Why Your CFO Loves SaaS
posted by Anna Mar, October 16, 2011Your CFO likes SaaS because it reduces up front costs, makes IT ROI more predictable and has tax benefits.
Year One Costs
Have you ever noticed that your CFO is only interested in your project's year one costs and metrics?That's because your CFO still has the flexibility to reduce costs or adjust targets for year two and beyond. The current year is different: targets are already set, spending is already committed and promises have been made.
SaaS applications can reduce year one costs by 50% to 75% (as compared to an in house deployment).
The Reliability of IT ROI
IT ROI predictions are not very reliable.SaaS effectively outsources the operation of your applications — making your costs more predictable.
Tax Benefits
SaaS shifts costs from capital expenditures (CAPEX) to operational expenditures (OPEX).CAPEX is a cost which cannot be deducted in the year in which it is paid. If you pay $1 million dollars for software licenses you have to spread this cost over many years for tax purposes.
OPEX can be deducted as a cost immediately. If you pay $1 million dollars in SaaS fees they can be deducted as a cost in the current year. This makes your CFO happy.
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