SaaS an affordable option for SMEs

BANGALORE, INDIA: Software-as-a-Service (SaaS) is one of the technology that shows clear benefits for the small and medium enterprises (SMEs).

Even the industry agrees that the SMB adoption rate of SaaS, particularly for ERP followed by CRM, is higher than the large enterprises.

The reason being the openness of smaller companies towards newer technologies as compared to the large enterprise, who generally are comfortable with the traditional technologies.

Additionally SaaS model gives flexible option for ERP/CRM deployment such as host-based model or on premise which does not require capex investments as in the case of traditional deployment.

The SaaS Summit 2009, organized by Ramco systems today in Bangalore witnessed discussion on the SaaS scenario amongst the Indian enterprises both large and small.

“Even though India is the second largest SMB hub, their IT spend is still very low and this gives a lot of potential for the industry,” said Ananthasayanam N C, general manager, Marketing, Ramco Systems.

“The Indian SMBs play a crucial role in the Indian economy with over 65 per cent of contribution towards the country's GDP and are part of a global supply chain but still face global competition,” he added.

Adoption of IT has always been a major challenge for SMB because of factors such as high investments, maintenance, lack of convenience, ROI apprehensions etc. The Summit today, discussed the challenges of growing SMEs and why they need to look at SaaS to improve their business efficiency to compete globally and add returns.

“Though the technology costs are coming down, the pay back period is difficult. Investments would not happen with out clarity of returns,” said M S Krishnan, professor of Business Information Technology at the Ross School of Business, University of Michigan.

The event also discussed about the delivery of ERP on a SaaS model, as a the next change wave of technology.

“ERP and CRM has not been accessible to the smaller companies at all,” added Krishnan.

He further said that now with the advent of Internet business models are changing. SaaS can ensure the capabilities of ERP and CRM to normal companies with less than hundred employees. It opens up opportunities to business and gives access of sophisticated ERP, as well as an adjustable payment model. The architecture not only provides businesses with efficiency but also allows flexibility of customization as per the business requirement.

P. R Venketrama Raja, vice-chairman and MD , Ramco Systems said that the SaaS model of ERP would prove to a platform of huge opportunities to the SMBs, who are looking at affordable yet comprehensive solutions.