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Watch for Pitfalls from On-Premise Software

In the long term, SaaS will prove to be the smart choice for most businesses

In a tough economic climate everyone is looking for ways to cut costs without sacrificing performance. More and more small and mid-size businesses are realizing the benefits of business management software. Enterprise Resource Planning (ERP) systems and other business management tools are prohibitively expensive to develop in-house and there's simply no need when you can find great solutions in the marketplace; however, buying a product straight off-the-shelf can prove to be a false economy.

What Are the Risks?
Your first headache when implementing any new software or service is going to be integration. Do you have a dedicated IT department with time to roll out new software? Many packages have a steep learning curve and installation can be more problematic than expected. There will also be ongoing overhead involved in keeping the software up to date.

If you intend to plug into existing systems, then compatibility and security will be another concern. Will you need to splash out for multiple software packages in order to effectively manage and analyze your business? Will those solutions play nicely together? Do you have compliance issues in terms of security guarantees for your customers?

You should also look to cater for mobile device access, which is increasingly complicated by the bring-your-own-device (BYOD) trend. Secure access to the information and functionality that you need, wherever you happen to be, is essential if you are really going to reap the benefits of business management software.

Another major issue with most off-the-shelf options is the fact that one size does not fit all. A set of generic features cannot possibly cater to the nuances of every individual industry. You will need industry-specific solutions that have been designed by industry experts. Ideally you'll also have the ability to further tailor that software to meet the demands of your business.

The Benefits of Cloud Computing
The good news is that there are ready, cost-effective solutions that can circumvent and mitigate these concerns. SaaS can be the perfect middle ground between an expensive bespoke solution and something off-the-shelf.

Marco Limena, vice president, Operator Channels at Microsoft put it like this, "The cloud levels the playing field for SMBs, helping them compete in today's quickly changing business environment by spending less time and money on IT and more time focused on their most important priority - growing their businesses." Research by Edge Strategies revealed that "59% of companies currently using cloud services report significant productivity benefits."

By considering a cloud-based service you can eliminate installation and upgrade issues at a stroke.

Cloud-based software is growing more mobile and secure and cost-effective with every passing year. By allowing you to access your business management tools through a web browser or a mobile app, it can free you from the shackles of the desk. You can access the information you need and effectively run your business from anywhere.

An effective cloud-based solution will also enable multiple points of entry for different members of your staff. Collaboration should be a breeze with the ability to define workflows and roles and deal with situations in real-time without having to go outside the system to communicate via email, chat or phone. That should also give you a solid record of completed tasks, expenses and invoices so you have a central repository for your business records. Over time, that information can prove invaluable, especially if you choose a system capable of providing analysis and reports.

Things to Ask
With any solution you look at, it's vital to examine the ongoing support being offered. Do you have access to technical support? Can you expect to benefit from upgrades and updates to the system going forward or will you be asked to outlay more cash? Will there be any set up costs? You also need to verify the suitability of the software for your specific industry and see that it ticks off all your boxes. Does the software have industry best practices built-in for your specific sector?

Make sure you know the answers to these questions before you decide. Off-the-shelf business management software may look economical on paper, but SaaS will prove to be the smart choice over on-premise software for most businesses in the long term.

More Stories By Richard Minney

Richard Minney is co-founder of iBE.net,, a developer of business management software for SMEs. He has nearly 20 years of ERP experience as a developer, consultant and project manager. Previously he was executive VP for Product Innovation at HCL-Axon, responsible for the company's successful ERP add-on solutions business. Before that, he was co-founder of Feanix, a $20m SAP systems integrator with clients like Sikorsky Aircraft and Pratt & Whitney. He spent nine years at U.K.-based Druid Group plc, building SAP’s first industry add-on solution for aerospace and defense. He began his career at Ford and Rolls-Royce. He has a Masters in computer integrated manufacturing from Cranfield University, and a MA in engineering from University of Cambridge, Oxford. You can reach him at richard.minney@ibe-erp.com.

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