Dispelling the Myths of SaaS Accounting Solutions
Content
We b B a s e d A c c o u n t i n g S o l u t i o n s F o r 2 1 s t C e n t u r y O rg a n i s a t i o n s
WHITE PAPER
DISPELLING THE MYTHS OF MOVING TO THE NEXT GENERATION OF SAAS OR WEB BASED ACCOUNTING SOLUTIONS
3 7 Wa r r e n S t r e e t , L o n d o n , W 1 T 6 A D • t e l e p h o n e : + 4 4 ( 0 ) 2 0 7 - 3 2 8 7 - 4 0 9 6 • e m a i l : i n f o @ a q i l l a . c o m • w w w, a q i l l a . c o m
Web Based Accounting Solutions
Overview The traditional model for buying accounting software was to pay an upfront licence fee and then ongoing maintenance or upgrade charges. This often involved a large initial capital outlay – both in terms of purchasing the software itself and the hardware to run it. As software has became more complex, it also means companies require specialists in particular software to configure, manage and offer support on an on-going basis. In the past decade, however, accounting software has changed and there are now a range of options available to meet all companies’ needs on-demand. These “Software-as-a-Service” (SaaS) applications allow businesses to use the latest software developed on a subscription basis, removing the need for upfront capital investment in terms of hardware and software, as well as upgrade costs. It also means that businesses, no matter what their size, no longer need to manage and support accounting applications in-house, as that is taken care of by the company supplying the service. This white paper, the second in the Aqilla Advisory series, examines some of the myths associated with using web-based accounting software and provides a checklist of things to consider when looking at this type of application. Making The Change Not everyone is comfortable with change, yet it’s a constant of modern business – particularly when it comes to technology. Whether it’s as a result of new regulatory requirements or improved efficiency, companies are continually looking at the latest technologies and how they can help them. Recent economic conditions also mean that many businesses have to deliver increased productivity with fewer resources. The adoption of SaaS solutions is one way in which a business can become more effective, improve efficiency and save money. However, businesses need to select the correct application for their needs and ensure they are working with a reputable vendor.
Good for you
Good for the environment
Good for business
Clive Longbottom, Service Director, Business Process Analysis, at Quocirca recently commented that, “Web-based applications are changing the way people think about software – right across the business, from the IT team up to the board – because they give companies of all sizes access to the very latest applications for a fixed monthly charge, without the need for upfront investment and the headache and cost of ongoing management and maintenance.” The most critical decision for any company looking at SaaS is choosing the right supplier, so it is essential to do detailed research. Look for a company that understands the market, with a proven track record and heritage, not only in accounting software, but also in web-based technologies.
We b B a s e d A c c o u n t i n g!
w w w. a q i l l a . c o m
1
Things to consider include: • What is the pedigree of the company, or the solution? • Does the supplier understand your market and business? • Are there any case studies of businesses similar to yours available? • What scope of functionality is available? • Does the solution exhibit an appropriate level of effective fiduciary behaviour e.g. double entry and proper treatment of debit and credit events, journal control, and period?
What are the perceived risks of SaaS?
Research has shown that executives trust existing internal systems over SaaS or web-based systems by a ratio of five to one, mainly due to fears around perceived security threats and the loss of control of data and systems. However, many of those fears are unfounded – and here we dispel the five most common myths surrounding SaaS. Myth 1 – SaaS is less reliable and less secure than on-premises applications SaaS vendors understand that security is one of the key considerations for businesses and have all developed policies and infrastructure to safeguard clients’ data. They are dedicated to developing and delivering the application, and provide a level of resilience and security well beyond the majority of in-house systems – these include guaranteed levels of availability, daily remote backup, business continuity provision and also remote access, which means that data is not stored on laptops or desktops that could be lost or stolen. Myth 2 – With SaaS businesses lose control of data Clients can exercise complete control over their data by defining the right service level agreements – in the same way as customers’ money in the bank remains the customers’ money, data remains the property of the user. It is worth understanding where the data is stored, as it may be governed by different access and privacy laws. For example, in the United States of America, the Patriot Act permits law enforcement agencies to access the data if they consider it relevant to their investigations. If data is accessed in this manner, the data holder (likely to be a US-based vendor) is not allowed to tell the overseas data owner that their data has been accessed, even if the vendor is contractually bound to do so. Myth 3 – The technology is new and unproven Everyone who uses the internet uses SaaS in some form, most commonly with banking, tax submission (e.g. HMRC) and webmail applications, so it is certainly nothing new. In the business environment, SaaS has been used effectively for over a decade with applications like Customer Relationship Management (CRM), with vendors such as salesforce.com becoming a major player in the market. It was only a natural progression for other types of business applications, such as accounting, to move over to the web-based model.
