How SaaS is Changing the Landscape for the CFO
CFO’s are taking a closer look at SaaS because of its higher return on investment, greater efficiencies and optimization of IT resources.
The SaaS business model is also beginning to change the landscape for financial professionals. CFO’s are taking a closer look at SaaS because of its higher return on investment, greater efficiencies and optimization of IT resources. Software vendors for financial applications such as Oracle are responding to this demand by offering an increasing number of SaaS solutions.
The growth of SaaS comes at the same time many finance departments are shifting their focus from transaction processing to analytics and business leadership. That shift is driven by the need for better information, faster decision making, and a deeper understanding of costs across the company.
By delivering application functionality as a web-based service, SaaS is also bridging the gap between finance and IT, enabling CFO’s to access the functionality required to meet their goals while keeping in line with corporate IT strategy.
The economic benefit of the SaaS model is the most compelling reason CFO’s are shifting from on-premise to cloud computing. SaaS vendors typically charge monthly subscription fees instead of a large upfront perpetual license fee and ongoing maintenance charges. This allows SaaS providers to deliver the benefits of traditional on-premise financial software without the cost and complexity.
1) Lower TCO: SaaS eliminates the need for companies to buy, deploy and maintain IT infrastructure and processes. Infrastructure and management fees associated with the SaaS model are built into subscription fees. In the on-premise model, IT infrastructure costs account for a large percentage of the total cost and represent the biggest difference between the TCO of SaaS and on-premise models. The SaaS model also allows companies to focus technology budgets on competitive advantage rather than infrastructure.
2) Rapid innovation: SaaS solutions are function or business process specific, ensuring that the software used by finance departments contains market-leading finance functionality, not just features that are add-ons to a general ledger. Many vendors offer upgrades on a quarterly or bi-annual basis, allowing them to be more responsive to customer and market demands. In most cases, the upgrades are part of a base subscription.
3) Flexible pricing: Most SaaS providers use a pay-as-you-go, subscription-
4) Rapid deployment: The typical enterprise software installation involves lengthy rollouts of 18 to 24-months, cost millions of dollars in hardware and require hours of IT resources to deploy and maintain onsite. With no costly software or hardware to deploy or maintain, SaaS minimizes demands and impact on IT, allowing finance directors to make technology decisions that support the business.
5) Cost Containment:
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Page Updated Last on: Jul 23, 2012