Why Software as a Service (SaaS) May Be The Best Transition Plan If You Will Be Implementing An On-Premise Application

Are you considering buying and implementing an on-premise application like an Enterprise or Corporate Performance Management solution (CPM)? Is your current budgeting and forecasting system good enough to carry you for an additional one to three years? Hope your answer to that question is “Yes” and you can live with your current system because you will be using it for some time before your new on-premise application is ready for use. Many companies are considering on-premise solutions for the right reasons… deep industry specific functionality, extensive solution customization, massive user base scalability etc. So why does SaaS make sense as a transition plan for a company about to buy an on-premise solution? Simply because the problems and deficiencies of a business’s existing application which drove them to make a replacement decision will still be around for at least another 12 to 24 months. There have been numerous stories that cite on-premise application implementations running way beyond 12 months. In a famous Meta Group study, the time to implement ERM applications ranged from 18 months to 26 months with an average time of 23 months. That’s two more years of living with your current application!

Using Corporate Performance Management (CPM) as an example, if the sales contract was completed today, it can take months to years to plan out the implementation, load the initial software and data, build the customizations, test the application, train the users and administrators and go live. A leading on-premise EPM solution actually requires weeks to load and test the initial software programs before any actual data loading or customization actually begins. A typical SaaS based on-demand application like CPM can be up, running and live within a few weeks. With a typical cost of $60-80 per month per user, the investment is small in comparison to the effectiveness gained by quickly moving your business to a more strategically aligned, comprehensive and less error prone solution for budgeting, forecasting, consolidation and/or scorecarding. This approach also has the benefit of reducing the risky tendency to accelerate and rush the on-premise implementation with disastrous results. With the typical on-premise application implementations running from hundreds of thousands of dollars to millions, a secondary investment amounting to a few thousand dollars per month into a temporary on-demand solution looks relatively small.

So even if your are committed to an on-premise CPM solution, say goodbye to that old budgeting and planning solution and enjoy the benefits of CPM much faster than you expected. Last time I looked, the next budget planning season is just a few short months away. Now how long did they say that on-premise application was going to take to implement?