Key Cost Issues Around SAAS, Hybrid, and On-Premise Models for Supply Chain Compliance

Supply chain compliance using Microsoft Dynamics AX is a complex and confusing issue todiscern for most companies.  A starting point for effective cost evaluation must begin with a clear understanding of which approach best serves your business objectives (covered in two previous articles). With this in mind it is time to explore cost as a variable in your decision. 

The advantage of the SAAS model is usually a lower upfront cost. With system administration and mapping conducted at a central location and amortized across multiple customers, the cost is reduced.  For companies with simple mapping and low EDI volume, this model is frequently the most logical and affordable choice. SAAS in the EDI space has been around for over twnty years as large companies seeking to get their suppliers trading at the most basic level started to use services akin to e-mail messaging. For the company wanting to meet a mandate and move a few segments of data into their ERP system, this model is often the most economical.

The value of compliance is more than simply meeting a mandate. In parallel, total cost of ownership (TCO) should include more than the initial purchase price.  Elements such as the number of trading partners you‘ll be trading with, the number and complexity of the electronic documents you will trade, and importantly, your ability to maintain the accuracy of and control over your information arecrucial in defining ongoing costs AND benefits which impact TCO.

For the on-premise and hybrid models, the upfront investment is almost always more significant. Software must be purchased and configured and the effort requires a deeper understanding of integration at the point ...