A N E P I C O R W H I T E PA P E R

SaaS ERP: A Viable Model for Job Shops and Small Manufacturers
Epicor Manufacturing Express Edition

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Executive Summary
In the face of growing competition and a challenging business climate, many job shops and small manufacturers are looking for ways to reduce costs, streamline operations, and improve the bottom line. Implementing enterprise resource planning (ERP) software is a proven solution for running a business efficiently and effectively. Yet, a large percentage of job shops and small manufacturers have held back from implementing an ERP system due to high initial costs, long implementation times, and competing demands for time and resources. This paper describes how the software as a service (SaaS) model delivers financial, implementation, and operational benefits to job shops and small manufacturers. It also describes how Epicor Manufacturing Express Edition, a comprehensive ERP system deployed in the SaaS model, meets the needs of job shops and small manufacturers. With Epicor Express, job shops and small manufacturers now have the opportunity to implement an ERP solution that can help transform their operations and their business.

SaaS ERP: A Viable Model for Job Shops and Small Manufacturers

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Table of Contents
Small Manufacturers and Saas Adoption . . . . . . . . . . . . . . . . . . . . . . . . . Benefits of the SaaS Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Low Initial and Predictable Ongoing Costs . . . . . . . . . . . . . . . . . . . . . . . . Faster Implementations and Time to Value . . . . . . . . . . . . . . . . . . . . . . . . Reduced Cost of Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Greater Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Improved Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reduced IT Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Improved Business Focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Epicor Manufacturing Express Edition . . . . . . . . . . . . . . . . . . . . . . . . . . . About Epicor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 2 2 2 2 2 2 3 4

SaaS ERP: A Viable Model for Job Shops and Small Manufacturers

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Small Manufacturers and Saas Adoption

As job shops and small manufacturers attempt to keep pace with escalating competition and a demanding business environment, most realize that an ERP system can help streamline their business processes and improve operational efficiency. However, more than half of the manufacturers with fewer than 50 employees today operate without an ERP system, according to Gartner, Inc1. High initial costs (including software, hardware, and supporting infrastructure), lengthy and complex implementation projects, and the staffing necessary to implement and maintain ERP systems all become barriers to ERP implementation or upgrading. These practical concerns are key factors driving the increasing adoption of SaaS solutions within job shops and small manufacturing companies. Indeed, Gartner2 forecasts that SaaS deployments for enterprise software will grow 19.4% annually between 2008 and 2013, and by 2013, 14% of all enterprise software will be provided in the SaaS model. With traditional on-premise software deployments, customers purchase, install, manage, and maintain the software as well as supporting infrastructure, such as hardware and networks, in house. In a SaaS deployment, the software vendor hosts, manages and provides customers access to the software as a service over the Internet. Rather than pay for the software up-front out of their capital budgets, SaaS customers license it on a subscription basis, usually per user, per month or per a specified number of transactions. On-going maintenance, upgrades, and support for the software and infrastructure are all the responsibility of the software vendor and are included within the subscription fee.

Benefits of the SaaS Model

While this paper has briefly mentioned some of the benefits of the SaaS model, the model offers a wide range of financial and operational benefits for manufacturers including: Low initial and predictable ongoing costs Faster implementations and time to value Reduced cost of ownership Greater reliability Improved support Reduced IT complexity Improved business focus

Low Initial and Predictable Ongoing Costs

Because SaaS solutions are provided on a subscription basis, companies with limited budgets can substantially reduce their initial capital costs of investing in an ERP system. Instead, the software becomes a monthly operational expense that allows customers to spread the cost over time in a pay-as-you-go manner. In addition, most SaaS vendors provide assurances that customers will not face large fee increases to continue using the solution once the initial term expires by capping fee increases.

1 2

Gartner-DataQuest Insight, SaaS and Manufacturing ERP can Complement Each Other, By Robert P. Anderson, September 2, 2007. Market Trends: Software as a Service, Worldwide, 2008-2013 The Gartner Group, May 5, 2009.

SaaS ERP: A Viable Model for Job Shops and Small Manufacturers

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Faster Implementations and Time to Value

As SaaS solutions are hosted and managed by the vendor, customers have no hardware to set up or software to install. The implementation is solely focused on configuring the system and, if necessary, importing data. Advanced SaaS ERP systems come preconfigured based on best practices to further simplify and expedite the implementation process. This translates into faster, less complex implementation projects. Because implementation is rapid and customers invest little up-front capital, but receive the benefits from the system as soon as they go live; customers achieve a faster return on their investment.

Reduced Cost of Ownership

With a SaaS solution, customers pay only for users that actually use the software. Businesses dont need to invest in all the peripheral resources and technology to support an on-premise deployment. If the needs of the business expand over time, the customer simply adds users at a prespecified cost without worrying about investing in additional resources (e.g., hardware). In addition, with a shared, multitenant SaaS model, vendors can pass along lower costs due to the economies of scale achieved through the use of a shared data center, network, and management services.

Greater Reliability
SaaS vendors typically offer reliability that exceeds that provided by the IT departments within most job shops and small manufacturers. Due to the economies of scale associated with SaaS solutions, vendors can make significantly greater investments in skilled staff and technology than an individual company. These investments go towards ensuring performance, reliability, and security. In addition, most SaaS vendors offer service level agreements that guarantee uptime, typically 99.5%, assuring customers of system availability.

