IT managers increasingly see their role as delivering business value rather than managing technology. According to the same research, their business priorities reflect this. The top five objectives are business process improvement, reducing enterprise costs and increasing the use of information/analytics, improving workforce effectiveness and attracting new customers. Everyone around the boardroom table shares these goals. But when you look at where IT departments actually spend money, a different story emerges. Around 90 percent goes on routine maintenance and administration costs. Only a small fraction is available for innovation. When money is tight, it sometimes seems easier to cut this part of the budget when, in reality, smart decision-making can turn early investments in change and improvement into big savings later by reducing the long-term burden of routine maintenance. Hosted services (also known as cloud computing, Software-as-a-Service or SaaS) are a good example and the subject of this paper.