Should your organisation make the switch to Software as a service (SaaS)?

By Stuart Dickinson, CEO on
The decision to move to Software-as-a-Service (SaaS) is quickly becoming one of the most important considerations for businesses today. More organisations than ever are evaluating whether or not to buy on-premise software or subscribe to SaaS. While price can be a consideration in the decision, there are several other factors that organisations should consider when embarking on a software purchase decision.

SaaS is a method of software delivery where applications are hosted remotely by a vendor or service provider and are then made available to customers over a network. Although it’s a departure from the conventional method of purchasing software, SaaS can provide advantages in the business environment. The decision will depend an organisation’s existing IT investments and its short-to-medium term business objectives. 

SaaS can provide cost efficiencies as it reduces upfront capital expenditure on installation and makes l ongoing costs around maintenance and upgrades more predictable. Gartner estimates that the annual cost of owning and managing software applications can be up to four times the cost of the initial purchase. SaaS is particularly attractive for SMEs as it provides access to functionally rich software that can be added to incrementally, and the subscription based method reduces the financial risk of large, one-off deployments.

The other saving from SaaS implementation is time. On-premise software implementation can take upwards of 12 months and can often be delayed as circumstances, priorities and budgets change. Depending on the complexity of the solution, SaaS deployments typically only take a few months and can sometimes be live in a matter of weeks.

Implementation of SaaS can be as simple as logging in to the software over the internet. Maintenance hours are also cut down as these responsibilities are transferred from your IT department to the vendor. SaaS apps are generally more user friendly in design which helps adoption across your organisation’s employees.

The subscription-based model of SaaS offers flexibility to organisations. Changing the level of usage is simple, allowing business units to scale their subscription as their needs change. Web-based use also allows users to access the software from any location they choose, as long as they have access to the internet.

The greatest benefit of SaaS is the continuous innovation it enables for your organisation. Traditional software implementations require regular updating, whereas, by design, SaaS is always on the most recent version, allowing your business units to access new features as soon as they become available. This means your software subscription actually appreciates over time, providing your organisation with maximum value and ROI.

It’s important to thoroughly research SaaS options on an individual basis before implementing solutions. With a growing number of vendors and providers in the market place, it’s also essential to ensure you get the best available advice before you move any of your enterprise software to an SaaS model such as SAP’s S/4 HANA Cloud Edition. While the benefits outlined above are indeed attractive, great care still needs to be taken to ensure these benefits aren’t outweighed by other considerations particular to your IT environment or business objectives.

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