One myth about SaaS that still seems to continue to dominate public opinion is that it’s not really cost-effective. And it somehow looks to be true, as not all cost benefits are immediately obvious. Legions of people including users, industry experts, and analysts lauding SaaS as the next biggest thing and proclaiming that the myth is somehow doesn’t seem to help; if anything, it only seems to be a case of ‘too good to be true.’
In practice, SaaS can be much more cost-effective when compared to on-premise applications. It saves money not just due to its pricing (subscription vs. one-time lump sum) but also because there really is no need to support its purchase with any hardware, which was the case with on-premise applications. There is no need to procure and maintain servers as data hosting is under the purview of the vendor. Apart from that there will be further cost savings on maintenance, support, updates, etc…
Hard savings tell you only half the story though. SaaS can bring you other intangible savings in terms of reducing employee workload and increasing their productivity as well. It also improves process efficiency by removing unnecessary steps and implementing best practices, thereby making it lean.
Just consider the example of travel and expense management. Online travel and expense management software has the potential to save hundreds of thousands, even millions of dollars for the company in the long-run. Apart from hard cost savings, the system ensures mobility, scalability, and data portability. It also reduces approval cycle times and eliminates the need for paper reports and receipts. It can also help with reducing fraud, which translates to more green in the bottom line in the long run.