Integration is driving the need for new systems - integrated business systems blog

Integration is Driving the Need for New Systems

There are a few contributing factors that have led to changes in how people look at and buy new business software. Some of the consideration comes from end users becoming more knowledgeable about business software, and some has to do with the business climate changing over time, but regardless, there is an increased emphasis on opting for software that lends itself well to integrated business systems. Learn more about the history of how the demand for increasingly integrated software has grown over time.

The History of Integrated System Demand

1980s – 1990s: PCs are first used to automate processes

Personal computer-based accounting software has been available almost since the first PCs were introduced in the early 1980s. In the late 1980s and ‘90s, businesses invested in new software mainly to automate processes that were previously manual (think accounting applications like keeping a general ledger, accounts payable, accounts receivable, and payroll). Because small- and medium-sized businesses didn’t have a lot of automation to begin with, it took several years for companies to move from manual to automated, computer-based systems.

Y2K: Current systems are brought to higher standards

However, 1999 changed a lot for software businesses. Many people feared the “Y2K Problem,” that computers around the world would fail when their dates changed from 1999 to 2000. In response to this fear, many businesses upgraded their systems to make them as current as possible.

We know now that the Y2K fear was really a dud, but afterwards, many businesses looked at what else they could do with their systems. They focused more on distribution and manufacturing, and less on back-office accounting. Inventory control, order entry, purchasing, and manufacturing became key issues to focus on when selecting a new, more integrated business system.

Early 2000s and beyond: Software is used to satisfy system demands

As new business needs and customer demands have surfaced over time, companies have traditionally searched or software to resolve them. Accounting software, Excel spreadsheet, CRM, and databases were purchased and created to meet these needs.

In the early 2000s, large companies were getting lean by requiring suppliers to accept purchase orders and send shipping notices and invoices electronically instead of by paper. Electronic Data Interchange (EDI) grew as a result.

When the recession hit in 2008/2009, many businesses were forced to get lean with personnel and increase their use of technology to do more with less people. We can still see the effects of these initiatives in businesses today.

Customer Relationship Management (CRM) tools have become a hot topic over the past few years, as companies seek to better understand the complete relationship with the customer or prospect all along the sales pipeline, starting with lead generation and qualification, moving to quoting and order entry, all the way to customer service and profitability.

Today: The hunt is on for integrated business systems

As businesses grow, managing multiple systems becomes more time-consuming and inefficient. When Chortek assists clients with system selection, we find that most of the businesses are looking at taking their independent and non-integrated systems and replacing them with one system that can handle all aspects of the business. They want a tool that can handle prospects, quoting, order entry and production, inventory management and purchasing, and back-end accounting and financial reporting.

Business needs have changed over time. So has the power and flexibility of integrated software to meet increasing demands. Technology has become more important than ever in its role of efficiently meeting customer needs and providing increased profitability to ensure the future success of the company. Today, we are relying more on process and technology and less on people.

Want to know how Chortek can help you solve your greatest system integration challenges? Contact us today or email Steve Krueger, our Business Technology Consulting (BTC) Principal, to learn more about our services.

 

 

Are SaaS Solutions Right For Your Business?

Are SaaS Solutions Right For Your Business?

Software as a Service (SaaS) is a distribution model for software with wide-reaching applications. With SaaS, businesses can use and access software hosted by a third party as an enterprise resource management (ERP) cloud solution. But, are SaaS solutions the right fit for your business? In this blog, we review deployment options for software, providers, vendors, and the potential future for SaaS/Cloud ERP solutions, so you can better determine what makes sense for your business.

Deployment Options

On-Premise

On-Premise software is installed on your servers. Because it is onsite, and not hosted by a third party, you will be responsible for upgrading the operating system (OS) and physical box periodically. You will likely need an internal IT staff member to maintain systems, or you will need to contract with an IT provider.

While you own rights to the software, you will probably pay annual maintenance for access to new versions. If you stop paying the maintenance fee, you can generally continue to run on the version you own and have access to your data. However, losing support for the version your business is using can lead to problems down the road.  You will also have fees every year or two to upgrade your software to the current version.

The infrastructure of this software will be on your shoulders: You need to provide your own backup and remote access to the system. You also need to maintain the quality of the infrastructure so that the end user experience isn’t compromised.

