Enterprise resource planning (ERP) Part 1: Is your ERP SW licensing aligned to your ICT strategy?
Conclusion: ERP SW licensing or Software-as-a-Service (SaaS) has many permutations and influences one of the largest IT investments for most organisations. Vendors aim to integrate, at a minimum, shared corporate data from financial data, HR, operations and sales. The benefits of aligned data, reporting and processes helps C-level decision makers track and improve organisation performance.
The most common arguments for implementing an ERP system are the cost savings and productivity improvements1. Effective SW governance is essential to avoid eroding expected cost savings or efficiencies.
Large government departments, local government authorities, public listed corporate entities or privately owned entities are all likely to have significant investment in an ERP and will need continued investment in the ERP if ongoing value is to be extracted. Small to medium organisations tend to be more agile and may be able to migrate to a SaaS solution to take advantage of lower migration costs and more cost-effective licensing arrangements.
Either way, modernisation or migration programs are opportunities to renegotiate SW licensing costs provided the pros and cons have been assessed.