Peerless Steel's Randy Remdenok deployed a hosted ERP program (from Plexus Systems, Inc.) at the steel distributor some five years ago, making the Michigan company something of an ERP pioneer. Remdenok says the rewards of the hosted approach have far outweighed any risks to the business. The proof? Peerless Steel has consistently achieved an annual ROI of at least 20 percent on its hosted ERP investment.
Most of Peerless Steel's returns have come from downsizing its IT department. That's hardly surprising: hosted software is basically a form of business-process outsourcing. "When you eliminate eight salaries," notes Remdenok, "the cost to operate [the software] is less than what we're paying for our existing staff."
On-demand apps are not only maintenance savers, they're also a heck of a lot easier to deploy than conventional software. An on-site or proprietary system must be carefully tested for server compatibility, performance, and other hardware-related issues. By contrast, deploying software as a service typically requires just a few weeks of prep work (mostly spent configuring the software, scrubbing data, and training users).
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