Systemic Differences between SaaS- and On-Premise-ERP
An Overview of a Qualitative Option Calculation Scheme
A research-based calculation scheme of IT options will be developed based on systemic differences between SaaS- and On-Premise-ERP. The calculation scheme can compute relative cost differences between SaaS- and On-Premise, and thus bet- ter determine which ERP operating mode is more financially affordable in the particular case. The systemic differences have been researched through a multiple case study with four ERP producers. The data obtained has been substantiated by ERP literature in general and SaaS literature in particular. The com- parative total ERP cost was calculated by applying a total cost of ownership approach, which was modified to sum up only all relative cost differences rather than all absolute costs. This relative total cost approach enables the reader to compare the relative cost differences for each operation mode and in- cludes financing aspects; the fixed costs were discounted and interest rates (by debt and equity) were included to compen- sate for the investment differences between On-Premise- and SaaS-ERP. The classification and calculation scheme is limited in that the research method is qualitative. A quantification of the adoption factors determined by building strict relations between the systemic differences and the customer's charac- teristics, as well as standardization and weighting of the im- portance of the adoption factors is not the focus of this contri- bution and is left to other publications.
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