Calculating TCO for Cloud based Applications. Listen to the webinar replay here: http://get.coupa.com/tco-webcast.html?src=sh

1. Calcula&ng
TCO
for
Cloud-­‐based
Applica&ons
Evaluating Options and Total Cost
for Spend Optimization Automation
PayStream Advisors
August
22
2012
Henry
Ijams
PayStream
Advisors

2. Tony Wessels Henry Ijams
V.P. Marketing Managing Director
Coupa PayStream Advisors, Inc.

3. Twi8er
Hashtag
#TCOcloud

5. Coupa’s
Mission
Delivering software innovation that
breeds responsible spending while
impacting the company bottom line.

6. Coupa’s
Explosive
Growth
180%
Bookings
+95%
Renewal
Rate
150%
PlaMorm
Usage
YOY
YOY
YOY

7. One
World,
One
PlaMorm
10
Languages
40
Countries
100,000
Users

8. Customers
Highlights
Retail Finance Mfg. Health Care High Tech

9. PayStream
Advisors
Agenda
• Cost
efficiencies
from
the
cloud
• Four
Steps
to
determine
the
real
solu6on
cost
• TCO
Case
Study
“
PayStream’s
unbiased
approach
gave
“
us
renewed
con8idence
in
our
ability
to
foster
meaningful
change.
We
accomplished
more
in
4
weeks
than
we
had
in
the
prior
four
years.
-­‐
Myles
Kelly,
Partner
Edward
Jones
SecuriIes
9

10. About
PayStream
Advisors
PayStream
Advisors
is
a
provider
of
independent
research
and
automaIon
assessments
for
financial
automaIon
technology
to
PayStream
business
leaders
in
finance
and
Research
procurement.
Advisory
Services
PayStream’s
Annual
Procure
to
Pay
Summit
September
17-­‐19,
2012
CharloQe
NC
18
Workshops
3
Learning
Labs
3
Days
of
Networking
100%
fun!
1

11. What
Are
We
Talking
About?
• Even though Cloud Computing is not a new
term, some are confused about exactly what it is
and how to apply it.
• This session is focused on the cost benefits of
the cloud.

12. From
On-­‐Premise
to
Cloud
Plaborms
ApplicaIon
runs
ApplicaIon
runs
ApplicaIon
on-­‐premises
at
a
hoster
runs
using
cloud
services
Buy
my
own
hardware,
and
Co-­‐locaIon
manage
my
own
or
“cloud
fabric”
data
center
Managed
(elasIc,
servers
infini-­‐scale)

13. Deployment
OpIons
for
Procurement
Apps
On-­‐Premise
You
Manage:
Hosted
Cloud
You
Manage:
You
Manage:
Vendor
Manages:
ž ApplicaIon
ž ApplicaIon
ž ApplicaIon
ž RunIme
ž RunIme
ž RunIme
ž IntegraIon
ž IntegraIon
ž IntegraIon
ž Database
ž Database
ž Database
ž Server
Hardware/Sofware
ž Server
Hardware/
ž Storage
Vendor
Manages:
Sofware
ž Network
ž Storage
ž Server
Hardware/
Sofware
ž Network
ž Storage
ž Single
codelines
ž Network
ž MulIple
codelines
(separate
for
each
customer)

14. Cloud
Spend
Op&miza&on:
A
Smarter
Way
To
Spend
PayStream’s
research
findings
reveal
that
the
benefits
of
cloud
Spend
Op&miza&on
solu&ons
extend
well
beyond
the
cost
of
technology
acquisi&on,
including:
• Providing
lower
transacIon
processing
costs
/fast
cycle
Imes.
• Increasing
compliance
with
negoIated
contracts
and
purchasing
policies.
• Providing
greater
transparency
into
how
the
organizaIon
spends
money.
• Ability
to
consolidate
spend
across
the
organizaIon.
• Ability
to
view
spend
as
it
happens
and
compare
it
against
budgets.
• ConInuous
system
upgrades.

