In March we were talking about funding and financing challenges related to Software-as-a-Service and other cloud-based backoffice platforms. Since then, GASB has produced an exposure draft that outlines the potential accounting treatment for these platform investments.  It gives states and other public sector entities some light at the end of the tunnel for finding the resources to support the costs of their journey to the cloud.

If approved, the guidance from GASB would allow public sector entities to treat SaaS applications and cloud technology contracts (called “subscriber-based information technology arrangements” by the GASB) like leased assets.  But this guidance won’t take effect until years ending after June 15, 2021.

Until then, public sector leaders will still need to consider how states and public sector enterprises can afford to finance their journey to the cloud.

How might states solve for that challenge?

Here are three possible solutions:

  • Use innovation and analytics to find pools of trapped value that could help pay for a SaaS or cloud platform
  • Create a living benefits realization plan with clear milestones and enforceable goals for the enterprise to achieve in order to achieve the project’s ROI
  • Explore the benefits of an Intelligent Back Office, with new user interfaces and AI to make back office systems the engine of innovation.

As oxymoronic as “Intelligent Back Office” might sound, I’ll be sharing thoughts on how it can be achieved in future posts.

Have comments or questions? Let’s stay in touch. Connect with me on Twitter and LinkedIn and stay tuned for upcoming blogs.

Pari Sabety

Former Budget Director – State of Ohio

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