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Total cost of ownership – why more is sometimes better

Outdated systems hinder innovation and streamline processes, making it difficult to implement advanced modernizations like process automation. They prevent your organization from consolidating data analysis, making insight-driven decisions, effectively allocating resources for profits, and attracting and retaining the talent needed to meet rising client expectations.

Forward-looking professional services firms are embracing change and enhancing productivity through cloud ERP systems. This lets them eliminate low-value tasks, work more efficiently, reduce costs, and create opportunities for employees to focus on revenue-generating work and assisting clients in solving their business problems.

Despite the evident benefits of adopting cloud ERP systems (and the risks of not doing so), many organizations still express concerns about cost. Although SaaS solutions consistently outperform on-premises legacy systems in terms of user experience, flexibility, resilience, and adoption, the total cost of ownership (TCO) for a cloud solution may be higher than that of an on-premise system over its entire lifetime.

However, it's crucial to consider that SaaS ERP systems also improve performance and employee experience, making the TCO more than worthwhile. We advocate for a comprehensive evaluation of TCO for cloud ERP systems—one that fully accounts for the value generated by the solution and its ability to meet your organization's needs.

Traditional TCO calculations often overlook costs associated with software and hardware upgrades, the demands on your in-house IT resources for maintenance, customization, and support, managing business user support, and the impact of these requirements on overall organizational productivity. Many of these costs are eliminated by SaaS systems.

Click to read Leaving legacy behind to build business resilience (gated)

Uncertain times call for a more flexible approach and an adaptable mindset when building business cases

With industry-wide performance against several professional services KPIs declining over the past year, organizations are more cost-conscious than ever. Nevertheless, it's vital to align your operations with challenges such as attracting and retaining talent, maintaining profitability as client budgets shrink, and addressing rising project complexity.

To achieve success, equip your business with a robust yet adaptable foundation capable of accommodating significant changes swiftly while providing a stable and intuitive work environment for your employees. This entails utilizing a platform that enables adaptable, fluid workflows.

How experience drives value

User experience should be a core benefit of your ERP system, particularly for new SaaS ERP systems. ERP systems impact the workflows of nearly every aspect of an organization. But most users are not "power users," meaning that those who access the system for only a few tasks may remain unaware of its capacity for managing work and administration.

It's common for firms to discover during system audits that they have dedicated functionality for managing workflows currently being managed through spreadsheets and emails. But if users can't locate these features due to confusing or unintuitive UX, they might as well not exist.

Improved user experience results in better adoption and increased satisfaction, both of which enhance productivity and contribute to the overall benefit of your new system. When deployed effectively, a positive user experience can also attract and retain talent. Younger workers are less inclined to learn obsolete systems, and the long-term cost of not upgrading to meet their needs and priorities may far exceed the slight increase in operational expenses incurred by subscription costs.

Ready to learn more?

Replacing legacy systems seems daunting, but the cost of holding back on switching to the cloud is the damaging impact on people experience and, ultimately, profitability.

Discover more about how failing to replace your legacy systems can cost you more than simply investing in the tools you need in terms of risk exposure, operational inadequacies, and strategic inflexibility – check out this eBook: Leaving legacy behind now.

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Bryce Wolf

Bryce Wolf

Senior Manager, Industry Solutions

Bryce Wolf is a Senior Manager of Industry Solutions at Unit4 and is responsible for the delivery of Unit4’s product strategy for our strategic verticals. He is responsible for the delivery of Unit4’s PSO Industry Models and MESH, and works closely with Product Directors to ensure a complete end to end solution for Professional Services Organizations. Bryce has experience in consulting and product strategy at Oracle+NetSuite, JDA Software, FinancialForce, and management consulting firms prior to joining Unit4 in 2021.