premises IT system. What are the drivers for this kind of service and what are the benefits of buying an ERP system via subscription? This is something that Lars Hellberg, Head of Product Management at Jeeves knows.

The trend of servitization transpires the entire society, and this is also applied to more complex products such as ERP systems. With buying this as a service, you can create benefits and increases the value for the user without having to invest in or understand the technology behind it. Why should you put energy into planning a menu and going shopping for all the food when you can get someone else to do it for you? Or for that matter have your ERP system locally installed and invest time in both hardware and training of staff when you can easily access the same ERP system via a website?

What are the advantages of subscribing to an ERP system?

- By outsourcing all the practicalities around the ERP system, you can free up valuable time from your IT employees whose skills can be used for more business-critical tasks. Especially when there is a great shortage of IT skills it is unnecessary to waste employees' time taking care of servers, doing maintenance and spending time on updates or ensuring that the system is secure, Lars explains. 

- We are seeing a shift where many companies are increasingly seeing the value of having their ERP as a service rather than operating it themselves on-premises. In addition, by having it as a service, you have one single point of contact if problems arise. Most of our customers who have their ERP on-premises have a number of different suppliers to contact. Usually, they have an operating supplier, consultants working with the system as well as the support department of your ERP supplier. If things go wrong, it will take time to find the right person to contact, and to find out what the problem is. If you have your ERP as a service, you only have one number to call, which is a huge advantage, says Lars.

If you already have an ERP system on-premises, what should you do?

If you already have your ERP system installed on-premises, you have the servers and IT staff who take care of it. Are there still reasons to switch to a subscription ERP system?

- I think there are several incentives to switch to the Cloud and to buy the ERP system as a service. In addition to freeing up resources and not having to make large capital investments in server parks, you also save time and can focus on developing your business. You get time to implement improvement projects and thereby streamline and improve the business, Lars explains.

- It also becomes more predictable both in terms of technology and cost and you also buy yourself peace of mind. You can rest assured that you will always have an updated ERP system with the latest bug fixes and functionality. It will also be easier to budget when you know what the ERP system will cost as you have a fixed monthly cost. Only if you decide to carry out improvement projects a cost will be added to your budget, says Lars.