In this article, we look at some of the main hurdles facing finance today and identify tools and technologies that can help you overcome them. We also look at how operating from the cloud offers more connectivity and innovation, while providing remote access and a platform for growth and expansion, without sacrificing governance and control. The cloud can put visibility in the palm of your hand, making you more effective and more efficient.
Eight to ten years ago, cloud deployment options were hardly a consideration. Most accounting solutions were still licensed and deployed on your own premises, or perhaps licensed and hosted by a reputable third party.
“Cloud” had yet to become part of the business vernacular and Software as a Service (SaaS) was a relatively new and poorly understood concept. While other complementary solutions, particularly Customer Relationship Management (CRM) tools, were headed in that direction, shifting your accounting to the cloud required a higher level of trust that had not yet developed.
How times have changed! Today, most businesses have some sort of cloud strategy and the shift to the cloud and SaaS has begun in earnest. If you are currently or will soon be selecting a new solution, the cloud should be a critical factor in your evaluation. You might think decisions about deployment could be deferred until after you have chosen a solution, but this must be considered upfront as not all solution providers offer the same deployment options.
What are the deployment options?
In recent enterprise solution studies, Mint Jutras asked how the participant’s current solution is deployed. In this study, we use “ERP” as shorthand for the software used to run the business, and that includes accounting and more.
The following options were presented:
- Software as a Service (SaaS): Software is delivered only as a service, not on disc or other media to then be loaded onto another machine..
- Traditional licensed on-premise: You license the software and are responsible for managing and maintaining it on your own premises.
- Hybrid: Parts are licensed and maintained on-premise and parts (e.g. add-on modules) are SaaS.
- Hosted by an independent third party: Software is licensed by you, but you pay another party to manage and maintain (host) hardware and software.
- Hosted and managed by your ERP vendor: Software is licensed by you, but you pay your solution provider to manage and maintain (host) hardware and software.
Web-enabled user interfaces cloud the issue (pun intended). Many non-technical users simply don’t know whether their organisations have licensed a specific version of the product (and perhaps pay maintenance to have access to updates) or if they subscribe to software as a service. Those responsible for the purchase and deployment decisions must understand all the potentially confusing options.
With almost every solution provider hopping on the cloud bandwagon today and many of the largest claiming victory in the race to be the biggest and best, we fear many business users are also hopping on that wagon without truly understanding the benefits. Without this kind of knowledge, choices are being made without full understanding and some of those benefits are being left on the table.
Many solutions that were once only available as traditional, licensed deployments (on your own computer or a trusted service provider’s) now offer a choice. But some of these “cloud” choices are really hosted solutions, which contributes to the confusion. Other solutions that were born in the cloud may only be offered through SaaS. It is important to understand the difference between cloud and SaaS, as well as the different types of SaaS (multi-tenant and multi-instance).
SaaS or Cloud?
While ‘cloud’ and ‘SaaS’ are often used interchangeably, there are some key differences to note.
Cloud refers to the accessing of software, data, and storage over a network such as the internet. Perhaps you bought a license for the software and installed it on your own devices or those owned and managed by another, but your access remains through the internet, aka the ‘cloud’, regardless of whether it is public or private.
SaaS is exactly what is implied by the acronym. Software is delivered only as a service. It is not delivered on a disc or other media to be loaded on your own (or a third party) computer. It is usually paid for on a subscription basis and does not reside on your computers at all.
This means that all SaaS is cloud computing, but not all cloud computing is SaaS.
Traditional on-premise or hosted solutions might (or might not) be accessed via the cloud, although this is more likely to be a private cloud. Those delivered as a service (SaaS) might be offered as multi-tenant or single-tenant (also known as multi-instance) or both.
Single-tenant or Multi-tenant SaaS?
With a multi-tenant solution, there is only one instance of the software itself. Each subscriber’s data is segregated and secured. While everyone runs a common set of code, configuration settings may be used to tailor the look and feel of the solution and to personalise business processes.
With a single-tenant SaaS solution, each company is given its own instance of the (hosted) software but may share common services, such as an integration platform and security.
With the distinct advantage of only having to maintain a single line of code, solution providers that offer only a multi-tenant SaaS solution are typically able to deliver more innovation than those that offer the same solution with a choice of deployment options (on-premise, single-tenant, and/or multi-tenant SaaS).
