Cloud / Saas Total Cost of Ownership Framework

Topics: Software as a service, Costs, Computer software Pages: 5 (1378 words) Published: June 29, 2013
Total Cost of Ownership When Considering a Move to SaaS

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Total Cost of Ownership When Considering a Move to SaaS
Evaluating the ROI of Software as a Service (SaaS) solutions vis-à-vis on-premise software can sometimes feel a bit like comparing apples to oranges. This CCH whitepaper provides an overview of the costs and cost savings associated with a migration to a SaaS model, including:    

Access Differences Hardware Costs Ongoing Maintenance, Security and Support IT Staffing Levels

delivery from the corporate client to the software host/provider, comparing list prices yields only a limited view. To fully appreciate the total cost of ownership when moving to a SaaS model, it’s important to account for both hard and soft costs. CCH developed this whitepaper to provide a framework in which to evaluate the costs and cost savings associated with a move to SaaS, with the goal of helping accounting firms make more fully-informed decisions.

A More Efficient Way to Access Software
One of the most obvious differences between SaaS solutions and on-premise software is in the way firms access the software. With traditional software, firms purchase a number of end-user software licenses, depending on how many people in the firm will be using the software in a given year. License fees are paid up front, but sometimes not all of the purchased licenses are used, due to staffing changes or software implementation delays. Often times, you pay an annual fee for a user, yet that user only uses the application during a discrete time of year, i.e. tax season.

In the last few years, Software as a Service (SaaS) has been steadily revolutionizing software delivery to corporate end-users across multiple industries, ranging from banking to Customer Relationship Management (CRM). The accounting profession is no exception. Today, more firms are evaluating the new robust SaaS tax and accounting solutions, and in the process, they’re comparing functionality, efficiency and overall cost with that of traditional onpremise software programs. At its most basic, SaaS is a new model for hosting and delivering ondemand software to a mobile workforce via the Internet. Since the SaaS model shifts many of the costs associated with solution 2

With SaaS, there are no annual individual license fees. Instead, pricing is often modeled as a lease that allows you to scale the number of users based on monthly usage. This model provides the flexibility to add or delete staff members as you scale to manage the annual workflow of your firm throughout the year. This seemingly minor shift transforms software from a fixed cost to a variable expense, providing firms with increased flexibility. Under the typical SaaS model, the more a firm uses the software, the more they pay the provider. The payas-you-go model enables firms to add new users when they come on board instead of using capital to purchase licenses in anticipation of future new hires.

Enhanced Security Included
One of the most immediate benefits of SaaS computing is that it creates an instant off-site back up, protecting firms against natural disasters and loss of data. Given the significant investment in security and back up, a trusted SaaS accounting solution provider often has more stringent security standards than even the largest of firms. Since the provider has incurred the cost of having true redundancy of servers, SaaS providers quickly become an important part of an organization’s data security and business continuity plans.

Reducing or Redeploying IT Resources
IT staff are an important part of any firm, but finding people with the right combination of skills is a continual challenge for most organizations. In addition, skilled IT staff can be expensive. Today, most IT staff spend the majority of their time managing systems and keeping software up and running. While some IT staff might have been initially threatened...
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