October 24, 2011

2 Min Read
SMBs Help Drive SaaS-based ERP Growth

By Dan Berthiaume

The North American  SaaS-based enterprise resource planning (ERP) market remains promising for the next several years, according to a new report from Research & Markets. The study predicts SaaS-based ERP software revenue will experience a compound annual growth rate (CAGR) of 24.8% between 2010 and 2014. One of the key factors contributing to this market growth is the low initial investment required to implement SaaS-based ERP software, and the SaaS-based ERP Software market in North America has also been witnessing the emergence of open source SaaS-based ERP vendors. So outside of being a bonanza for lovers of acronyms, what does this news mean for MSPs serving the SMB sector?

In addition to having a relatively low cost of entry, SaaS-based ERP software also has a fast deployment time and is easy to upgrade. All of these factors make SaaS an ideal means for SMBs who normally do not have the financial resources or time to implement enterprise-scale systems to deploy ERP.

Therefore, it should come as not great surprise that commenting on the report, an analyst from TechNavio‘s Enterprise Applications team is quoted by Research & Markets as saying that increased adoption of SaaS-based ERP software by SMB enterprises in North America is a major trend in the market. SMBs find that the pay-as-you-use model of SaaS-based ERP software is in synchronization with their business objectives, and this is leading to their increased adoption of SaaS-based ERP software.

The Role of the MSP

Fortunately for MSPs, despite the relative ease of deploying SaaS-based ERP for SMBs, it is still a process which most cannot perform without outside assistance. For starters, ERP software is generally offered by larger IT vendors who typically focus their sales and support efforts on larger enterprises. That means an SMB who purchases a SaaS-based ERP solution will likely find the level of support they get directly from the vendor to be inadequate.

In addition, since ERP software interacts with most or all of the enterprise, it typically requires a good deal of integration. Again, the vendor is not likely to offer much assistance with integration at SMB scale, and SMBs probably cannot spare the personnel and time an integration of this magnitude requires.

So in terms of overall customer service/support and integration, MSPs can provide significant value to SMBs’ SaaS-based ERP implementations and help boost the long-term ROI of these projects in exchange for upfront costs. Even if you don’t like acronyms, that is a pretty good situation for everyone involved.

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