Pick Your Flavor: On-Premise Expense Software or SaaS Based Expense Management

When it comes to T&E expenses for Microsoft Dynamics GP and NAV, the cloud, in combination with the current mobile revolution has turned out to be a very attractive and economical delivery model for online expense reporting with integration to these systems. Of course the gradually departing model of companies having to purchase licenses to own the software and have the ability to deploy it on their servers still exists but faces solid competition from nimble cloud solutions.

The Gorilla Expense T&E software is unique in that it can be enabled as SaaS or deployed on-premise, depending on the needs of the customer. Both options are provided as a complete turnkey package that includes software and the entire delivery mechanism.

One of the common topics of discussion is the pros and cons of on-premise vs SaaS when it comes to expense reporting and how best to assess the true costs. With SaaS, the customer pays less upfront while on-premise requires higher initial costs because the customer buys the software in terms of licenses and maintenance and owns it outright. However, lurking below this assessment is an important facet of the on-premise model – the concept of ‘Total Cost of Ownership’ a.k.a TCO. Let us explore this in more detail by segmenting the comparisons by company size relative to the customer base within Microsoft Dynamics.

Expense Reporting for Small Business

With small businesses, the initial cost of licensing the expense reporting software on-premise is usually several orders of magnitude higher than a SaaS expense solution. Plus the on-premise solution will require additional internal infrastructure and may incur personnel costs to maintain the solution.  So, for small businesses SaaS cloud based expense reporting may offer better ROI and quicker value than on-premise.

Mid-Market Expense Management

For mid-sized businesses, the comparison between the two approaches could be closer to break-even depending on the ‘IT-IQ’ of the company. Over a 2 to 3 year period, the relative costs between fixed license and recurring SaaS payments typically level out. The infrastructure costs usually average out over the same 2 to 3 years and may include a +/-10% variation. While operations in most businesses is only expected to increase, thereby placing a greater burden and costs on the infrastructure, the purchase price for such infrastructure (like servers) is also coming down rapidly. Microsoft Azure is a classic example of this – where, by employing the latest technologies, Microsoft has managed to lower the costs for the customer to own a server.

However, the big difference is labor costs – the standard assumption is that mid-sized business would have the cost of paying for 1/2^rd to 1/4^th of an IT team’s (consisting of anywhere from one to ten people) salary to maintain the servers, OS, the main application and ancillary softwares that support the solution. So these costs may mean that the on-premise deployment could potentially be more expensive.

When is SaaS Better?

The biggest benefit of going the SaaS route is when companies cannot dedicate IT resources and personnel to install and manage the applications. The general rule of thumb for on-premise is that upgrades are needed at least four times in a year and require several hours to install and manage up-time.

In addition, with SaaS, the expenses are deferred (read more about the classic CAPEX vs OPEX debate from CIO.com), so, from a cash flow standpoint, the model becomes attractive for cash strapped small businesses.

Conclusion

While we have reviewed the key piece of the equation which is related to cost, note that this is just one part of the puzzle. The other factors to consider when you compare SaaS vs on-premise expense reporting solutions are:

– Level of internal IT expertise and talent to manage on-premise solutions

– Comfort level with outsourcing the work, if not possible in house

– Tolerance for downtime and risk mitigation

–  Capability to support requirements from an evolving and growing business operations standpoint

– Level of engagement with the solution (SaaS gives you a ‘rent and forget’ approach whereas on-premise requires constant monitoring)

– Cash flow management

For our Microsoft Dynamics customers, Gorilla Expense provides both options and will work with the customer to closely understand which format will benefit their business and employees the most.

We advise and support our customer’s rapidly changing requirements when it comes to deployment options, since we have seen all the combinations and the respective challenges. If you would like to learn more or would like for us to review your requirements, please contact us at info@gorillaexpense.com

About Gorilla Expense

Gorilla Expense is a leading global provider of T&E Expense Management Software for Microsoft Dynamics ERP. Our Expense Reporting, Mobile Apps, Integration Services & Analytics solutions give customers the edge they need to compete in the global marketplace. With our powerful solution, we are constantly proving that – Expense management doesn’t have to be so difficult! Learn more at www.gorillaexpense.com

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