SAAS vs Hosted: Which e-procurement platform is more attractive?
In our previous blog we discussed the potential benefits of an e-procurement platform for non-profits. Truth be told, those benefits are there for any corporation or organization that wants to take advantage of them.
What benefits are we talking about?
Briefly, those benefits of e-procurement for your company or organization include:
– a decrease in procurement cycle time
– an increase in overall productivity
– reduction in both cost and errors
– improvement in vendor relationships
– stronger standardization of approval processes
– greater transparency regarding compliance with regulations and internal policies
– and improved security of data and documentation
Because e-procurement is less time-consuming than traditional processes your team can allocate more time to strategic planning, branding and growth strategies, and goal fulfillment.
But what is the best way to integrate an e-procurement platform?
Basically, there are two ways to move your company forward into e-procurement. You can use a hosted solution or a Software as a Service (SAAS) cloud-based solution to your procurement needs.
What’s the difference?
Hosted software is a computer program or suite of programs your company purchases and installs on a hard drive. It can then be hosted or made accessible via a domain. This type of product is serviced and supported by the company.
SAAS is software owned and managed by a provider like International Eprocurement (EIP). It is accessed in the cloud via online login. Multiple users across multiple platforms utilize it’s functionality.
How do I know which e-procurement platform is right for my company?
That’s a great question. There are many things to consider when looking at whether to purchase traditional procurement software or an SAAS. Let’s start by looking at installation and integration of each system.
Traditional procurement software generally is purchased, installed, hosted, and maintained. Some systems can cost up to $400,000 depending on the size of your organization. You’ll also need to have enough bandwidth to allow for use across all applications and you’ll need a redundant backup system in case of system/driver or power failure.
With SAAS services, you don’t have the up-front purchase. There is no license to purchase. Instead you pay an annual access fee which allows access across multiple platforms and from anywhere you have internet access. There is no installation, no hosting fees.
Traditional procurement software needs to be compatible with your existing ERP to allow for integration of the system. Integration requires IT support across the organization which can be challenging and expensive. Customization is done in-house by your IT team at your cost.
SAAS solutions are simple to integrate requiring no technical participation from the customer. If you’ve ever bought something from Amazon, you can easily integrate an SAAS into your existing protocols. Customization is done by your provider.
Now let’s look at the differences in learning curves and ease of use between these two systems.
Once you buy and install a traditional procurement system it becomes an in-house system. Your company is responsible for training and maintaining the IT department and end-user personnel to use the software effectively and take advantage of its myriad benefits. These systems have a learning curve which can take days or weeks until the system is effectively used.
SAAS solutions like International eProcurement offer live online training that takes about 45 minutes. The e-procurement platform needs to be configured to your organization’s specs. And the SAAS support generally handles the set-up and customization for you.
Most people log onto the internet every day to check e-mail, social media, or to shop so logging into an e-procurement system and navigating the online system is easy and quick to learn.
SAAS also offers a tremendous advantage in ease of access. it’s not tied into a single hosted service. SAAS services can be accessed from any device that has internet access.
But then, is a SAAS service less secure than a hosted service?
That depends on the SAAS you choose. Most offer back-up redundancies for data, security, and power.
An example I like to use is the security offered by International eProcurement to our customers.
We are currently running our technology platform on a Dell 1500C server running a custom configured Linux-based operating system. This server has been operating on a 99.9% uptime. The load on the server is an average of 0.4% and is fully capable of handling even the most aggressive traffic spikes.
Well, that sounds pretty secure but what about updates and maintenance of the e procurement software platform?
That’s where SAAS services really pull ahead. They don’t require the painstaking installations of traditional procurement software. You’re not stuck with having to update the program every few months or update the servers.
There is no “latest patch” to get and install.
With a SAAS like IEP, the provider takes care of updates for all their customers at the same time. A good SAAS provider manages the entire system so there is no need for the customer to buy additional hardware or bandwidth as you grow.
They will grow with you.
Another plus is that you can focus your IT and training staff to other important projects and critical support functions.
OK, I’m sold. Looks like an SAAS service is in our future. Now what?
If you would like to discuss what International eProcurement can do for your organization, contact us at 1-866-526-9266 or through our website.