3 things you should know when considering cloud-based AP automation

Thinking about moving accounts payable automation to the cloud? In the past, finance has been slower than other back office departments to consider moving applications to the cloud. But, cloud adoption is picking up in finance.Head in the clouds According to Gartner forecasts, spending on public cloud SaaS will increase over the next four years to account for around 47% of total spend on financial management applications.1

Organizations moving to the cloud often cite the lower initial investment, the ease of always having the latest and greatest software, and not having to maintain and support the applications as benefits over on-premises solutions.

If your head is in the cloud when it comes to your next AP automation project, here are a few considerations that may bring you back to earth:

  1. There’s a difference between hosted and true cloud-based SaaS – and it matters.

Confusing messaging around the cloud has led many to think Software as a Service (SaaS) and cloud-hosted are the same. The difference is SaaS is a true cloud-based business model in which a company pays to use a service owned by a SaaS provider and delivered in the cloud, while hosted solutions are hosted by a third party data center and are still owned and managed by the on-premises IT team. You can think about it like this: SaaS-based AP solutions run in a cloud environment.

Most SaaS solutions are multi-tenant, meaning many companies are operating off of the same application but are isolated from each other. This allows the software provider to quickly offer updates to all customers at once, unlike hosted solutions that are updated one customer at a time. It’s also important to recognize the difference between hosted in the cloud and true cloud-based solutions, because hosted solutions are still owned and managed by the on-premises IT team.multi-tenant, meaning many companies are operating off of the same application but are isolated from each other. This allows the software provider to quickly offer updates to all customers at once, unlike hosted solutions that are updated one customer at a time. It’s also important to recognize the difference between hosted in the cloud and true cloud-based solutions, because hosted solutions are still owned and managed by the on-premises IT team.

  1. Start thinking configurable instead of customizable.

While SaaS solutions have come a long way to offer functionality comparable to on-premises solutions, they aren’t as customizable. They do offer various configurations to meet your needs, but for organizations moving from highly-customized AP solutions it may be a difficult transition.

  1. This could open a whole new world of solutions for you.

For small or medium-sized organizations, cloud-based solutions are faster and easier to implement than on-premises solutions. This means that they are more accessible for companies with limited IT resources and/or technical knowledge. While they may not be less expensive in the long run, cloud-based solutions have lower start-up costs and are easier to budget for which can also make them a more appealing option.small or medium-sized organizations, cloud-based solutions are faster and easier to implement than on-premises solutions. This means that they are more accessible for companies with limited IT resources and/or technical knowledge. While they may not be less expensive in the long run, cloud-based solutions have lower start-up costs and are easier to budget for which can also make them a more appealing option.

There are many advantages to both cloud-based solutions and on-premises software. It’s important to remember that successful deployment of the AP automation solution you choose will depend not on the lowest cost option, but on the applications and services that meet your needs running where they are most efficient.

Is cloud-based invoice processing right for you? Check out our pros and cons white paper to read up on more business reasons for and against cloud-based invoice processing.white paper to read up on more business reasons for and against cloud-based invoice processing.

1 Finance Moving to the Cloud: The Steps to Take and the Benefits You Can Expect, 2016 (Gartner)

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