The SaaS Cloud Debate for PeopleSoft Users.

For PeopleSoft on-premise users (and the few that are on cloud as an infrastructure), the question of whether to transition to a SaaS cloud setup can feel like standing at a crossroads. IaaS (Infrastructure as a service) provides on-demand computing resources over the internet, while SaaS (Software as a Service) is a model that lets users access software that’s hosted and maintained by the primary software vendor.

On one side, you have the familiar comfort and control of an on-premise setup, while on the other, the promise of cloud-based innovation and flexibility beckons. But which one is the right choice? Should you move to SaaS, or is it better to stick with what you know? Let’s explore both sides of this debate to understand what works best for your business.

Stability and Control That Comes from Staying with PeopleSoft (On-Prem or Cloud Infrastructure)

For many companies, especially long-time PeopleSoft users, remaining on-premise has significant benefits that cannot be easily overlooked. These systems have been built and customized over the years, even decades, to perfectly align with unique business processes. In such cases, switching to a SaaS cloud model might seem risky.

You would have to retrain your staff, reconfigure processes, and face potential downtime, all of which could seriously affect your operational efficiency. It’s important to note that if you’re running PeopleSoft on cloud infrastructure, you already have the advantages of improved availability and reliability, enhanced security, and not needing hardware upgrades.

Let’s look at some more reasons why staying on-premise could be the better choice:

Customization:

  • One of the major benefits of on-premise PeopleSoft environments is their extensive customization capabilities for maintaining competitive advantage or meeting statutory needs. Over time, businesses have tailored their systems to fit very specific operational needs. For organizations that have invested heavily in PeopleSoft, the value of these customizations cannot be overlooked.
  • Healthcare providers, for example, may have built tools to manage supply chains, such as integrations with major healthcare vendors like McKesson and Cardinal, allowing them to seamlessly switch between suppliers due to revised negotiations or amended contracts. Extensive integrations with clinical systems and custom-built processes, some of which have taken nearly two decades to perfect, could make switching to SaaS disruptive for a few years.

Support for Legacy Systems:

  • Many businesses, particularly in sectors like finance, government and healthcare, rely on legacy systems that have been part of their infrastructure for years, if not decades. For companies in these industries, atransition to a SaaS cloud setup could be time consuming and cumbersome.
  • This is especially relevant in healthcare, where extensive integrations with critical legacy systems, like Surgery, Endoscopy, and Cardiology systems, would need to be rebuilt from scratch in a cloud-based SaaS application. Healthcare providers often rely on these custom-built integrations, such as purchase order and shipping notice systems tied to major vendors, to maintain a competitive advantage in supply chain management.
  • Moving these complex, industry-specific customizations to the cloud would not only be costly but could also lead to operational and integration inefficiencies.

Lower Costs:

  • While cloud migration offers several advantages, it also comes with a hefty price tag. But with the latest PeopleSoft PUM upgrades you can get AI-driven features that help businesses streamline tasks, similar to what cloud platforms offer.
  • Estimates show that the initial cost of migration can be upwards of US $10 million, with ongoing fixed-fee maintenance costs tied to licensing fees to the primary software vendor. Large providers such as Oracle, Microsoft, and SAP may charge as high as 22% of the initial license fee as a yearly maintenance fee to receive patches and updates. In fact, if you have a good system integrator working with you, the cost of bringing in new functionality that is otherwise offered by cloud could even be cheaper than the 22% of the revised license fee.
  • For industries that have heavily invested in their on-premise infrastructure, these costs (on top of the potential loss of custom-built integrations) can make SaaS migration financially unfeasible.

Oracle’s Extended Support:

  • Oracle has announced to its customers that it is committed to supporting PeopleSoft on-premise clients for the next 10 years. Their ‘follow-the-sun’ support model ensures global coverage, and with tools like ElasticSearch, they continue to improve search functionality and performance. This extended support provides companies with the confidence to stay on-prem without fearing that their system will be outdated or unsupported for statutory needs.

