Committing to the ERP Cloud Part 1: Cloud Accounting Costs

Cloud computing is taking over the world. It makes life easier, faster, more secure, and less expensive. Still, some people are uncomfortable with the new systems or simply don’t know enough about them to think about switching. In this 4-part blog series, I want to touch on a few points that may make you more comfortable in switching to a cloud ERP platform and a SaaS model. I wanted to start with the exorbitant amount of money you are most likely spending on your current on-prem solution and the difference in cloud accounting costs.

See, you never really realize how much money you are spending when you do it repeatedly because you think you need to. At first glance, most on-premises solutions will appear cheaper. But look at what you spent on hardware upgrades and installs, costs that recur every few years. Now, look at what you pay for IT support for your system… some organizations need a fulltime employee, but even smaller organizations need to devote a non-trivial portion of IT time to the care and maintenance of their system. How much do you generally pay when there is an update that needs to be installed? It all adds up quickly.

Hard dollars are not the only thing affected and soft dollars are rarely considered. Your time is one of your most valuable resources. Time is money. When an on-prem system goes down it can be a nightmare. No one has access to the information and you must wait until IT can come out to get you up and running again. You are sitting ducks getting paid to do nothing. Well getting paid to do nothing sounds great to an employee, it isn’t so great for business.

Below is what we call the Iceberg Analogy. It does a pretty good job of explaining the cost distribution for an on-premise vs. cloud solution, namely Sage Intacct. Looking at the cost of the software alone is misleading, but non-accountants can fall into that trap. When you look at the total cost of ownership (TCO) then you’ll realize why there’s so much excitement about cloud-based ERP systems.

Seeing it broken down really shows how the number of upgrades, maintenance, and man hours drastically decreases saving you money along the way just by making the switch.

Feel free to download our Iceberg Analogy – On-Premise vs. Cloud Expense infographic and give us a call at 855-913-3228 or fill out our contact form if you have any questions or would like to chat. Next week I will post part 2 of the series so stay tuned and subscribe to the blog for updates!