In the 1970s, Domino's Pizza introduced "on demand" pizza. The company guaranteed a hot pie at your door in 30-minutes or less, or it was free. Americans love a challenge, many people ordered just to see if the driver could cut through traffic within the allotted time (which is a whole other story). It's no surprise that Domino's made a big splash selling "so-so" pizza to stopwatch-holding customers.
Today, we see the same kind excitement about "on demand" purchase-to-pay providers. Some are quick to sell you on speed of delivery, rather than trying to understand what you really need. Like the underwhelming feeling Dominos customers got when they when they actually opened the box, some cloud customers find that faster is not always better.
For many companies, the cloud does make sense. It is a completely viable and proven solution that is a perfect fit for many organizations. Simple procurement processes with few business rules and even fewer integration points work best. But purchase-to-pay in the cloud is not for everyone. For other organizations, deploying their purchase-to-pay application in private hosted or on-premises environments makes much more sense.
The important thing to remember before you pick up the phone is that you need to take a closer look at what will satisfy both your short-term cravings and long-term needs. Below is a list of things to consider as you choose the deployment method for your purchase-to-pay system:
Size and type of budget – your software budget amount and type will affect how you finance the project. If your company would rather pay for software and keep their fixed operating cost low, a one-time capital expenditure that includes software licensing, hardware and network infrastructure costs makes more sense. However, if your organization prefers to fund projects through an operational budget, cloud delivery with monthly subscription fees is more logical.
Size and scope of deployment – In large rollouts, it's likely that a large IT team will be involved in the process. In general, these teams have the global infrastructure and rollout experience to implement an on-premises solution. Complexity also plays a key role: the more complex the organization's cost allocation and business rules, the higher the likelihood customizations will be required, which are almost always handled better with a private-hosted or on-premises deployment.
Integration requirements - How many internal systems will your purchase-to-pay system need to integrate with and how complex are they? It's important to remember that most cloud offerings are pre-configured and are not always able to integrate with a plethora of other internal systems. Private-hosted and on-premises solutions are best for complex integration requirements.
Security concerns - Data security is obviously a major concern when it comes to the cloud. Make sure to ask the vendor who is managing and monitoring the data at rest and during transport. Be sure to ask if processes to handle equipment, data and application are documented and verifiable.
Control and audit requirements - Does your company need to audit physical facilities and storage devices? Will you need to audit IT processes? All this tends to be more complicated in the cloud. Of course, auditing can be done in the cloud; you just need to set clear expectations of your company's requirements upfront.
Sophistication/bandwidth of internal IT operations - Does your IT department have the sophistication and bandwidth to host another application behind your firewall? For IT departments that are maxed out, many companies build private clouds to become efficient. Also, many IT departments desire -- or are required -- to host applications in-house, whereby the cloud is simply not an option.
And a final item to consider, what if needs change? Does your purchase-to-pay solution have the flexibility to move off (or onto) the cloud? You don't want to get stuck with a system that can't change and expand with you.
Interestingly enough, Domino's is now currently claiming a new focus on product quality. Touting fresh ingredients, improved service and better tasting pizza, Domino's is clearly moving away from its rapid-delivery past. We're wondering if today's purchase-to-pay cloud vendors will follow suit in the near future.
- Mark Schaffner, VP of Marketing, Verian Technologies