The Benefits of Cloud-Based Billing
A robust billing platform is critical for any organization that offers subscription-based services. Yet, they can be expensive to own and operate, and often lack the capacity to support the organization as it grows. Cloud-based billing platforms are a relatively new alternative but have a range of benefits that make them an attractive option.
Bewildering acronyms like SaaS, PaaS, or CaaS may make it sound complicated, but cloud-based computing is rapidly replacing on-premise software (where applications reside on a local server owned and managed by the customer) as the preferred method for delivering business applications. Its meteoric rise has been fueled by the wide availability of reasonably priced high-bandwidth networks, a competitive data center market, and radically improved remote management tools.
It has particular advantages for complex and business-critical applications, such as billing software, where a loss of service or slow response to competitive challenges will seriously harm the business.
Leaving the operation, management, and maintenance of business applications to experts — billing software vendors with knowledge, experience, and technical skills — means the customer can focus on their core day-to-day business activities. Moreover, they benefit from lower costs, improved system resilience, and the flexibility to change service components whenever needed.
There’s a Reduction in Direct and Indirect Costs
A recurring (typically monthly) fee covers the use of the billing software, support, maintenance patches, and feature upgrades. Depending on the organization’s accounting rules, the monthly fee can be booked as operating (rather than capital) expenditure, which could have tax advantages.
This contrasts with on-premise software which has a big upfront licensing cost, and separate charges for other service elements that often vary month by month and play havoc with cash flow.
Since the billing software is located remotely, there’s no need for local hardware or the associated floor space or utilities. This results in sizeable savings for organizations that have previously used several systems for billing management (help desk, device management, order tracking, etc.), each of which might have needed their own hardware and local support team.
Another advantage is ongoing cost management. Cloud-based billing software vendors use their buying power to negotiate favorable supply contracts with hardware or operating software vendors, thereby limiting increases in the monthly fee.
Organizations moving to cloud-based billing still need to monitor costs since it’s not uncommon for user licenses or storage to lie unused and included in the monthly fee. A good vendor will provide details in a monthly usage report, but buyers should apply the same rigor to managing cloud-based charges as they use for other supplied services.
It’s Easy to Scale Billing as the Organization Changes
New features or capacity can be easily added when needed, such as in response to changing market conditions or competitive moves.
For example, a hoster might want to launch tiered-rate or bandwidth-based billing, for example, or bundle different product combinations for different countries. New features can be evaluated, perhaps piloted with a few customers, before committing to full use, and can be added or removed as needed.
This contrasts with on-premise software where the software, and consequently the cost, might include features that are never used.
As well as supporting organic growth, the ability to change capacity quickly means peaks, such as vacations or Black Friday type sales events, can be handled easily.
System Deployment and Management is Performed by the Experts
An on-premise billing solution needs a local IT team to install, configure, and test the product for first-use, and then provide ongoing support such as applying vendor maintenance patches, managing system capacity, and helping users. This can be a sizeable cost and isn’t the best use of skilled resources. Vacations and illness will also quickly disrupt end user service.
On the other hand, cloud-based billing can be up and running in a few hours, with little on-site support. Software updates are implemented and tested remotely, usually out of hours to reduce the impact of any downtime, and without needing multiple downloads and installation scripts. The vendor has a team of skilled technicians, meaning problems are fixed quickly, improvements — load-balancing, performance tuning — are carried out regularly, and there’s always a fallback if any of the team are out the office.
Robust Security and High-Availability are the Main Vendor Priorities
Security worries are often the main concern when considering cloud-based billing, but vendors have a lot to lose if they suffer a security breach, so protection is one of their highest priorities.
They employ security experts who ensure the software, network, and data are protected by complying with security standards, cloud-computing standards and application specific standards such as those required by the payment card industry. They’ll also enforce permission-based access to ensure information is available only to those who need it.
Aside from security, organizations want to be sure their cloud-based billing service is resilient and can operate 24×7. Vendors respond to this requirement by investing in resilient technology and architecting their platform for the unique requirements of billing. This allows them to offer high-availability service level agreements; something else an on-premise solution can’t match.
They’ll also spread data across different servers, typically in different locations, and take frequent backups so there is never a catastrophic loss.
This list of benefits forms the basis of a business case that will help overcome internal resistance to moving to a cloud-based billing solution. A good vendor will strengthen it by evaluating your current and planned workload; developing a solution to meet your requirements; and quantifying the cost, time, and resource savings.
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