Calculating TCO for Cloud based Applications

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

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Calculating TCO for Cloud based Applications

  1. 1. Calcula&ng  TCO  for  Cloud-­‐based  Applica&onsEvaluating Options and Total Costfor Spend Optimization AutomationPayStream AdvisorsAugust  22  2012    Henry  Ijams    PayStream  Advisors      
  2. 2. Tony Wessels Henry IjamsV.P. Marketing Managing DirectorCoupa PayStream Advisors, Inc.
  3. 3. Twi8er  Hashtag  #TCOcloud
  4. 4. Coupa’s  Mission   Delivering software innovation that breeds responsible spending whileimpacting the company bottom line.
  5. 5. Coupa’s  Explosive  Growth  180%   Bookings   +95%   Renewal  Rate   150%   PlaMorm  Usage   YOY   YOY   YOY  
  6. 6. One  World,  One  PlaMorm  10  Languages  40   Countries  100,000  Users  
  7. 7. Customers  Highlights  Retail Finance Mfg. Health Care High Tech
  8. 8. 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  
  9. 9. 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  
  10. 10. 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.
  11. 11. 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)  
  12. 12. 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)  
  13. 13. 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.  
  14. 14. 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  
  15. 15. 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  
  16. 16. PayStream  Advisors  Agenda  •  Cost  efficiencies  from  the  cloud  •  Four  Steps  to  your  TCO  •  TCO  Case  Study         17  
  17. 17. 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  
  18. 18. 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 NetworkOne Time CostsSoftware & Hardware Software License $137,500 Software Upgrades $15,000 Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0Typical 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 $15,000Additional 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  
  19. 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 NetworkOne Time CostsSoftware & Hardware Software License $137,500 Software Upgrades $15,000 Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0Configuration & 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 $15,000Additional 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  
  20. 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 NetworkOne Time CostsSoftware & Hardware Software License $137,500 Software Upgrades $15,000 Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0Configuration & 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 $15,000Additional 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  
  21. 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 NetworkOne Time CostsSoftware & Hardware Software License $137,500 Software Upgrades $15,000 Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0Configuration & 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 $15,000Additional 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  
  22. 22. Annual  Costs   Cost Categories Cloud Year 1 Traditional Cloud Year 2 Traditional Cloud Year 3 Traditional and Network and and Network NetworkAnnual CostsMaintenance / 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 $832,500Services & 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 $3,282,500Opportunity 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 $703,125Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125 23  
  23. 23. Annual  Costs   Cost Categories Cloud Year 1 Traditional Cloud Year 2 Traditional Cloud Year 3 Traditional and Network and and Network NetworkAnnual CostsMaintenance / 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 $832,500Services & 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 $3,282,500Opportunity 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 $703,125Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125 24  
  24. 24. PayStream  Advisors  Agenda  •  Cost  efficiencies  from  the  cloud  •  Three  Simple  Tricks  to  Develop  your  TCO  •  TCO  Case  Study         25  
  25. 25. 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  
  26. 26. 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
  27. 27. 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 NetworkOne Time CostsSoftware & Hardware Software License $137,500 Software Upgrades $15,000 Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0Typical 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 $15,000Additional 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  
  28. 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 NetworkOne Time CostsSoftware & Hardware Software License $137,500 Software Upgrades $15,000 Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0Configuration & 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 $15,000Additional 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  
  29. 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 NetworkOne Time CostsSoftware & Hardware Software License $137,500 Software Upgrades $15,000 Hardware & Infrastructure $35,000 Software & Hardware $0 $172,500 $0 $15,000 $0 $0Configuration & 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 $15,000Additional 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  
  30. 30. Annual  Costs   Cost Categories Cloud Year 1 Traditional Cloud Year 2 Traditional Cloud Year 3 Traditional and Network and and Network NetworkAnnual CostsMaintenance / 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 $832,500Services & 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 $3,282,500Opportunity 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 $703,125Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125 31  
  31. 31. Annual  Costs   Cost Categories Cloud Year 1 Traditional Cloud Year 2 Traditional Cloud Year 3 Traditional and Network and and Network NetworkAnnual CostsMaintenance / 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 $832,500Services & 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 $3,282,500Opportunity 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 $703,125Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125 32  
  32. 32. Annual  Costs   Cost Categories Cloud Year 1 Traditional Cloud Year 2 Traditional Cloud Year 3 Traditional and Network and and Network NetworkAnnual CostsMaintenance / 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 $832,500Services & 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 $3,282,500Opportunity 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 $703,125Total Costs $650,000 $4,112,500 $650,000 $3,919,500 $650,000 $4,070,125 33  
  33. 33. 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  CostsAnnual CostsTotal $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
  34. 34. 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  
  35. 35. Tip  #1-­‐  ExecuIve  Sponsorship  “Get  to  yes.”  
  36. 36. 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  
  37. 37. Download  The  TCO  Tool  www.paystreamadvisors.com
  38. 38. More  informa&on  Tony  Wessels  -­‐  Coupa  tony.wessels@coupa.com  Henry  Ijams  –  Paystream  Advisors  henry.ijams@paystreamadvisors.com        
  39. 39. Coupa  World  Tour  www.coupa.com
  40. 40. Thank You!

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