Cloud technology considerations should not be restricted to your organization’s IT professionals any longer. Business owners must take an active role in understanding the technology and its potential impact. Deliberations on adoption of an in-house system deployment versus cloud-managed systems center on initial implementation and ongoing maintenance. Additional points to weigh include resource support and the value of your investment.
Initial implementation costs for in-house systems can amount to hundreds of thousands of dollars, with up to 60% of the total cost attributed to project management. In many cases, large project management bills are necessary to cover a vendor’s overhead costs. Significant upfront spending is restrictive to small- and mid-sized companies, and providing an ROI justification can be difficult.
Typically, an in-house installation includes an 18-20% annual maintenance charge based on the initial purchase price. This agreement includes support for patches and fixes. However, major upgrades and version changes will likely require new software purchases and implementation costs to support those software purchases. Early in your product lifecycle, such investments have the potential to divert resources from other areas.
Upon deployment, on-site expertise is needed to manage the server, patches, upgrades and routine hardware and software maintenance. Here you have two options: 1.) Assign the additional responsibilities to a current IT resource; 2.) Justification for adding a full-time employee or contract consultant to the payroll. Resource costs for whichever you select must be factored into the full investment amount.
How does a business owner best manage these software decisions?
Once the decision to acquire a new software solution is made, you want to target the most logical solution and a provider with the ability to meet your requirements. You should also have a clear understanding of the available delivery options. Business owners with budget responsibilities need to understand the total cost of on-site deployment and benefits associated with cloud adoption.
A cloud-based solution can notably lower initial implementation fees, lessen the need for on-site IT support and provide your organization the true value of a software solution without the overhead costs.
Ask your current software vendor which options are available in the cloud, and when doing research, always ask if a provider can share a product roadmap of scheduled updates.