Data Control and Compliance:

  • Industries like healthcare, finance, and government often face strict regulatory requirements for data administration. Managing data in-house through an on-premise solution provides more direct control over data security, better privacy, and statutory compliance. For businesses in these sectors, trusting a third-party SaaS provider with sensitive data might not align with their compliance requirements, making on-prem solutions more appealing.

Moving to SaaS Cloud: The Case for Innovation and Flexibility

While staying on-prem has its advantages, moving to a cloud-based SaaS model can offer unparalleled innovation and flexibility which are especially crucial in today’s fast-paced digital landscape. It can offer major benefits for businesses that are looking to scale, streamline operations, and adopt cutting-edge technologies.

Let’s explore some of the benefits that a SaaS cloud migration can offer for your business:

Seamless Integration and Flexibility:

  • SaaS platforms, such as Oracle Cloud, deliver seamless integration across various business functions, making it easier to unify workflows and data. Instead of operating in silos, cloud ERP systems enable all departments (finance, HR, supply chain, and more) to access shared data and processes in real-time.
  • This level of integration improves operational efficiency and enhances collaboration across the organization. For businesses needing to pivot quickly in response to market changes, cloud systems provide the agility to reconfigure workflows without the complexities associated with customized on-prem solutions.

Built-in AI and analytics tools:

  • Cloud platforms often come equipped with built-in AI and analytics tools, which can automatically process large amounts of data, identify trends, and recommend actions that can transform your decision-making from reactive to proactive. These tools allow businesses to gain in-depth insights into customer behavior, operational efficiency, and market dynamics, allowing for more informed strategic planning.
  • By seamlessly integrating AI with existing systems, workflow automation is enhanced, reducing manual labor and freeing up valuable resources for more strategic initiatives.

Collaborative Ecosystem:

  • For businesses with global supply chains or multiple vendors, a SaaS cloud model offers greater visibility into supplier performance and capacity. Cloud-based systems allow for better collaboration with partners and vendors worldwide, ensuring that businesses can maintain strong relationships and respond quickly to changes in the supply chain.
  • As your business grows, a cloud system can effortlessly scale up to accommodate additional users, data, and resources. Conversely, if your needs decrease, the system can scale down, ensuring you’re only paying for what you use. This is especially valuable for industries with seasonal demand fluctuations or periods of rapid expansion.

Built-In Security and Compliance:

  • While data security is often cited as a concern with SaaS cloud migration, leading SaaS providers invest heavily in advanced security protocols. Many cloud platforms offer encryption, multi-factor authentication, and regular security audits to safeguard sensitive data.
  • SaaS providers often have industry-specific compliance certification needs for infrastructure security to ensure that businesses in heavily regulated sectors can meet strict regulatory requirements.

Which Path Is the Right Choice?

The decision to move to a SaaS cloud or stay with PeopleSoft is heavily dependent on your business area and how you want to administer your data. For businesses that have invested heavily in their existing infrastructure, rely on legacy systems, or operate in highly regulated industries, staying on-prem or adopting a hybrid model might be the most practical choice. The customization, cost control, and direct management of infrastructure that on-premise solutions provide can offer stability and a sense of control.

On the other hand, for companies looking to innovate, scale quickly, and benefit from real-time data access and collaboration, the cloud presents a compelling option. With cloud-based SaaS, businesses can stay competitive, adapt to market changes faster, and access cutting-edge tools like AI and machine learning.

If You Choose PeopleSoft, Should You Stay On-Prem or Move to a Cloud Infrastructure?

Now if you choose to stay with PeopleSoft, the next question is whether to stay on-premise or move to a cloud-based infrastructure like AWS, OCI, Azure, etc. The difference between Infrastructure as a Service (IaaS) and Software as a Service (SaaS) is significant in terms of functionality, management, and user experience. Understanding these differences is extremely important when selecting the right cloud model for your organization’s ERP needs.

