Web-based ERP Systems : With a focus on SMEs

Web-based Enterprise Resource Planning (ERP) Systems deployed through theSoftware-as-a-Service (SaaS) model are a major disruptive technology in the fieldof ERP systems. The defining features of the SaaS are that they are hosted remotelyand are completely used through the web; they are subscription-payment basedand they operate on a multi-tenant fashion. This technological innovation redefinestraditional technical and economic ERP paradigms. This Bachelor’s thesis aims through interviews with vendors, users and consultants,as well as by researching various academical and professional publications onthe subject of Web-based (SaaS) ERPs to study these pehomena, and produce a listof their benefits to SMEs. It also analyses their opportunities and challenges via anumber of interesting facts, thus allowing for thought-provoking observations andspawning of stirring discussions. The benefits of Web-based ERPs were reported to be similar to the ones characteristicfor the On-premise ERPs. They furthermore included remote data access, costefficiency,flexibility, scalability, as well as the esublishment of a new customerdrivenrelationship with the ERP vendor. The major disadvantages of SaaS wereconsidered to be security, cost (in the long run), and customizability. These disadvantages,which were first reported years ago, are continuously dismissed by theadavncements and innovations made in Web-based solutions. Findings from previousstudies and trends suggest that issues of security, cost and customizabilityare gradually disappearing as technology improves and industry dynamics becomesmore customer-centric. Security, which was a major issue in 2007 slowlyfaded and is not regarded as the concern it used to be. From 2008 till now the issuesof customizability and TCO have been heavily disputed about Web-based ERPsolutions. The problem of customizability has also been found to be diminishingdue to technologically advanced capabilities of these systems; new systems haveemerged and old systems have improved enough to provide this feature. Cost hasnever been a transparent issue when it comes to IT investments and has beenshown to be higher in On-Premise solutions through the TVO approach whichlooks at other hidden and non-financial costs. All of the above sheds new light intothe once-‘static’ benefits and drawbacks of Web-based solutions, and provides afresh insight into this developing phenomenon