Recently, On-Demand or ASP (Application Service Provider) subscription solutions, like Salesforce.com, have realized impressive growth and adoption versus purchased client/server solutions. This success has led to improved adoption of subscription-based solutions for meetings and events, including association management systems, registration and housing solutions, floor plan management, and speaker management. With numerous technology options to choose from, should you purchase the software or opt for a subscription model?

Here are some of the major considerations:

• Time - If speed to market is important, On-Demand or ASP solutions are usually your best option. You don't need to install software or purchase better hardware; you just need reliable and sufficient Internet connectivity and training. Most subscription-based solutions are configurable and can be implemented quickly.
• Unique Needs - If you need to make quite a few customizations to accommodate your business processes, buying or building may be your best option. One of the advantages of a subscription solution is that you usually receive an upgrade with each new release. A highly customized solution can be an obstacle to moving to the most current version of any software. (An organization needs to carefully evaluate the benefits of sticking to their guns with unique needs versus adopting best practices of other organizations.)
•  Infrastructure - Whether you purchase the software or subscribe to one, you'll want to have limited down time, high security, and good redundancy. If your solution is hosted externally, ask for a service level agreement that guarantees an up time of 99 percent or more.
• Maintenance and Support - For purchased solutions, you normally host the software and pay an annual maintenance fee. On-Demand or ASP solutions are hosted externally and maintenance fees are included in the subscription fees.
• Pricing - On-Demand and ASP pricing are subscription models which allow you to pay as you go. Be sure you have a thorough understanding of the pricing model components and the effect your volume will have on your total spend.

 Smart organizations will weigh the factors above along with their business rationale in order to make a good decision. Major technology decisions are normally best done by a group representing all of the internal stakeholders. At its core, most technology should improve efficiency, reduce costs, improve decision-making, and make it easier to do business with you. Finance and IT will normally want to perform ROI and Total Cost of Ownership (TCO) calculations before making a final decision.

 Return on Investment (ROI) % = total benefits - cost to implement X 100 Investment $

Tangible benefits may be realized through revenue gains (increased sales), cost savings (time savings, increased efficiency, hard dollar expenses), or cash-flow improvement. By applying a confidence factor against each assumption (i.e., 75 percent chance), you will increase the accuracy of the ROI calculation. Total Cost of Ownership (TCO) = Purchase price + cost of operation

Operating costs fall primarily into two buckets: upfront implementation and ongoing expenses (including growth and change). For both, estimate your expenses in the following areas, assuming five years of ownership:

• Hardware - file servers, backup systems, firewalls/security, user systems
• Software - server and user license costs, application support and maintenance fees, upgrades
•  Personnel - implementation, customization, programming and report writing, database maintenance/synchronization, network architecture, adding/modifying user accounts, user support, user training
• Network and connectivity - wired and wireless network installation and monthly expenses, performance tuning and monitoring
• Facilities - hosting facilities, office space, disaster recovery. TCO analysis will almost always point to a subscription solution for the short term. Smaller organizations or software solutions that may compete for IT resources will usually also benefit from an On-Demand or ASP solution.

° Dave Lutz is managing director of Velvet Chainsaw Consulting, www.velvetchainsaw.com, a business improvement consultant specializing in the meeting and event industry. His company assists organizations in realizing top- and bottom-line growth by delivering customer-focused solutions in business development, best practice and process improvement, strategic planning, and training.