Cost or Value? Unpacking the Business Software Dilemma

29.01.25 03:24 PM By Matt Koopmans

How Software-As-A-Service changed the position of Business Software

With online business applications subscriptions having matured over the last two-and-a-half decades, there has been a fundamental shift in how we view business applications. Where companies used to invest large sums of money to licence and implement their Enterprise Resource Planning (ERP) systems, the Software as a Service (SaaS) model has proven to be a significant disruption. While we can see the proliferation of business applications due to the higher affordability, is it all sunshine and roses, or perhaps a bit of a mixed blessing?

Democratising business applications

The business applications have become so affordable, that anyone can afford them. Even an entire suite of integrated applications can be subscribed to for less than $100 per month for a single user. Of course, this is a good thing. The cost stopped being a barrier. A micro-business - even a single employee business, can be automated via integrated applications that many larger organisations can only dream about. I speak from experience. When I started Aurelian Group almost eight years ago, it was only me, and the integrated suite of Zoho products. It allowed me to be highly productive, always on top of what needed to be done. 

But is this true for every small business?

And how about larger organisations? 

The hidden cost of cheap

I was lucky when I implemented our systems. I have been doing this work for clients for decades. The technology may be different, but ultimately, if you grasp where you want to go in the business, the implementation choices become clear rapidly. 

As it was a brand new business, I did not yet have a lot of client commitments, and could spend considerable time building the system and getting ready. Not so today - our own system implementation takes a back-seat to actual client work, or sales and marketing efforts.

But those that implement themselves but are not in the business of implementing business applications... well, you don't know what you don't know. There are implementation choices that can cost dearly down the track.  

Another consideration is the opportunity cost associated with you spending time on getting the system right. This is time not spent on working R&D, on sales, or delivery, or anything else essential to the business. 

Consider this: if you pay hundreds of thousands of dollars for licences, you are more likely to spend considerable funds to make that investment work for you. If you spent a few hundred dollars per month, then why would you invest in making it work for you?

Strategic value (or the cost of not doing it)

Imagine that you are in the market for a new car. Let's say you use it for the daily commute and perhaps some errands. If you are not a "car enthusiast", you'd look at cost versus value. The value is limited to what you expect to get out of it. 

Now let's imagine the same scenario, but you need the car to make a living - for example a taxi business. Now other elements come into play - how much does it cost to run? What is the depreciation? How much "down time" is acceptable (i.e. filling up with fuel, time in maintenance, or repairs)? 

With these factors in mind, your purchase decision will significantly differ from the one where you only had to consider the daily commute and some errands. Same for the software - it is a part of your operations - downtime means customers are not served, and invoices are not sent. 

Sticking with the car analogy - let's say you have a fleet of cars, and you employ drivers. Now the car's efficiency (or lack thereof) will have immediate impact on the return on employee cost. For example, if one of the cars broke down, your driver cannot earn money for the business, while the cost of the salary does not stop. Similar for every stop to get fuel - the car is not "productive", therefore the driver is not "productive". 

With a well implemented suite of business applications, we minimise the down-time of personnel, we increase the time they earn money for the business by adding value to your customers. Regardless of the cost of the software, the value in efficiency gains translates into higher gains for the business. 

Business applications are a strategic investment

As with the car analogy, a suite of business applications can make a significant impact on the business top-line (get more revenue) as well as the bottom-line (at a lower cost). But you must pick the right applications. Buying a luxury vehicle such as a Rolls Royce for taxi service, whilst the vehicle will be perfectly fine (better than that!) in providing the service, one has to question the return on investment. In contrast, a 20 year old, cheaply made and poorly maintained small car would also not be a sound business decision. With the choice of business applications, it is neither a luxury (ego) decision, nor a decision primarily driven on cost.

With the right balance between cost and value, your business applications suite can grow with your business, adapt to new processes, and facilitate entering new markets. Just like your business, a well implemented suite of business applications is never quite finished, there is always more value to extract. 

Your strategic partner in Business Applications

Aurelian Group is your partner in your business applications journey. We look at your business with you, and help diagnose the issues so we can stabilise. While we look at the entire business system, we look at the whole, as well as the detail (because every detail either contributes to an outcome, or it contributes to cost), we put our expertise and creativity to work and configure for you the business system most cannot believe they can afford, or could imagine it exists. Our unique subscription model approach means that while you are amazed at the outcome, there are no surprises with regards to the budget; the software licences, implementation services, support, maintenance, and enhancements are included in the one subscription fee, paid monthly. Contact us to find out more.

Matt Koopmans