Companies looking to invest in enterprise resource planning (ERP) software will be pleased to find that modern technology has opened the doors for a multitude of new features. There are a scores of ERP packages to choose from, enough to make your head spin if you're not careful.

One of these options is Software-as-Service, or SaaS. Instead of deploying ERP solutions from in-house servers, as is traditional, SaaS allows companies to invest in a software that is housed off-premise — in the cloud, for example. Many popular vendors, like Microsoft with it's Dynamics NAV product, now offer both options. But which one should your business choose? Here are three key variables that will factor in to your decision:

Simplicity: SaaS is usually simpler to deploy than on-premise ERP. Your company will not need to purchase extra servers or install the software. Instead, all that is needed is a reliable, high-speed Internet connection.

The technical ease, however, is a symptom of this option's age, which can be a problem. Younger, more modern software solutions have not had the time to mature, unlike on-premise ERP systems, which means that there may be some key functionalities missing.

One way to avoid this is to opt for the SaaS version of a traditional ERP package — like Microsoft Dynamics NAV — to ensure that years of vendor experience went into putting the SaaS option together.

Flexibility: Traditional ERP software is installed directly on your servers, which means you own the software and can do what you like with it. You can add customizations or integrate it with other software. SaaS, however, comes in one-size-fits-all.

Many solutions are built on multi-tenant architecture, meaning that customers all share the same applications. When new functionalities or upgrades are introduced they are introduced to everyone. You might have to change business processes, regardless of whether it helps your company or not. This can cause issues for companies with highly specialized processes, such as those in the manufacturing industry. 

However, SaaS also reduces technical complexities involved with software deployment. Companies will not need to bring in teams to conduct upgrades, and will be able to stay up to date with the latest developments in SaaS technology without lifting a finger.

Cost: Generally SaaS has much lower initial cost and a lower overall cost of ownership. Small to medium-sized businesses can reap the benefits of an ERP solution, without sacrificing revenue to costly licenses, complex hardware, software infrastructure and technology maintenance. At the same time, SaaS tends to come with an annual payment or monthly fee. Overtime these costs can rack up since your business will be paying for the software as long as it is in use.

There are a number of tradeoffs to be had between SaaS options and traditional on-premise ERP. If you are interested in learning more about the benefits of each version, contact Accent Software. We are a Microsoft Business Solutions Partner with years of experience in business management software solutions.