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11 Tips To Determine The Total Cost Of Ownership For Cloud ERP

Posted by Samantha DeLaire

Dec 30, 2016

When appraising technology buys in your firm, Total Cost of Ownership (TCO) of an ERP/CRM software is a critical measurement of value. Most often, the technology vendor and buyer fixate on one thing – the acquisition price. This is mainly because of budgetary cycles that trend towards the short or near-term.

Business studies, going back years demonstrate that the cost of acquisition is the smallest part of the overall TCO.Truthfully, it is generally accepted that the cost of maintenance, upgrades, optimization, management, and training account for approximately 3-5 times the cost of the initial equipment acquisition over a five-year ownership period.

Because of this, it is mandatory that the small business owner look beyond the purchase and on-boarding expenditures, to ascertain the long-term view as to how much the technology actuallycost your organization.

Similarly, you must assess the TCO for a cloud/SaaS solution like SMB Suite’s Cloud subscription with the same evaluation as an ‘on-premise’ technology solution. The criteria should look something like this:
1. Cost per user, per month
2. Consulting / Implementation Fees
3. Training Costs
4. Ongoing User Support Costs
5. Upgrade Costs
6. Maintenance Costs
7. Extra Application Integration Costs (3rd Party Applications and Information)
8. Application/Environment Backup/Restoration/Recovery Costs
9. Ease and Cost of Adding New Functionality or Modules
10. Ease and Cost of Adding New Users to the Solution/System
11. Uptime Commitments and Cost of Business Downtime

SMB Suite views TCO as primarily the preferred method to analyze technology investments when two solutions provide roughly equivalent functionality over the solution lifecycle, but have different types of costs associated with acquisition, maintenance and operation. For these reasons, a TCO comparison offers a more tangible assessment of the total costs involved in deploying cloud-based SaaS and on-premise business solutions. 

Visit our website pricing page: www.smbsuite.com/pricing for more data on SMB Suite’s Cloud subscription TCO with Microsoft Dynamics GP and Dynamics 365 for Financials and Sales.