Improved Support
When a customer reports a problem with an on-premise solution, that problem could easily be related to the hardware at the customer site, interactions with other software, the network, or other components that the remote support site has no visibility into, making troubleshooting difficult and time-consuming. However, in a SaaS environment, the vendors development and support teams control the entire environment, which gives them a high level of visibility and enables better, faster service.

Reduced IT Complexity
The SaaS model transfers the burden of managing and keeping the system up-to-date and running from the customer to the software vendor. The software vendor takes responsibility for maintaining the entire infrastructure including: networks, storage, operating systems, databases, application servers, Web servers, disaster recovery, and backup services. Further, SaaS eliminates the need for customers to upgrade their software to the latest release and to update outdated infrastructure (including hardware) to support major software upgrades. The software vendor takes responsibility for all upgrades, ensuring that the system is always running on up-to-date hardware and the latest software version.

Improved Business Focus

Finally, one of the most important benefits of the SaaS model is that it frees the customer from the responsibility of maintaining and managing the hardware, software, and infrastructure associated with ERP systems. Instead they can focus on and devote their time, staff, and resources to their core business and new strategic opportunities.

SaaS ERP: A Viable Model for Job Shops and Small Manufacturers

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Epicor Manufacturing Express Edition

Epicor Manufacturing Express Edition is a comprehensive ERP system deployed using a SaaS model that brings together the broad range of functionality that job shops and small manufacturers require into one integrated solution. With its ability to manage everything from opportunities to orders to operations, Epicor Express eliminates the need for separate applications, spreadsheets, and work-arounds. Further, it supports the wide range of manufacturing types (e.g., job shop, machine shop, plastics extruder, and stamper) and manufacturing processes (e.g., make-to-stock and make-to-order). And Epicor Express is flexible enough to support the variety of accounting, costing, and production processes common in the manufacturing industry. For more than two decades, Epicor has provided software to manufacturers of all sizes. Today thousands of job shops and small manufacturers use our solutions to effectively manage their businesses. Experience matters when it comes to delivering a product or service that meets the needs of an industry and the right software solution can help you transform your business and operations. Epicor Express is such a solutionproviding broad functionality, specific to the needs of manufacturers, priced affordably, and delivered in a manner that minimizes complexity. Contact us to learn more about Epicor Express and how it may be right for your business.

SaaS ERP: A Viable Model for Job Shops and Small Manufacturers

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About Epicor
Epicor Software (NASDAQ: EPIC) is a global leader delivering business software solutions to the manufacturing, distribution, retail, hospitality and services industries. With 20,000 customers in over 150 countries, Epicor provides integrated enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM) and enterprise retail software solutions that enable companies to drive increased efficiency and improve profitability. Founded in 1984, Epicor celebrates 25 years of technology innovation delivering business solutions that provide the scalability and flexibility businesses need to build competitive advantage. Epicor provides a comprehensive range of services with a single point of accountability that promotes rapid return on investment and low total cost of ownership, whether operating business on a local, regional or global scale. The Companys worldwide headquarters are located in Irvine, California, with offices and affiliates around the world. For more information, visit www.epicor.com. Disclaimer: This document and its contents, including the viewpoints, dates and functional content expressed herein are believed to be accurate as of its date of publication, January 2010. However, Epicor Software Corporation makes no guarantee, representations or warranties with regard to the enclosed information and specifically disclaims the implied warranties of fitness for a particular purpose and merchantability. All information contained herein is subject to change without notice. The usage of any Epicor Software shall be pursuant to an Epicor end user license agreement and the performance of any consulting services by Epicor personnel shall be pursuant to Epicors standard services terms and conditions. Epicor is a registered trademark of Epicor Software Corporation. All other trademarks acknowledged. Copyright 2010 Epicor Software Corporation. This document includes descriptions of product functionality that is not presently available. This document is intended to communicate Epicor Software Corporations current intentions as of January 2010. However, Epicor reserves the right to make modifications or changes to the functionality, release dates, technology, initiatives and plans described herein as business conditions dictate and without further notice. This document is not intended to obligate Epicor or any other entity to such functionality, release dates, technology, initiatives and plans, but merely to inform the audience of Epicors current intentions. This document also includes many forward-looking statements regarding anticipated product functionality, targeted release dates, availability of technology and certain company initiatives. These forward-looking statements, which are not historical fact, involve risks and uncertainties and actual results might differ materially. Such risks and uncertainties include but are not limited to: the companys ability to rapidly develop and introduce new products; reliance on third party products; reliance on emerging technologies and markets; the timely availability and market acceptance of new products and upgrades; the impact of competitive products and pricing; and the discovery of undetected software errors and other factors discussed in the Companys Annual and Quarterly reports, including on Form 10-K for the year ending December 31, 2008 and Form 10-Q for the period ending September 30, 2009. As a result of these factors, the business or prospects expected by the company as part of this paper may not occur. The company undertakes no obligation to revise or update publicly any forward-looking statements. For more information, contact Epicor Software Corporation: info@epicor.com or www.express.epicor.com.

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SaaS ERP: A Viable Model for Job Shops and Small Manufacturers