CRM/ERP: SaaS or on-premise?

Implementing a CRM/ERP within an organisation means making some choices up front. There are two options: SaaS or On-premise. Each offers significant options. Comparing the costs of on-premise and SaaS solutions can prove complex because of the fundamental differences between these two models. Let's take a closer look at the details!

On-premise and SaaS: definitions

SaaS

The term SaaS (Software as a Service) refers to a software solution used by the customer within the licence provider's IT environment. The software is accessed online via a web browser. It is offered on a subscription basis by an external provider, who takes care of hosting, maintenance and updates.

On-premise

The term on-premise (on-prem or in-house) describes an IT solution that is not necessarily installed at the heart of the company's IT environment, but which is in any case administered directly by the customer. This means that all data is hosted "locally" within the company, giving full control over the security and management of information. This type of software requires a larger investment and regular maintenance by the company's IT team.

To compare the costs of the two models, you need to establish their TCO (Total Cost of Ownership) if you then want to be able to estimate an ROI (Return on Investment).

TCO: what is it?

Calculating the TCO means estimating the direct and indirect costs of purchasing a product or service. This therefore takes into account the initial purchase price (hardware, licence…) but also all the costs of implementation, customisation, backup, training and maintenance.

The TCO of a SaaS CRM/ERP

The SaaS business model is based on subscription. Generally speaking, it is more scalable and, as far as equipment spending is concerned, you do away with heavy, expensive server and network infrastructure and IT staff. The focus is more on end-user devices, whether computers, tablets or smartphones.

User training costs will be broadly the same, and close attention should be paid to data security. With SaaS, data becomes volatile by nature, since it easily leaves the company, so rigorous rights management is essential, taking into account regulatory compliance and the responsibilities of users and managers.

The TCO of an on-premise CRM/ERP

In the TCO of an On-premise software solution, you need to take into account:

• The hardware infrastructure: servers, storage, network (…) for production, backup and periodic renewal,
• Licences,
• Installation, configuration and customisation costs,
• Maintenance and updates,
• Security,
• Initial and ongoing user training,
• A dedicated team able to step in if a problem arises, either in-house or via an integrator.

Conclusion

Only once you have determined the costs of the two possible options and their format can you calculate an ROI to measure precisely how these solutions have helped the company progress, both qualitatively and financially. eKo is a SaaS CRM/ERP solution. Your business data is hosted and secured in a Luxembourg data centre. eKo is accessible online, from anywhere and on any device (phone, tablet, PC...).