Earlier, we explored how Software-as-a-service (SaaS) supply chain management (SCM) systems have experienced tremendous growth in Asia over the past two decades. The rapid growth of SaaS has also resulted in significant changes and improvements to modern services that may have gone unnoticed by organisations regionally.
If you are considering between implementing a SaaS and on-premise SCM system, here are some crucial differences between them to take into account towards making an informed decision for your organisation.
In any decision to digitalise your business, it is crucial to remain objective and informed about the latest state of digital solutions that exist, especially because SaaS systems evolve rapidly as new providers constantly enter the market.
Here are some common myths about the effectiveness of SaaS SCM systems you must know that no longer accurately represent the state of SaaS today.
This is the most common misconception held about SaaS systems. In reality, modern SCM systems have begun investing in security measures to protect their customers' data. These typically include encryption, firewalls, and intrusion detection systems to protect their data centres. As early as 2015, studies1 were concluding that SaaS applications could match or exceed on-premises applications security. SaaS applications are especially less likely to be hacked when they are hosted in secure data centres and are managed by a team of security experts.
The misconception that SaaS SCM systems are less secure may have come from early SaaS systems that were not as robust as today. However, modern SaaS SCM systems are proving they can be just as secure as traditional on-premise systems.
In truth, organisations of all sizes can find value in the adoption of SaaS for specific needs. SaaS SCM systems are often more cost-effective and budget friendly for small and medium-sized enterprises (SMEs) than traditional on-premises systems. This is due to a much lower startup cost without the need for acquiring data centres and specifically trained IT specialists in house.
Similarly, SaaS solutions can also offer better scalability and flexibility for established organisations that make business adjustments on a larger scale. For large organisations with more requirements, they can purchase full suite services that can include additional features such as container tracking and inventory management.
The misconception that SaaS SCM systems are not for organisations of every size stems from early SaaS systems that were limited in design for organisations operating at specific scales. However, modern cloud advancements have opened up SaaS opportunities for organisations of all sizes.
At the heart of this myth lies a concern that no SaaS SCM system possesses all the services and modules that your organisation requires, especially if it is a large business with unique needs. However, modern SaaS SCM systems are designed2 to be scalable and market-driven. This means that they often offer a wide and growing range of features, based on industry research and demand feedback, to meet the needs of both small and large target clients.
In the rare instances that your SaaS SCM system is not able to accommodate specific business requirements, time-tested and accessible workarounds still exist.
For instance, application programming interfaces (APIs) integration is often utilised by companies with open APIs to overcome this limitation. API integration allows organisations to combine the strengths of multiple SaaS systems, tailored to their individual business. For example, an organisation could use one SaaS SCM system for inventory management, another for warehouse management, and another for logistics management. By integrating these systems, organisations can create a more comprehensive and flexible supply chain management solution that meets specific needs.
This may explain why the vast majority of businesses that adopt SaaS SCM systems see it as a positive innovation3 to their operational systems. Ultimately, SaaS SCMs provide organisations a more visible and scalable view into their supply chain. This allows organisations to maximise efficiency and reduce downtime, optimising the supply chain experience for employees, suppliers and clients.
Conclusion
Many decision makers in both SMEs and MNCs find it difficult to keep up to date with the latest state of SaaS and cloud developments4. We get it, focus is crucial in a company of any size and micromanaging software choices can quickly become a chore, but it does not have to be.
Reach out to our supply chain experts at BriVge for answers to your questions and doubts about the adoption of cloud solutions for your SCM needs. We would love to help you make the best SCM decisions for your organisation.
Sources
1. https://link.springer.com/article/10.1007/s10796-014-9506-5
2. https://www.globenewswire.com/en/news-release/2023/06/15/2688786/0/en/SaaS-based-SCM-Market-2023-New-Research-Report-Unveils-Key-Insights-into-Growth-Opportunities-and-Trends-That-Are-Shaping-the-Future-of-This-Industry.html
3. https://www.alliedmarketresearch.com/saas-based-scm-market
4. https://d1wqtxts1xzle7.cloudfront.net/43889526/Cloud_ERP_Adoption_Opportunities_and_Concerns_-A_Comparison_between_SMES_and_Large_Companies-libre.pdf?1458396858=&response-content-disposition=inline%3B+filename%3DCloud_ERP_Adoption_Opportunities_and_Con.pdf&Expires=1693817351&Signature=DiJy7OaTUQXMsM3NnVtYoXCnvWH~eOJEkZhxRHqvr-~Qk3bSRUAJoi2elyPDqGsnAJ5~1~Y9PfI75Z-UP8IpevtXcbnrQs12nEQJyrUwK1P4ApSLR60S2nEXxmG0f~qk50U~ykIvPOQJ5vNIDaYTuyyPXtVex9tmzf8McvlDfln1rLYtwiCX2u3bn45vhj6dInFMmzQQooKtkwZ88C0pmnUVeIdmBvWsm~dKh4eBd~pmzCy4~yPnsfXFl4QnVCK~yCXpd8y8m8prsYRVnP2UfJpEzcI7T6AtE2rSdhmPlMrZieMbaBzDqJt~5odcpOz3e7TLscE7bjtBg7FdFW2hgA__&Key-Pair-Id=APKAJLOHF5GGSLRBV4ZA