Life cycle costs and the analytic network process for software-as-a-Service migration

Software-as-a-Service (SaaS) applications are currently an appealing concept for organizations with a small budget for IT infrastructure investment. By definition, in a SaaS setup, companies subscribe software applications on a pay-per-use system from external service providers over the internet. However, managers are looking for a decision framework that can be used to prioritize business software applications for migration into a SaaS environment. This paper attempts to fill in this gap by proposing a hybrid methodology which is composed of a total system life cycle (SLC) cost analysis for cost estimation and the analytic network process (ANP) for prioritization. Real test case data is used to validate the decision making capability of the framework. Sensitivity analysis was done to determine the robustness of the recommendations using Monte Carlo simulation. Results show that the proposed methodology could aid managers prioritizes software application projects for SaaS migration.