Enterprise Software vs SaaS: What is Better for Business

Each step in business requires a thorough analysis and understanding of outcomes and benefits. When it comes to deciding on the type of software to use for your business processes, there are two options – SaaS (software as a service) and custom enterprise software. Both of them have their advantages and drawbacks. So which one to choose to get the best outcome?

Let’s take a close look at core difference between enterprise software and SaaS, pros, cons, and reasons to choose one solution or another.

What is SaaS

SaaS or software as a service is one of the cloud-based services when subscribers are provided with out-of-the-box application software fully serviced by a provider. Such a type of solution is also called software on demand.

SaaS providers independently manage the application, providing customers with access to certain functionality on a subscription basis. In a nutshell, the business using the SaaS solution does not control or own the infrastructure needed to host the service and just pays money to use it.

The SaaS nowadays offers a wide range of functionality: from CRM to accounting systems. As a rule, the functionality provided by SaaS solutions is built according to the common practice of business process organizing. So typically, you have a choice between several packages of predefined functionality at a different price.

Custom Enterprise Software

Custom software is a solution built from scratch and according to the specifics of a particular business. It includes the very functionality the company and stakeholders need. Custom enterprise software solutions are often developed by software vendors specializing in Java, PHP, and other enterprise-oriented technologies.

The most in demand enterprise software solutions:

• Supply chain management: the software solutions automating the whole process of goods flow management (procurement, product lifecycle, planning, logistics, order management). 
• Human resource management: software system that helps to tune and automate human resource management and tie it with other vital enterprise processes. Such software allows to optimize recruitment, onboarding & offboarding, corporate learning, time tracking, payroll and more. 
• Customer relationship management: CRM systems that help to optimize business-to-client communication, accumulate the information about company’s clients, track touch points, and accumulate expertise of the company. 
• Accounting software: this type of enterprise software records and manages day-to-day financial operations, transactions, expenses, etc. It also usually includes revenue management, payroll management, subledger accounting, and reporting. 
• ERP software: enterprise resource planning software usually covers the whole range of every-day  business processes such as accounting, supply chain management, procurements, human resources, and more. Gathering all the data needed from different sources, ERP systems help organizations provide operationl integrity.

The main advantage of a custom software solution is that it’s fully customizable: from the uniques features to it’s scalability.

The process of custom enterprise software development usually involves the following steps:

1. Discovery phase: at this stage the company’s stakeholders share their business needs and challenges. Presale consultants together with business analysts gather vital information, discuss possible solutions to be developed and provide an approximate estimation of the project scope. 
2. Requirements & Analysis: business analysts together with project managers systemize and document business and functional requirements to the software, create the software development action plan, communicate the requrements to the dev team assembled for project implementation,  perform budgeting and prioritization. 
3. Prototyping & Design: at this stage UX/UI designers translate all the requirements into connected prototypes/wireframes, using user-centric approach. The design team can also create several scaled-down versions of the product or specific features to wrap it up into a final concept. 
4. Software development: after the design is ready and approved, the software developers start their work. 
5. Testing: to ensure the flawless work of the product, QA and testing team provides manual and automated testing to find bugs and imperfections, and hand over the onformation to the software engineers for bug fixing. 
6. Deployment: after your custom enterprise software is ready – it works smoothly and has all the features required – DevOps engineers together with the dev team prepare your system for production. Depending on how complex the project is, this can be a single-step release or it can consist of several stages.

If the project uses Agile principles, then the whole dev process is devided into iterations and each of them includes requirements & analysis, design, development, testing, and deployment stages. Thus, your software is developed gradually with further improvements at each iteration.

Being a bespoke software provider, IntexSoft also offers maintenance&support of the systems developed for our clients. We provide improvements to the system, add new modules or functionalities to upgrade its performance, and make it perfect for end-users.

SaaS vs. Custom Enterprise Software: pros and cons

The core difference between software-as-a-service and custom software is that the former is more a uniform commodity, while the latter is a unique solution. Let’s take a look at these solutions in the context of aspects crucial for any business.

1. Speed of Implementation & Initial Setup

SaaS

• Almost does not require time to deploy, but requires the time to find the best-fit solution
• Rapid user training and integration in company processes

Custom enterprise software

• The implementation takes six months and more, depending on the scope
• Usually takes time to train the users and adopt the solution in a company

2. Customization and Improvements

SaaS

• Have multiple features already tested, but may have features not meeting your requirements
• Regular updates, but, again, new features may not meet your objectives
• May lack several features specifically important for your business
• As a rule, there is a trial period to test everything

Custom enterprise software

• Fully customizable: you define the features
• You also define all the updates and new features to be developed

3. Integration with third-party services

SaaS

• APIs allows integrating with a wide (and set) range of third-party software
• May arise problems with integrating with your current software if SaaS does not offer the needed APIs

Custom enterprise software

• Since developed according to the company requirements, it’s built to integrate with any software you need
• At the very start of the project, you define what services, solutions, or your current software it should be integrated with

4. Costs

SaaS

• Paid by subscription, which helps to plan your budget
• No additional cost as new features are released

Custom enterprise software

• Paid for the work done (the cost differs depending on the scale and specifics of the project)
• The cost is higher as the development is time- and resource-consuming
• Maintenance costs may be low if no new features or changes are required

5. Security

SaaS

• The software provider defines security terms
• You have to register and transmit certain information to use the software

Custom enterprise software

• You define the security terms you need
• No need to transmit the data to the third-party services

How to choose suitable enterprise software

Both SaaS and custom enterprise apps can be a good option, but you should consider your goals, business specifics and possibilities. Moreover, business applications are not about software but business processes and the people involved.

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So what to choose?

1. When to choose SaaS

• Small or mid-size business
• The business processes are not complex or even undefined
• You have no internal IT team or any employees with IT skills
• The IT infrastructure is small, or there is no any at all
• Your company has a stable business model which requires a few changes
• You have no budgets to spend on complex software
• Your business does not require highly-specific software

2. When to choose a custom solution

• Enterprises and sector-specific businesses usually rely on custom software development
• Your company has complex and well-established business processes
• You have an in-house IT team or employees with a strong IT background
• You have a well-established IT infrastructure which requires upgrades
• Your company’s business model is continually changing
• You have enough time, money, and resources to develop a custom software
• Your business requires a unique solution

Summarizing

When you choose between a custom or ready-made cloud solution for your business, there are two main factors to consider: the specifics of processes in your company and the budget.

Custom software is all about high customization and adaptation to all the tiny details of business. That’s why the development of such a solution needs time and money.

SaaS is, as a rule, a quick and affordable solution for companies whose processes do not require unique software solutions.

If you need a unique or customizable enterprise software and don’t know where and how to start, you’re welcome to contact us and get a free consultation!