Cloud as Infrastructure (IaaS):

  • IaaS provides virtualized resources like servers, storage, and networking, giving businesses control over their IT environments, including operating systems and applications. This flexibility allows for extensive customization, making IaaS ideal for businesses needing to build or modify applications or create specialized development environments.
  • However, users must manage updates, security, and scalability, which adds complexity. Common examples of IaaS providers include Amazon Web Services (AWS), Microsoft Azure, Oracle Cloud Infrastructure (OCI), and Google Cloud Platform (GCP).
  • Here are some of the major benefits of opting for IaaS:
    • Disaster Recovery: IaaS platforms typically include advanced disaster recovery solutions, ensuring that backups, geographical redundancy, and recovery tools are readily available. This minimizes the risk of prolonged downtime in the event of a failure or cyberattack.
    • Cost Flexibility: One of the key benefits of IaaS is its cost flexibility. With the pay-as-you-go model, organizations can scale resources up during high-demand periods and scale down when less is required, optimizing costs based on real-time needs.
    • Compliance Control: IaaS is especially beneficial for industries with strict regulatory demands, like healthcare and finance. Companies can configure their infrastructure to meet compliance standards, ensuring data sovereignty and meeting regulations for data handling and storage.
    • Security Risks: Poor maintenance of on-premise systems on IaaS can lead to vulnerabilities and potential security breaches. Recent incidents illustrate this risk:
      • January 2024: A cyberattack on Lurie Children’s Hospital compromised sensitive patient data.
      • April 2024: UnitedHealth faced a $872 million breach.
      • May 2024: Ticketmaster experienced a breach that exposed 560 million customer records.
  • These examples highlight the growing risks businesses encounter when managing their own infrastructure without the comprehensive protections of cloud providers.

SaaS Cloud ERPs:

  • In contrast, SaaS delivers ERP applications over the internet, offering enterprise resource planning functionalities without requiring businesses to manage the underlying infrastructure. SaaS ERP solutions, such as Salesforce, NetSuite, Oracle Fusion, and Workday, are typically pre-configured and ready to use, which means they require minimal setup and maintenance.
  • Users typically have limited control over the underlying infrastructure as customization is often restricted to options within the framework offered by the provider. However, the primary advantage is that the service provider manages all updates, maintenance, and security, reducing the burden on internal IT teams. SaaS is ideal for companies seeking an out-of-the-box system for managing finance, HR, and operations without extensive IT requirements.
  • Some of the main benefits of choosing the SaaS path are:
    • Quick Deployment: SaaS solutions are ready for use immediately after subscribing, allowing for fast implementation. Since these systems are designed to be user-friendly, minimal training is required, enabling businesses to quickly leverage the platform’s capabilities.
    • Low Maintenance: One of the biggest advantages is that all updates, maintenance, and security are handled by the service provider. Businesses benefit from automatic updates, ensuring they are always using the latest version with the most secure features.
    • Cost-Effectiveness: It typically operates on a subscription-based model, which means predictable monthly or yearly costs. This lowers the capital expenses tied to buying and maintaining hardware and software, offering a cost-efficient solution for many businesses.
    • Security Advantages: Because SaaS providers manage security at the infrastructure and application levels, they can often prevent breaches more effectively than on-premise setups. For example, cloud providers like AWS, Oracle, and Azure invest heavily in advanced security protocols, continuous monitoring, and threat detection.
  • The choice between IaaS and SaaS depends on your organization’s needs. IaaS is ideal for companies that require extensive customization and control over their IT infrastructure and are prepared to manage the associated complexities and costs, including increased security responsibilities.
  • On the other hand, SaaS ERP solutions are perfect for businesses seeking quick, cost-effective options with minimal management requirements, particularly those prioritizing ease of use, security, and fast implementation.
  • In the end, whether you decide to ‘stay’ or ‘go’ depends on your business needs, goals, and appetite for change. Both paths offer unique benefits, and finding the right balance is key. If you need more help evaluating your options or are ready to take the next step, Quartiz is here to guide you and implement the right solution for your business. Get in touch with our experts today!