Understanding the Deployment Options for&

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Understanding the Deployment Options for your new Business Management System

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Introduction
Does this situation sound familiar? You started out with an off-the-shelf accounting software package,
but now your business has outgrown its usefulness. Or perhaps you purchased your accounting system
many years ago and have decided it is time to find out more about the newer solutions on the market.
Or, maybe, you’ve recently purchased a business management system, but it is not performing as
promised or the cost of maintaining it is too high and you feel it is time to cut your losses. Or you are
starting out a new business and want to assess your software solution options.

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When deciding to implement a new business management system, there are many factors that need
to be considered. Up until the beginning of this century, choice of deployment options–the how and
where of delivering a software solution–was NOT one of these considerations. You would purchase
software licenses, buy computers, and install and run the application in your office. With advances in
Web technologies and growth in broadband access to the Internet, alternative deployment methods
have emerged. Nowadays, most evaluations of software alternatives include the question of whether to
implement the solution “on-premise” or “on-demand.”
The purpose of this paper is to assist you in better understanding these deployment options and how
your choice in deployment can impact the overall success of your business management solution.

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On-premise and on-demand defined
On-premise solutions are software installed and run on hardware on the premises of the customer.
The customer is typically responsible for maintaining the technology infrastructure, and the software
licenses are paid for up front through licensing fees. The customer has a perpetual license to use the
software and is able to customize features and functionality within the software to suit the company’s
unique requirements. In addition, the customer has complete control over the infrastructure and the data.

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There are two common forms of on-demand software: software as a service (SaaS) and Hosted.
In a typical SaaS deployment, a vendor provides the application as a service that is licensed by multiple
customers. All aspects of infrastructure management and application delivery are handled by the service
provider. Delivery is typically over the public Internet. The customer typically does not maintain software
or hardware and pays for access to the application on a pay-for-use or subscription basis.

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Hosted software is similar to software as a service in that it is managed by the vendor (or by a third
party), accessed over the Internet, and paid for on a subscription basis, but the depth and breadth of the
application’s functionality is often more comparable to that of the on-premise model, in part due to the
only recent advances in technologies supporting SaaS and the relative newness of software publishers in
the SaaS arena.

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At the end of day, deployment is a “how” and a “where” rather than a “what,” and competing business
management solutions are separated by a broader range of considerations than just the choice between
on-demand and on-premise. Additionally, the relative advantage or disadvantage of one deployment type
over others is dependent on each company’s individual objectives and circumstances, which are likely to
change over time and vary according to a number of criteria. This paper, therefore, aims to provide a clear
understanding of the context of deployment within overall selection criteria and examines five
key considerations:
1. Improving business performance
2. Investment timeline and total cost of ownership
3. Data security and data access
4. Availability of internal IT resources
5. Vendor reputation and support ecosystem

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1. Improving business performance
First and foremost, you need a system that does what you expect it to do: automate key business
processes, solve important business issues, and minimize impact on operating procedures. The system
needs to provide you with functionality that meets your requirements, and it also must be flexible enough
to satisfy your unique business processes. In addition, the system may need to be accessible to your
distributed workforce and have capability to support mobile workers.

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Functionality
The functional breadth and depth of business management solutions varies significantly from vendor to
vendor. It is important to define your functional requirements clearly up front in order to identify the solution
that will provide you with the best fit over the lifetime of your installation. Although new technologies enabling
the delivery of software over the Internet have made great progress in recent years, some of the vendors
relying solely on these technologies–particularly those with SaaS offerings–have incomplete solutions.
Either they do not include key aspects of the solutions in their core offering–instead, charging extra for
them–or need to turn to third parties to provide this functionality. Worse, some vendors will promote product
capabilities, but once the cover is pulled back, the customer discovers severe limitations that negatively
impact the usefulness of the system.

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Solution maturity is also an important consideration. Generally, more mature solutions with a number of
major product releases behind them will provide broader and deeper functionality than those with a less
established history. As SaaS is a relatively new business model, companies only offering SaaS solutions
are less experienced and offer less functionality than their on-premise counterparts. Prefer an on-demand
model? It is important to note that the most functionally complete on-demand providers are those that have
leveraged their on-premise expertise to deliver their solutions in an on-demand environment–often as
Hosted solutions.