On-demand offerings for small businesses now include software and systems for
bookkeeping and accounting, backup and data storage, customer relationship
management, email security, online spreadsheets, and more.
In a perfect world, deciding whether any of these are right for your business
would be a simple and straightforward process; the reality is more of a
As with any purchasing decision, the first step should be to identify and
document your needs. This doesn’t have to be an incredibly detailed list, but it
should define the scope of your requirements; in this respect, applications
accessed via the software as a service delivery model are no different to
applications sourced via the traditional route.
Your requirements are determined by myriad factors. These range from the type
of system you are considering (for example, CRM or email security), through the
software and systems your organisation already has in place, to issues such as
implementation and maintenance costs, ease of use, features, flexibility,
integration, and scalability. But if you want to find a system that meets your
needs, you must be clear about them.
Take bookkeeping and accounting. Do you want an entry-level cashbook or a
grown-up double entry system? Do you need stock handling or integrated payroll?
How extensive are your management and statutory reporting requirements? Do you
have any ‘special needs’? Not all systems are equally able to meet the
requirements of non-profit entities, for instance, or accommodate vertical
markets such as construction, recruitment and hospitality.
Accountants in practice also have some very specific needs. Some SaaS
products feature a control panel or dashboard to help you manage the accounting
systems of multiple clients; not all online offerings provide these facilities,
and those that do take various approaches. Practitioners will also need to think
more carefully about the feature sets, scalability and upgrade path of any
online accounting solution they select, to find a solution that can meet the
needs of a broad range of clients, or opt for more than one.
Beyond the many product-specific and industry-specific issues that must be
considered before and during the selection process, SaaS offerings also raise
concerns that do not arise with traditional ‘on-premise’ offerings. Most of
these relate to the safety and security of data, or the perceived lack of it, so
a risk assessment is essential even if it’s hard to pull off.
Availability is an issue too, while you are utilising a SaaS provider, and
when the time comes to move on. No service provider is going to guarantee 100%
availability, so think beyond the service level agreement to your options in the
event of system failure. A clear upgrade path is important too, so check on the
costs and procedures associated with porting your data to another system, should
you want to move on for any reason as you eventually will.
Got SaaS sussed?
If you have ever used Google or Yahoo! to look for information on the
internet you have experienced Software as a Service (SaaS). Instead of buying or
developing your own search engine, you took the ‘on-demand’ approach and
utilised a free application (that is funded by advertising).
Not all of the software and services offered in this way are free, but they do
share other strengths.
With SaaS you pay a monthly fee to ‘rent’ remote access to software
applications and data storage facilities.
Both of these are physically located on the servers of your service
providers, and can be accessed anytime, from anywhere, by anybody with the
SaaS implementation times are shorter than traditional ‘on-premise’
applications; if you’ve got a broadband connection and a PC with internet access
and a browser, you are off and running, so the up-front costs are lower too.
Because the service provider handles software maintenance, upgrades,
backups, and security, you don’t have to, saving time and reducing the need for
in-house IT expertise.
Essential due diligence
With SaaS, you put your business critical data and processes in the hands of
a third party provider, so privacy, safety and security are significant issues,
and you must be happy with:
- Backup procedures – you may want to supplement them with your own.
- Business continuity and disaster recovery plans – take nothing on trust.
- Compliance with data protection legislation – it’s your responsibility.
- Data security during transmission – is it encrypted?
- The physical location of data – if it’s overseas, does local legislation
- The physical and logical security at the data centre – and the backup site.
- The viability of the service provider – how financially robust are they?
- The service level agreement – check guarantees and penalties.
- Support – how is it provided and how well resourced is it?
Your exit options – one day, you will want (or need) to move on.
Due diligence is essential. Take references from the service provider, speak
to existing users, and do a proper risk analysis – the unthinkable can and does
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