15. What
are
the
cost
drivers
for
Procurement
AutomaIon?
Cost
Driver
On-­‐Premise
Cloud
Sofware
1x
Licensing
Cost
Annual
SubscripIon
Hardware
&
Infrastructure
Servers
&
Databases
No
fees
ConfiguraIon/ImplementaIon
Professional
Services
Set-­‐up
fees
Data
MigraIon
Extensive
Minimal
User
Training
Required
Lower
Cost
–
Ease
of
Use
Annual
Maintenance
19
–
20%
of
Sofware
None
15

16. Sof
Costs
+
Gotchas
• Project
Management
– Costs
of
engaging
with
IT
&
Management
Approval
Process
– Takes
Ime
away
from
more
strategic
tasks
• The
cost
of
delaying
the
savings
– Most
projects
never
get
started
– Thus,
savings
are
delayed
or
never
begin
• Complex
Requirements
– Custom
forms,
custom
fields,
custom
business
rules,
mulIple
chart
of
accounts
and
integraIons
– Special
features
can
double
or
triple
the
cost
of
a
project

17. PayStream
Advisors
Agenda
• Cost
efficiencies
from
the
cloud
• Four
Steps
to
your
TCO
• TCO
Case
Study
17

18. Four
Steps
to
Calculate
Your
TCO
PayStream’s
TCO
model
makes
it
east
to
determine
which
solu&on
–
Cloud
vs.
On-­‐
Premise/Network
is
more
cost
effec&ve
for
your
company.
1. Func&onal
Evalua&on
and
Selec&on
Evaluate
the
features
and
funcIonality
of
compeIIve
products
2. Determine
your
Ini&al/Upfront
Cost
What
are
the
costs
elements
of
your
opIons?
3. Establish
Annual/Recurring
Costs
How
much
are
the
ongoing
costs
of
the
soluIon?
4. Enter
data
into
PayStream
TCO
Tool/Compare
the
Op&ons
Results
analysis
automaIcally
populated
based
on
your
actual
figures
18

19. One
Time
Costs
–
PayStream
TCO
Model
Cost Categories Cloud
Year 1
Traditional and Cloud
Year 2
Traditional Cloud
Year 3
Traditional
Network and and
Network Network
One Time Costs
Software & Hardware
Software License $137,500
Software Upgrades $15,000
Hardware & Infrastructure $35,000
Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Typical Configuration & Implementation:
Data migration $0 $75,000
Services Procurement $0 $60,000
Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000
Professional services $0 $175,000
Program management (vendor) $0 $150,000
Training $0 $90,000
Typical Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000
Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000
Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000
Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500
Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
19

20. One
Time
Costs
–
PayStream
TCO
Model
Cost Categories Cloud
Year 1
Traditional and Cloud
Year 2
Traditional Cloud
Year 3
Traditional
Network and and
Network Network
One Time Costs
Software & Hardware
Software License $137,500
Software Upgrades $15,000
Hardware & Infrastructure $35,000
Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Configuration & Implementation:
Data migration $0 $75,000
Services Procurement $0 $60,000
Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000
Professional services $0 $175,000
Program management (vendor) $0 $150,000
Training $0 $90,000
Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000
Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000
Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000
Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500
Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
20

21. One
Time
Costs
–
PayStream
TCO
Model
Cost Categories Cloud
Year 1
Traditional and Cloud
Year 2
Traditional Cloud
Year 3
Traditional
Network and and
Network Network
One Time Costs
Software & Hardware
Software License $137,500
Software Upgrades $15,000
Hardware & Infrastructure $35,000
Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Configuration & Implementation:
Data migration $0 $75,000
Services Procurement $0 $60,000
Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000
Professional services $0 $175,000
Program management (vendor) $0 $150,000
Training $0 $90,000
Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000
Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000
Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000
Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500
Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
21

22. One
Time
Costs
–
PayStream
TCO
Model
Cost Categories Cloud
Year 1
Traditional and Cloud
Year 2
Traditional Cloud
Year 3
Traditional
Network and and
Network Network
One Time Costs
Software & Hardware
Software License $137,500
Software Upgrades $15,000
Hardware & Infrastructure $35,000
Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Configuration & Implementation:
Data migration $0 $75,000
Services Procurement $0 $60,000
Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000
Professional services $0 $175,000
Program management (vendor) $0 $150,000
Training $0 $90,000
Typical Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000
Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000
Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000
Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500
Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
22