We b B a s e d A c c o u n t i n g!
w w w. a q i l l a . c o m
2
Myth 4 – SaaS applications are less feature rich Web-based accounting applications tend to be easier to use than their on-premises cousins, but also provide advanced functionality beyond simple book-keeping. Users are presented with pervasive functionality giving everybody the information they need, on demand, anytime from anywhere. Using the right solution should allow for information to be easily shared both inside the organisation and externally with accountants and other trusted parties or suppliers. Myth 5 – The only real benefit of SaaS is cost savings Cost has often been considered as the major driver for businesses looking at web-based applications, however, these types of applications have a much wider range of benefits – including the flexibility to use them wherever there’s an internet connection, which means that people reduce their downtime and can work with colleagues even when they’re away from the office. According to latest research from Aqilla, the reality is that cost is no longer the only factor driving adoption of web-based applications. The majority of finance professionals see the ability to use applications anywhere and collaboration with colleagues as being more important. The research, conducted at a series of events held across the country by the Institute of Chartered Accountants in England and Wales (ICAEW), highlighted that more than three quarters (76 per cent) of respondents saw flexibility as a key benefit of web-based applications, with 52 per cent impressed by the ability to share information more effectively across the whole business. Surprisingly, less than one third (30 per cent) cited value for money as a reason to buy.
Web based accounting solutions free up time to allow a company to focus more readily on its core business (not its IT); react more quickly to market conditions; reduce costs; encourage collaboration; report quicker and improve efficiency. Modern design providing easy to use document centric and work-flow features makes it easy to use and easy to integrate with, being highly relevant in supporting the modern distributed (and often mobile) enterprise.
The SaaS Supplier Check-list: 10 questions to ask a prospective supplier
1. 2. 3. 4. 5. 6. 7. 8. 9. What is the company’s heritage/background? What security policies and infrastructure do they have in place? Where will my data stored – is it in a data centre? Is it on-shore in the UK? Are there any case studies or reference sites of similar companies available to me? What is the implementation process – how long does it generally take? Are there Service Level Guarantees for availability? What security policies and infrastructure do they have in place? What functionality is included in the standard product? What is the term of the contract?
10. What level of support do they provide, in terms of set-up and ongoing?
We b B a s e d A c c o u n t i n g!
w w w. a q i l l a . c o m
3
WHITE PAPER
DISPELLING THE MYTHS OF MOVING TO THE NEXT GENERATION OF SAAS OR WEB BASED ACCOUNTING SOLUTIONS
3 7 Wa r r e n S t r e e t , L o n d o n , W 1 T 6 A D • t e l e p h o n e : + 4 4 ( 0 ) 2 0 7 - 3 2 8 7 - 4 0 9 6 • e m a i l : i n f o @ a q i l l a . c o m • w w w, a q i l l a . c o m
Web Based Accounting Solutions
Overview The traditional model for buying accounting software was to pay an upfront licence fee and then ongoing maintenance or upgrade charges. This often involved a large initial capital outlay – both in terms of purchasing the software itself and the hardware to run it. As software has became more complex, it also means companies require specialists in particular software to configure, manage and offer support on an on-going basis. In the past decade, however, accounting software has changed and there are now a range of options available to meet all companies’ needs on-demand. These “Software-as-a-Service” (SaaS) applications allow businesses to use the latest software developed on a subscription basis, removing the need for upfront capital investment in terms of hardware and software, as well as upgrade costs. It also means that businesses, no matter what their size, no longer need to manage and support accounting applications in-house, as that is taken care of by the company supplying the service. This white paper, the second in the Aqilla Advisory series, examines some of the myths associated with using web-based accounting software and provides a checklist of things to consider when looking at this type of application. Making The Change Not everyone is comfortable with change, yet it’s a constant of modern business – particularly when it comes to technology. Whether it’s as a result of new regulatory requirements or improved efficiency, companies are continually looking at the latest technologies and how they can help them. Recent economic conditions also mean that many businesses have to deliver increased productivity with fewer resources. The adoption of SaaS solutions is one way in which a business can become more effective, improve efficiency and save money. However, businesses need to select the correct application for their needs and ensure they are working with a reputable vendor.
Good for you
Good for the environment
Good for business
Clive Longbottom, Service Director, Business Process Analysis, at Quocirca recently commented that, “Web-based applications are changing the way people think about software – right across the business, from the IT team up to the board – because they give companies of all sizes access to the very latest applications for a fixed monthly charge, without the need for upfront investment and the headache and cost of ongoing management and maintenance.” The most critical decision for any company looking at SaaS is choosing the right supplier, so it is essential to do detailed research. Look for a company that understands the market, with a proven track record and heritage, not only in accounting software, but also in web-based technologies.
