Contributed Article by Matthew Grove, Director, Business Development, GK Horizons
Software purchasing decisions have traditionally been made from the top down. Today, the advent of cloud and SaaS applications has challenged this tradition for several reasons.
Large companies with multiple divisions and regions, each with their own P&L manager and finance function have traditionally relied on the head office to make software procurement decisions for their planning software. Once the software has been purchased by head office, the divisions and regions wait their turn to be ‘switched on’ and are then cross charged for the project costs and the ongoing cost of ownership.
This model works well for the large and expensive on-premise applications. The high cost of ownership and implementation forces companies to implement the software into each division or region in order to build the business case benefits. Otherwise the purchase would never get approved. However, the software purchasing landscape has changed with the advent of new technologies and concepts – Cloud and SaaS.
Cloud and SaaS-based licensed applications empower divisional or regional managers to make their own purchasing decisions in two ways.
No Approval needed
Firstly, there is no need to seek approval for a large capital outlay, as most of the cost is an operational expense. Operational expenses are often within the managers’ approval limit, therefore avoiding the burden of justification to head office.
2. Inclusive, Intuitive Purchasing Process
Secondly, the absence of hardware and technical support skills reduces the need for technical expertise in order to get involved in the purchasing process. Managers do not need to refer to IT for technical hardware specifications or to provide specialist IT resources to support the hardware of the application.
This freedom to purchase software independently eases the strain on the relationship between the head office, and divisions/regions. No longer are remote corporate locations reliant upon expensive support provided by the head office. No longer do division managers have to wait for head office purchasing decisions that can take years to make, followed by an even longer waiting period before rollout. No longer do the divisions need to pay for a service that was forced upon them.
As an Adaptive Planning partner based in Australia, we have encountered many situations that fit into this scenario. There are many global organisations with local operations in our region that need the flexibility to make their own software purchasing decisions without relying on centralized, cumbersome, and prohibitive IT and procurement processes. Business Budgeting and forecasting software from Adaptive Planning is an excellent candidate to streamline such an otherwise tedious, cumbersome, and complex purchasing scenario.
GK Horizons provide agile and affordable budgeting & forecasting, financial consolidation and business intelligence solutions for mid size companies to large enterprise, across a variety of industry types. Follow Matthew Grove and GK Horizons on Twitter for more cloud technology information and updates.