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 di!erences between SaaS- and On-Premise-ERP. The calculation scheme can compute relative cost di!erences between SaaS- and On-Premise, and thus better determine which ERP operating mode is more "nancially a!ordable in the particular case. The systemic di!erences 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 comparative total ERP cost was calculated by applying a total cost of ownership approach, which was modi"ed to sum up only all relative cost di!erences rather than all absolute costs. This relative total cost approach enables the reader to compare the relative cost di!erences for each operation mode and includes "nancing aspects; the "xed costs were discounted and interest rates (by debt and equity) were included to compensate for the investment di!erences between On-Premise- and SaaS-ERP. The classi"cation and calculation scheme is limited in that the research method is qualitative. A quanti"cation of the adoption factors determined by building strict relations between the systemic di!erences and the customer's characteristics, as well as standardization and weighting of the importance of the adoption factors is not the focus of this contribution and is left to other publications.