23. Annual
Costs
Cost Categories Cloud
Year 1
Traditional Cloud
Year 2
Traditional Cloud
Year 3
Traditional
and Network and and
Network Network
Annual Costs
Maintenance / Hosting / Subscription
Hardware / infrastructure maintenance $5,000 $5,000
Software maintenance $27,500 $27,500
Application Support $50,000 $50,000 $50,000
Procure to Pay subscription $650,000 $300,000 $650,000 $300,000 $650,000 $300,000
Req to PO subscription
Expense management subscription
Contracts module subscription $0 $50,000 $0 $50,000 $0 $50,000
Payables module subscription
Spend analysis subscription $0
Transaction fees $0 $400,000 $0 $400,000 $0 $400,000
Hosting fees
Maintenance / Hosting / Subscription $650,000 $800,000 $650,000 $832,500 $650,000 $832,500
Services & Fees:
Supplier enablement $0 $50,000 $0 $50,000 $0 $50,000
Supplier fees $0 $1,200,000 $2,000,000 $2,400,000
Services & Fees $0 $1,250,000 $0 $2,050,000 $0 $2,450,000
Total Annual Costs $650,000 $2,050,000 $650,000 $2,882,500 $650,000 $3,282,500
Opportunity Costs
Savings lost from continued maverick spend $0 $1,250,000 $0 $937,500 $703,125
Savings Lost $0 $1,250,000 $0 $937,500 $0 $703,125
Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125
23

24. Annual
Costs
Cost Categories Cloud
Year 1
Traditional Cloud
Year 2
Traditional Cloud
Year 3
Traditional
and Network and and
Network Network
Annual Costs
Maintenance / Hosting / Subscription
Hardware / infrastructure maintenance $5,000 $5,000
Software maintenance $27,500 $27,500
Application Support $50,000 $50,000 $50,000
Procure to Pay subscription $650,000 $300,000 $650,000 $300,000 $650,000 $300,000
Req to PO subscription
Expense management subscription
Contracts module subscription $0 $50,000 $0 $50,000 $0 $50,000
Payables module subscription
Spend analysis subscription $0
Transaction fees $0 $400,000 $0 $400,000 $0 $400,000
Hosting fees
Maintenance / Hosting / Subscription $650,000 $800,000 $650,000 $832,500 $650,000 $832,500
Services & Fees:
Supplier enablement $0 $50,000 $0 $50,000 $0 $50,000
Supplier fees $0 $1,200,000 $2,000,000 $2,400,000
Services & Fees $0 $1,250,000 $0 $2,050,000 $0 $2,450,000
Total Annual Costs $650,000 $2,050,000 $650,000 $2,882,500 $650,000 $3,282,500
Opportunity Costs
Savings lost from continued maverick spend $0 $1,250,000 $0 $937,500 $703,125
Savings Lost $0 $1,250,000 $0 $937,500 $0 $703,125
Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125
24

25. PayStream
Advisors
Agenda
• Cost
efficiencies
from
the
cloud
• Three
Simple
Tricks
to
Develop
your
TCO
• TCO
Case
Study
25

26. Client
Case
Study
–
Fortune
1000
Manufacturer
Manager’s
dilemma:
• $2
Billion
Manufacturer
of
Energy
Related
Materials
Q.
How
much
should
we
• Decentralized
purchasing
invest
in
finance
– Plant
managers
control
material
opera6ons
to
automate
– Services
procurement
(45%
of
spend)
black
hole
Purchase
to
Pay?
• ParIally
Centralized
AP
with
Imaging
– 1,200,000
annual
invoices
Q.
Will
our
investment
– Invoices
sent
directly
to
plants/regional
offices
be
made
worthless
by
– Limited
EDI/Electronic
Invoices
newer
technology?
• Issues/Pains
– Lots
of
paper/long
PO
approval
cycle
Q.
What
is
the
best
– No
visibility
to
non-­‐PO
purchases
due
to
approach
to
solve
our
– Poor
visibility
to
who’s
buying
what
problems?
– Late
payments/Missed
discounts
– Too
much
manual
effort

27. Spend
Op&miza&on
TCO
Analysis:
Case
Study
of
Fortune
1,000
Manufacturer
PayStream
populated
it’s
tool
with
actual
cost
informaIon
from
a
manufacturing
client.
Cost Categories Cloud
Year 1
Traditional and Cloud
Year 2
Traditional Cloud
Year 3
Traditional
Network and and
Network Network
One Time Costs
Software & Hardware
Software License $137,500
Software Upgrades $15,000
Hardware & Infrastructure $35,000
Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Typical Configuration & Implementation:
Data migration $0 $75,000
Services Procurement $0 $60,000
Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000
Professional services $0 $175,000
Program management (vendor) $0 $150,000
Training $0 $90,000
Typical Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000
Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000
Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000
Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500
Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500

