To do this you must define the time frame for which his company evaluates this type of investment. Typically in software, an investment products of this type it should be analyzed within a framework of 3 to 5 years. You should identify all costs or investments associated with the software in both models and be able to do a comparison of financial type on how much it costs comparatively each solution. Here consider all factors involved in the operation of an information system and enhance them in the analysis period. No.2: Projected project cash flow. A theme is to identify how much it costs the system in its entirety. Another is to identify how investment will be implemented in time. That’s why a very important variable is to know which is the availability of financial resources in time and what are the preferences of the enterprise in this regard at the level of management and finance to compare both models.
The model On Premise demands greater investments in the short term (although funding mechanisms can be used). The On Demand model, is usually more distributed at the level of spending. No. 3: investment policies and management of assets of the company. As part of the policies of financial administration owned by any company, is the way as the Administration wishes to be handled and accounted for the Organization’s assets. Under the model On Premise, usually software licenses are managed as an asset (except in cases in which it makes use of financial services such as Leasing, this also depends on the legislation in each country) and in the On Demand model, handles the service of software as an expense. They are two different schemes from the accounting point of view and it is important to be present are the policies of the company in this regard in order to assess which procurement scheme is more favorable.