We b B a s e d A c c o u n t i n g!
w w w. a q i l l a . c o m
1
Things to consider include: • What is the pedigree of the company, or the solution? • Does the supplier understand your market and business? • Are there any case studies of businesses similar to yours available? • What scope of functionality is available? • Does the solution exhibit an appropriate level of effective fiduciary behaviour e.g. double entry and proper treatment of debit and credit events, journal control, and period?
What are the perceived risks of SaaS?
Research has shown that executives trust existing internal systems over SaaS or web-based systems by a ratio of five to one, mainly due to fears around perceived security threats and the loss of control of data and systems. However, many of those fears are unfounded – and here we dispel the five most common myths surrounding SaaS. Myth 1 – SaaS is less reliable and less secure than on-premises applications SaaS vendors understand that security is one of the key considerations for businesses and have all developed policies and infrastructure to safeguard clients’ data. They are dedicated to developing and delivering the application, and provide a level of resilience and security well beyond the majority of in-house systems – these include guaranteed levels of availability, daily remote backup, business continuity provision and also remote access, which means that data is not stored on laptops or desktops that could be lost or stolen. Myth 2 – With SaaS businesses lose control of data Clients can exercise complete control over their data by defining the right service level agreements – in the same way as customers’ money in the bank remains the customers’ money, data remains the property of the user. It is worth understanding where the data is stored, as it may be governed by different access and privacy laws. For example, in the United States of America, the Patriot Act permits law enforcement agencies to access the data if they consider it relevant to their investigations. If data is accessed in this manner, the data holder (likely to be a US-based vendor) is not allowed to tell the overseas data owner that their data has been accessed, even if the vendor is contractually bound to do so. Myth 3 – The technology is new and unproven Everyone who uses the internet uses SaaS in some form, most commonly with banking, tax submission (e.g. HMRC) and webmail applications, so it is certainly nothing new. In the business environment, SaaS has been used effectively for over a decade with applications like Customer Relationship Management (CRM), with vendors such as salesforce.com becoming a major player in the market. It was only a natural progression for other types of business applications, such as accounting, to move over to the web-based model.
We b B a s e d A c c o u n t i n g!
w w w. a q i l l a . c o m
2
Myth 4 – SaaS applications are less feature rich Web-based accounting applications tend to be easier to use than their on-premises cousins, but also provide advanced functionality beyond simple book-keeping. Users are presented with pervasive functionality giving everybody the information they need, on demand, anytime from anywhere. Using the right solution should allow for information to be easily shared both inside the organisation and externally with accountants and other trusted parties or suppliers. Myth 5 – The only real benefit of SaaS is cost savings Cost has often been considered as the major driver for businesses looking at web-based applications, however, these types of applications have a much wider range of benefits – including the flexibility to use them wherever there’s an internet connection, which means that people reduce their downtime and can work with colleagues even when they’re away from the office. According to latest research from Aqilla, the reality is that cost is no longer the only factor driving adoption of web-based applications. The majority of finance professionals see the ability to use applications anywhere and collaboration with colleagues as being more important. The research, conducted at a series of events held across the country by the Institute of Chartered Accountants in England and Wales (ICAEW), highlighted that more than three quarters (76 per cent) of respondents saw flexibility as a key benefit of web-based applications, with 52 per cent impressed by the ability to share information more effectively across the whole business. Surprisingly, less than one third (30 per cent) cited value for money as a reason to buy.
Web based accounting solutions free up time to allow a company to focus more readily on its core business (not its IT); react more quickly to market conditions; reduce costs; encourage collaboration; report quicker and improve efficiency. Modern design providing easy to use document centric and work-flow features makes it easy to use and easy to integrate with, being highly relevant in supporting the modern distributed (and often mobile) enterprise.
The SaaS Supplier Check-list: 10 questions to ask a prospective supplier
1. 2. 3. 4. 5. 6. 7. 8. 9. What is the company’s heritage/background? What security policies and infrastructure do they have in place? Where will my data stored – is it in a data centre? Is it on-shore in the UK? Are there any case studies or reference sites of similar companies available to me? What is the implementation process – how long does it generally take? Are there Service Level Guarantees for availability? What security policies and infrastructure do they have in place? What functionality is included in the standard product? What is the term of the contract?
10. What level of support do they provide, in terms of set-up and ongoing?
We b B a s e d A c c o u n t i n g!
w w w. a q i l l a . c o m
3