28. One
Time
Costs
–
PayStream
TCO
Model
Cost Categories Cloud
Year 1
Traditional and Cloud
Year 2
Traditional Cloud
Year 3
Traditional
Network and and
Network Network
One Time Costs
Software & Hardware
Software License $137,500
Software Upgrades $15,000
Hardware & Infrastructure $35,000
Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Typical Configuration & Implementation:
Data migration $0 $75,000
Services Procurement $0 $60,000
Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000
Professional services $0 $175,000
Program management (vendor) $0 $150,000
Training $0 $90,000
Typical Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000
Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000
Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000
Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500
Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
28

29. One
Time
Costs
–
PayStream
TCO
Model
Cost Categories Cloud
Year 1
Traditional and Cloud
Year 2
Traditional Cloud
Year 3
Traditional
Network and and
Network Network
One Time Costs
Software & Hardware
Software License $137,500
Software Upgrades $15,000
Hardware & Infrastructure $35,000
Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Configuration & Implementation:
Data migration $0 $75,000
Services Procurement $0 $60,000
Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000
Professional services $0 $175,000
Program management (vendor) $0 $150,000
Training $0 $90,000
Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000
Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000
Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000
Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500
Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
29

30. One
Time
Costs
–
PayStream
TCO
Model
Cost Categories Cloud
Year 1
Traditional and Cloud
Year 2
Traditional Cloud
Year 3
Traditional
Network and and
Network Network
One Time Costs
Software & Hardware
Software License $137,500
Software Upgrades $15,000
Hardware & Infrastructure $35,000
Software & Hardware $0 $172,500 $0 $15,000 $0 $0
Configuration & Implementation:
Data migration $0 $75,000
Services Procurement $0 $60,000
Catalogs $0 $22,500
Punch-outs $0 $15,000 $0 $15,000 $0 $15,000
Professional services $0 $175,000
Program management (vendor) $0 $150,000
Training $0 $90,000
Typical Configuration & Implementation: $0 $622,500 $0 $15,000 $0 $15,000
Additional Complex Environments Set Up:
Multiple charts of accounts $0 $0 $0 $60,000 $0 $60,000
Other integrations e.g. HR, Budget $0 $10,000
Custom forms $0 $4,000 $4,000 $4,000
Custom fields $0 $0 $2,000 $2,000
Custom approval rules $0 $3,500 $3,500 $3,500
Additional Set Up $0 $17,500 $0 $69,500 $0 $69,500
Total One Time Costs $0 $812,500 $0 $99,500 $0 $84,500
30

31. Annual
Costs
Cost Categories Cloud
Year 1
Traditional Cloud
Year 2
Traditional Cloud
Year 3
Traditional
and Network and and
Network Network
Annual Costs
Maintenance / Hosting / Subscription
Hardware / infrastructure maintenance $5,000 $5,000
Software maintenance $27,500 $27,500
Application Support $50,000 $50,000 $50,000
Procure to Pay subscription $650,000 $300,000 $650,000 $300,000 $650,000 $300,000
Req to PO subscription
Expense management subscription
Contracts module subscription $0 $50,000 $0 $50,000 $0 $50,000
Payables module subscription
Spend analysis subscription $0
Transaction fees $0 $400,000 $0 $400,000 $0 $400,000
Hosting fees
Maintenance / Hosting / Subscription $650,000 $800,000 $650,000 $832,500 $650,000 $832,500
Services & Fees:
Supplier enablement $0 $50,000 $0 $50,000 $0 $50,000
Supplier fees $0 $1,200,000 $2,000,000 $2,400,000
Services & Fees $0 $1,250,000 $0 $2,050,000 $0 $2,450,000
Total Annual Costs $650,000 $2,050,000 $650,000 $2,882,500 $650,000 $3,282,500
Opportunity Costs
Savings lost from continued maverick spend $0 $1,250,000 $0 $937,500 $703,125
Savings Lost $0 $1,250,000 $0 $937,500 $0 $703,125
Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125
31

