Is Purchasing Cloud Accounting Solutions an Example of Mass Hysteria?
Let me start off by saying that there is no single product, technology, licensing model or business process that is the exact right fit for every nonprofit organization. It is incumbent upon every organization evaluating their business systems to do proper due diligence and evaluate all of the appropriate factors that impact the potential success of their project.
I have recently encountered a few professionals in the marketplace that seem to think that anyone who would select a Software-as-a-Service (SaaS) solution is genuinely off their rocker.
“The numbers don’t add up when you look at it over 7 years.”
“Servers don’t cost that much.”
“There’s no way to justify the incremental cost over time.”
“Nonprofits can’t afford something that expensive every year.”
Yet the fact remains that thousands of organizations have made this nonsensical decision to implement SaaS cloud accounting solutions like Intacct instead of traditionally licensed on premises software. What could possibly be driving this mass hysteria? Is it market hype? Or are the CFOs making these decisions for their organization seeing something that isn’t readily apparent on the surface?
To be certain, many organizations across all industries are recognizing the fact that IT is expensive and non-core to their mission (in most cases). Investing in substantial capital, manpower and other carrying costs related to IT is an obvious problem in the aggregate, but sometimes difficult to split out for individual business systems.
As you look at your organization’s strategy for IT, business systems and accounting software specifically, it’s very important to carefully weigh not just the obvious nominal costs of software licenses, but all of the quantitative and qualitative factors that impact the potential success of your organization.
Key Quantitative Factors:
- Licensing/Subscription/Maintenance Costs
- Hardware Costs (servers, networking, etc.)
- Enabling technology costs (databases, remote access, SharePoint, etc.)
- IT support costs (allocated)
- Risk factors (Disaster recovery, IT staffing/turnover, upgrades)
Key Qualitative Factors:
- Feature fit – how well will the application meet your business needs today and in the future?
- Technology Roadmap – what technologies are used and will they continue to fit your organization long-term?
- Room to grow – Every organization evolves. Will the solution be able to adapt to your changing circumstances?
Before you dismiss cloud-based solutions as “too expensive” or “unaffordable”, let us help you put together an objective comparison of options that examines all of the credible quantitative and qualitative factors.