Providers delivering on-premise solutions must maintain multiple versions of the software. Very often the software is offered on a choice of operating systems and databases, and the vendor must support multiple release levels determined by its customers’ ability to keep pace with upgrades. For every person-day they spend on innovation, they spend another multiple of that day making sure it works across multiple environments. Those offering a multi-tenant SaaS solution exclusively can devote their entire development budget to innovation.
Solution providers offering single-tenant solutions might not have to deal with different operating systems and databases, but the vendor still doesn’t have the luxury of maintaining a single line of code because not every customer will be upgraded simultaneously.
Indeed, some promote this as a “feature” that offers the customer more control over the timing. Some vendors choose to not deliver their SaaS solutions as multi-tenant for one of two reasons: Either their solution is not architected to support this, or they feel they can deliver a more customised solution through multiple instances. But with modern architecture and a strong platform, we’d question whether invasive customisation is even necessary or advisable.
If the customisation truly differentiates your business, it may be worth it. If it does not, if its only purpose is to perpetuate the way things have always been done, then don’t do it. Don’t risk building barriers to further innovation. It’s really as simple as that.
The benefits of SaaS
Still unsure of your deployment options? Have a look at the following possible benefits of moving to a SaaS solution: They can be broken down into categories as follows:
- Improved access and transparency
- Cost considerations
- Growth and distributed environments
Being able to access your data at any time and from anywhere is one of the major benefits of a cloud solution.
There are a few select key performance indicators that help finance leaders stay abreast of the business. Previously, that information was only accessible behind a secure firewall on your laptop or desktop. Today, it’s available in the palm of your hand – with no compromises on security. Why wait for mail or text alerts of changes? With connected cloud solutions and easily accessible dashboards on your mobile device, there’s simply no reason to!
Costs are saved by eliminating the ongoing cost of hardware, maintenance, upgrades, and obsolescence. SaaS also helps reduce start-up costs, typically going ‘live’ a full month earlier than the norm. Cost savings can also be derived from reducing the cost and effort of upgrades.
SaaS solution providers can potentially deliver more innovation through more frequent and robust upgrades, particularly those maintaining a single line of code through multi-tenant solutions. However, this should be investigated thoroughly – just because it can be done, doesn’t mean it is.
The “access any time, from anywhere” nature of a cloud solution is also conducive to supporting distributed users and bringing up remote sites quickly and easily. Even if you don’t have a highly distributed environment, chances are you have workers who need to access applications and data remotely, often from mobile devices. Or you might (just now) be expanding globally. The internet has levelled the playing field, enabling even tiny companies to establish a global presence.
Historically, growth only happened in established economies. Now, new markets are opening in emerging economies as the internet, innovation, and advanced technologies create unprecedented growth opportunities in newly established middle classes throughout recently industrialised countries. Not only does this result in increasingly remote and distributed environments, it also adds risk and creates new challenges in maintaining governance and control.
With these opportunities come a fair level of risk, and growing companies will need to take some chances and be willing to fail – but do so quickly to move on to the next challenge. They will need to leverage technology to manage, maintain control, and reduce risk – and do so rapidly.
When SaaS was far less popular, participants worked hard at analysing its pros and cons. Now, with all the media and vendor hype, it appears to simply be a given. The surge towards the cloud seems to be unstoppable, and as people and companies accept the inevitable, they’ll stop looking at the decision with a critical and questioning eye.
The choice between solutions and deployment options has never been greater. Look for these choices to continue to expand, but remember that with increased choice comes the need for better due diligence and good business decisions.
Technology is advancing at a rapid rate, and it is important not to be held back by pre-conceived notions and misperceptions. Not all deployment options are available from all solution providers and not all SaaS solutions are created equal—don’t treat them as a commodity. Make a careful choice that is right for your business.
CFO 3.0: Digital Transformation Beyond Financial Management
Discover how CFOs are playing a key role in leading the digitalisation of medium-sized businesses and learn how to move from a 'historian' to a 'visionary' within your business.
Recommended Next Read
How manufacturers can unlock value from the circular economy
Discover how Sage Intacct takes the stress away and can make financial management fun and empowering.