32. Annual
Costs
Cost Categories Cloud
Year 1
Traditional Cloud
Year 2
Traditional Cloud
Year 3
Traditional
and Network and and
Network Network
Annual Costs
Maintenance / Hosting / Subscription
Hardware / infrastructure maintenance $5,000 $5,000
Software maintenance $27,500 $27,500
Application Support $50,000 $50,000 $50,000
Procure to Pay subscription $650,000 $300,000 $650,000 $300,000 $650,000 $300,000
Req to PO subscription
Expense management subscription
Contracts module subscription $0 $50,000 $0 $50,000 $0 $50,000
Payables module subscription
Spend analysis subscription $0
Transaction fees $0 $400,000 $0 $400,000 $0 $400,000
Hosting fees
Maintenance / Hosting / Subscription $650,000 $800,000 $650,000 $832,500 $650,000 $832,500
Services & Fees:
Supplier enablement $0 $50,000 $0 $50,000 $0 $50,000
Supplier fees $0 $1,200,000 $2,000,000 $2,400,000
Services & Fees $0 $1,250,000 $0 $2,050,000 $0 $2,450,000
Total Annual Costs $650,000 $2,050,000 $650,000 $2,882,500 $650,000 $3,282,500
Opportunity Costs
Savings lost from continued maverick spend $0 $1,250,000 $0 $937,500 $703,125
Savings Lost $0 $1,250,000 $0 $937,500 $0 $703,125
Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125
32

33. Annual
Costs
Cost Categories Cloud
Year 1
Traditional Cloud
Year 2
Traditional Cloud
Year 3
Traditional
and Network and and
Network Network
Annual Costs
Maintenance / Hosting / Subscription
Hardware / infrastructure maintenance $5,000 $5,000
Software maintenance $27,500 $27,500
Application Support $50,000 $50,000 $50,000
Procure to Pay subscription $650,000 $300,000 $650,000 $300,000 $650,000 $300,000
Req to PO subscription
Expense management subscription
Contracts module subscription $0 $50,000 $0 $50,000 $0 $50,000
Payables module subscription
Spend analysis subscription $0
Transaction fees $0 $400,000 $0 $400,000 $0 $400,000
Hosting fees
Maintenance / Hosting / Subscription $650,000 $800,000 $650,000 $832,500 $650,000 $832,500
Services & Fees:
Supplier enablement $0 $50,000 $0 $50,000 $0 $50,000
Supplier fees $0 $1,200,000 $2,000,000 $2,400,000
Services & Fees $0 $1,250,000 $0 $2,050,000 $0 $2,450,000
Total Annual Costs $650,000 $2,050,000 $650,000 $2,882,500 $650,000 $3,282,500
Opportunity Costs
Savings lost from continued maverick spend $0 $1,250,000 $0 $937,500 $703,125
Savings Lost $0 $1,250,000 $0 $937,500 $0 $703,125
Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125
33

34. Manufacturing
P2P
TCO
Case
Study
Results
Result:
Overall
TCO
for
a
Cloud
based
soluIon
is
significantly
lower
than
a
comparable
On-­‐Premise/Network
soluIon
Year 1 Year 2 Year 3
Procure to Pay Costs Summary Cloud Traditional Cloud Traditional Cloud Traditional
and Network and and
One Time Costs $0 $812,500 $0
Network
$99,500 $0
Network
$84,500
Costs
Annual Costs
Total
$650,000
$650,000
$630,000
$1,442,500
$650,000
$650,000
$727,500
$827,000
$650,000
$650,000
$742,500
$827,000
Annual Differerence $792,500 $177,000 $177,000
Total Three Year Savings = $1,146,500

35. Case
Study
Results
Result:
Overall
TCO
for
a
Cloud
based
soluIon
is
significantly
lower
than
a
comparable
On-­‐Premise/Network
soluIon
Cumulative Total Cost of Ownership
On-site Development Costs
Initial Investment Year 1
$0
Year 2 Year 3
$3,855,000 $3,822,000 $3,987,625
Cloud Development Costs $0 $850,000 $850,000 $850,000
$4.50
Millions
$4.00
$3.50
$3.00
On-­‐site
Development
$2.50
Costs
$2.00
Cloud
Development
$1.50
Costs
$1.00
$0.50
$0.00
IniIal
Investment
Year
1
Year
2
Year
3

36. Tip
#1-­‐
ExecuIve
Sponsorship
“Get
to
yes.”

37. PayStream’s
Success
factors
of
Innovators
q Develop
compelling
vision
of
what
you
will
gain
with
Spend
OpImizaIon
q Calculate
a
realisIc
Total
Cost
of
Ownership
q Build
a
bullet-­‐proof
business
case
q Plan
your
aQack
&
build
a
roadmap

38. Download
The
TCO
Tool
www.paystreamadvisors.com

40. More
informa&on
Tony
Wessels
-­‐
Coupa
tony.wessels@coupa.com
Henry
Ijams
–
Paystream
Advisors
henry.ijams@paystreamadvisors.com

41. Coupa
World
Tour
www.coupa.com

42. Thank You!