Is it worth using Microsoft Dynamics in the cloud? How will you know? Read on to discover why IT spending as a percentage of revenue isn’t the only factor to consider when using Dynamics in the cloud.
IT Spending as a Percentage of Revenue Doesn’t Hold All the Answers
Business services’ average IT spending as a percentage of revenue was 3.70% in 2015, according to ISG Benchmark Data. But a move to the cloud can help you cut that. A 2016 survey by Computer Economics discovered that companies that move to the cloud spend about 21% less on IT spending as a percentage of revenue on average than those who don’t.
When you move to the cloud, you’ll see savings come from:
- Reduced need for large numbers of systems administrators
- Reduced hardware investment
- Less need to customize the software
- The fact that the cloud provider does all the hardware and software installation, freeing the in-house IT staff to focus on business initiatives
However, just looking at IT spending as a percentage of revenue by itself doesn’t explain why you’re spending more or less than average. More importantly, it doesn’t “reflect IT’s contribution to business performance,” according to a Gartner report. “Thus, IT spending as a percent of revenue needs to be considered in tandem with other IT intensity measures, as well as the context of business objectives.”
Why Data Accessibility and Analysis Matter
“Business intelligence is about finding trends in your data that you didn’t know existed, and then being able to act on those trends — that’s the real competitive advantage,” writes software developer Carl de Souza. And making the data easy to find, use, and evaluate is the next new trend. Forrester Research reported the priority of 54% of IT leaders was to deliver data and analytics to improve business decision making and outcomes.
So clearly, IT spending as a percentage of revenue alone isn’t going to help you figure out if you’re spending above, below — or wisely.
However, to get all the data you need that lives on numerous hard drives, mainframes, data centers, and mobile devices is a challenge. You need it in one place, so nothing’s overlooked. You need to integrate these data assets with the cloud and applications that make it sensible.
The IT spending as a percentage of revenue spent by leading companies isn’t much different from the non-leaders, but how they use their data is, according to research from a Harvard Business School professor and Keystone Strategy. Using enterprise resource planning and customer relationship management systems like Microsoft Dynamics mean they “are more likely to have access to a consistent set of current metrics with which to make decisions and are able to generate predictions about their business.”
Enter Microsoft Dynamics in the Cloud
Microsoft Dynamics can hold all the data you need, make it accessible to those who need access to it, all from a web browser — accessible anytime, anywhere and on any device — when you’re in the cloud.
Dynamics in the cloud means your “IT spending is moving from a low-value line item, infrastructure, to a high-value line item, business applications,” says Computer Economics.
When deciding whether to use Microsoft Dynamics on premises or in the cloud, don’t just look at IT spending as a percentage of revenue. Consider total cost of ownership.
This means for on premises, consider the costs of:
- Installation and setup
- Installation support and hardware monitoring support
- Customization and integration
- Time spent migrating data
- Cost of software and the upgrades you know will come
- Licensing fees
- User fees
- Hardware and the fees to maintain it
- New staff to monitor the system and keep it up and running
And for the cloud, consider:
- Setup fees
- Subscription fees
- User fees
- Managed support costs, if you choose
But, remember, when you use Microsoft Dynamics in the cloud, you’ll find savings because you’ll have:
- No hardware acquisitions or maintenance
- Host-provided migration
- Included software upgrades and patches
- Monitoring done for you
- Guaranteed 100% uptime
Even better? You’ll likely find improved business productivity. Much of what’s spent by IT on premises involves customization of software. But that’s not always necessary when you’re in the cloud, and in fact, users of enterprise resource planning systems “are 20% more productive in organizations where ERP systems have few or no customizations.”
Sixty percent of IT executives surveyed by Computer Economics in 2016 felt their IT budgets were somewhat or very inadequate to meet the needs of the business, which explains in part why many firms are moving to the cloud to serve more users for less money with better functionality, performance, and scalability.
What About Managed Services?
When you use Microsoft Dynamics in the cloud with Data Resolution, you get a partner you can trust — one that works diligently to understand your needs and help you grow your business.
You’ll benefit from one monthly bill that covers both infrastructure and software cost, which means you can budget and not be hit by any surprises.
Our services can include:
- Highly technical support staff available 24/7/365
- Enterprise monitoring and reporting
- Compliance and security
- Automatic backups and replication
- Anti-spam and antivirus
If you’d like to learn more about the benefits of managed services, beyond cost savings, read our post Why Managed IT Experts Are Proven to Outperform In-House IT, or, once you determine your total cost of ownership and discover the savings you’ll find in the cloud, get in contact with us — we’ll get you up and running so you can start saving.