Summary:  You own the software, pay an annual maintenance fee for access to new versions and fees for the actual upgrade for versions you wish to deploy.  Hardware is yours to maintain including operating system, backup, remote access, firewall and antivirus.

Hosted

Hosted software is the same as on-premise, with server location as the exception: It is installed on someone else’s server, which you have to pay monthly per user for the access. With this hosted service, a few responsibilities move to the host: They provide data backup and IT services for the software.

Generally, you can access hosted software from any computer connected to the internet. Because internet access is required, however, this may be a possible bottleneck to user experience.

Summary: You own the software, pay an annual maintenance fee for access to new versions and fees for the actual upgrade for versions you wish to deploy.  Hardware is someone else’s that you pay a monthly fee per user to access including backup.  Internet access becomes critical but you have access from anywhere anytime.

SaaS/Cloud

With a SaaS/cloud solution, there is no install required for your business. You also don’t need to worry about periodic upgrades to the software. The cloud-hosted ERP provides backup, you can access from any internet-connected device (not just desktop computers), and you pay per user, per month for access to the system. You do not need an internal IT team to use the software, either.

However, the deployment option is not without its drawbacks. If you stop paying for the service, you lose access to the system and data. You are also completely dependent on an internet connection to access your systems. It may appear initially that SaaS is the most expensive option, but complete the cost comparison of all options to get a better picture of what SaaS might save you in the long-run. Primary SaaS/cloud ERP providers include Intacct, NetSuite, and Acumatica.

Summary:  You pay a monthly fee per user to access the system.  No upgrade fees and no infrastructure fees.  Internet access is critical.

Summary Matrix

On-Premise

Hosted

SaaS

Own the Software?  Yes Yes No
Upgrades Required?  Yes Yes No
Own the Infrastructure?  Yes No No
Internet Access Required?  No Yes Yes
Remote Access?  Limited Yes Yes
Industry-Specific? Yes Yes Limited

Is SaaS a Good Fit For You?

You might be reading through these deployment options and still have no idea whether SaaS is a good fit for your business. Here are a few scenarios you might be in where SaaS can be the perfect fit:

  • You are looking for software that has financial and CRM functionality only
  • You have a small- to medium-sized company with standard, non-industry-specific needs
  • You are a startup company that needs to deploy quickly with little to no IT resources
  • You have multiple locations and/or remote employees where the cost of IT infrastructure would be high to support the business model with other deployment methods

So, where might SaaS not be a good fit? If you have industry-specific needs, or are in a vertical that is not currently being catered to by a SaaS/cloud software solution, you may want to look for a more customized option. Vertical markets are rapidly being released, but at what bleeding-edge cost compared to proven on-premise solutions?

Distribution and Manufacturing Industries and SaaS

Even if you have industry-specific needs, you may still find a tool that works well for you. Acumatica, for example, has currently deployed an ecosystem best for distribution and manufacturing companies. Here are a few other things to consider for distribution and manufacturing industries when it comes to SaaS solutions.

Distribution

When it comes to distribution, the SaaS solution fit really depends on the vendor. Consider whether the tool is a fit for not only inventory, but shipping integration, warehouse management, and web/ecommerce integration before you commit to a purchase. Another thing to think about: The fit generally comes from the integrated third parties, not from the main cloud provider itself.

Manufacturing

Manufacturing processes are the most difficult to move to the cloud because you need to integrate with machines and people on the shop floor. On-premise solutions have been around longer, and have deeper functionality than cloud solutions, so SaaS may not be your best bet in this case. Once again, many of the industry-specific solutions are provided by integrated third parties.

The Future of SaaS/Cloud Solutions

While some cloud solutions are moving faster than others depending on industry, on-premise solutions have been around longer and have deeper functionality. Cloud providers will need time to catch up, but what else do we see in the future of SaaS solutions?

Many of the primary vendors have created the platform for developers – Platform as a Service (PaaS) – to add industry-specific functionality to their tools. This will help them compete with established on-premise solutions without having to create the solutions themselves.

If you’re still trying to determine which solution is right for your business, contact the experts at Chortek today through our online form, or email Steve Krueger, our Business Technology Consulting (BTC) Principal, to learn more about our services.