The Cloud is Raining Savings on Real Estate Companies
What’s the best way for real estate owners and operators to manage their IT costs? Traditionalists may say on-premise IT systems are best. But a new generation of cloud providers point out the up-front savings and the benefits they deliver in terms of speed, scalability and agility.
Computer Economics, provider of financial metrics for IT management, recently conducted a study of these opposing views. Their results indicated that the cloud solution was the winner in cost reduction. After comparing spending levels of cloud users versus on-premises IT systems, Computer Economics’ research determined that on average “cloud users spend 21% less on IT as a percentage of revenue and 16% less on IT on a per-user basis.” Additionally, organizations that have gone to the cloud invested those savings in innovation, resulting in many strategic benefits.
Granted the participants in the Computer Economics study were big companies (at least $40 million in annual revenue), but the scalable benefits of the cloud translate into good news for smaller players, too. Here are some that real estate companies can tap into.
Savings Aren’t Limited to Data Center Spending
Cloud users in the study obviously spent less on data centers, but they also cut the costs of IT personnel as well (from 42.3 percent of IT budget to 30.9 percent). As one IT executive told Computer Economics: “Better to have them closer to the customer, so that they can focus on delivering business value where it counts.”
Fewer Customizations, Lower Costs
To make even minor modifications, on-site systems need costly tech support. Cloud systems, on the other hand, need much less customization because of their built-in flexibility.
Cloud Users Have More to Invest in Innovation
On average, the on-premise IT companies in the Computer Economics study spent 80 percent of their IT budget on ongoing tech support, and 20 percent on new initiatives. Compare that to the 69 percent cloud users spent on support – leaving 31 percent of their budget available for innovation. This is a benefit particularly important to real estate companies looking to grow in today’s dynamic market.
It’s Not Just About Costs
In addition to cost savings, moving to the cloud helped the companies in this study in the following ways:
- Speed of implementation – The Cloud means no more installing hardware or software, so it allows businesses to move as fast as they need to compete effectively.
- Scalability – Cloud software handles increases in bandwidth with ease. IT department limitations will not hinder a company’s potential for rapid growth.
- Ease of Upgrades – Upgrades are handled without any effort on the customer side. Bottom line: no disruptions to operations as improved versions of software kick in.
- Agility – If a business has an eye on opening new offices, the cloud can make things a lot easier. Simply put, they can skip the step of having to develop IT infrastructure in multiple locations.
Step Up to the Cloud Now
The Computer Economics’ study offers potent evidence of both cost savings and strategic benefits in using cloud systems. “The total cost of running an IT organization that is largely in the cloud is significantly less than one that relies on its own IT infrastructure,” the research concluded.
If your organization is not on the cloud yet, consider engaging the services of an IT partner that specializes in cloud-based real estate lease management and accounting, like Integrated Business Systems (IBS). They can help determine whether the cloud is the right direction for your organization.
To get a full list of the recommended next steps and more details on the cloud versus traditional on-premises systems, take a look at the full Computer Economics Whitepaper.