Deployment options were hardly a consideration ten years ago. Most accounting solutions were licensed and hosted by a third party or deployed on your own premises. “SaaS” was a poorly understood and relatively new concept. “Cloud” was not even part of the business vernacular yet. Solutions like Customer Relationship Management (CRM) were heading in that direction, but entrusting your records to cloud-based accounting software required a higher level of trust that had not been developed yet.
Times have changed since then! Today, most businesses have some form of cloud strategy and licensing software as a service (SaaS) has begun in earnest. The surge towards the cloud seems to be unstoppable. As companies accept the inevitable, they stop looking at the alternatives with a critical and questioning eye. When cloud was far less popular, decision makers worked hard at analyzing the pros and cons and understanding all their options.
In their annual Enterprise Solution Study, Mint Jutras has been following perceptions and trends in cloud and SaaS. This table shows what appealed to the 464 participants about SaaS. For those already on SaaS solutions, they asked what benefits they had achieved by moving to SaaS. Participants were allowed to select all that applied.
Table 1: Anticipated versus Realized Benefits of SaaS. Source: Mint Jutras 2019 Enterprise Solution Study
The percentage of participants recognizing the various potential benefits increased yearly – until the last year in the study. Many businesses are hopping on the cloud bandwagon without fully understanding the benefits. As a result, some benefits are being left on the table.
- Cost considerations
- Growth and distributed environments
- Security, Risk, Business Continuity
Outlining Deployment Options
Non-technical ERP end users usually don’t know, care, or need to know which of these deployment options are being used to deliver the application and even less likely to care how it is paid for. It is important to understand the different options, especially if you want to maximize the benefits.
Let’s start by getting back to the most basic definition of cloud and SaaS. Many use these two terms interchangeably, but there are some important differences. So, let’s distinguish between the two:
- Cloud and cloud-based refers to access to computing, software, and storage of data over a network (generally the Internet.) You may have purchased a license for the software and installed it on your own computers or those owned and managed by another company, but your access is through the Internet and therefore through the “cloud,” whether private or public.
- SaaS is exactly what is implied by the acronym. Software is delivered only as a service. It is not delivered on a CD or other media to be loaded on your own (or a third party’s) computer. It is generally paid for on a subscription basis and does not reside on your computers at all.
All SaaS is cloud computing, but not all cloud computing is SaaS. Cloud delivers a lot of benefits... but SaaS delivers even more.
During the last few enterprise studies, the following options were used to categorize deployments:
- Software as a Service (SaaS): Software is delivered only as a service. It is not delivered on a CD or other media to be loaded on your own (or another party’s) computer
- Hosted and managed by your ERP vendor: Software is licensed by you, but you pay your ERP vendor to manage and maintain (host) hardware and software
- Hosted by an independent 3rd party: Software is licensed by you, but you pay another party to manage and maintain (host) hardware and software
- 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
Now that you have all the background information and definitions, we can explore the different types of benefits in the rest of the blog series. In the meantime, read more about how to use the only AICPA-endorsed cloud-based SaaS accounting software to collect your data, turn it into insights and intelligence, and become a strategic CFO in our latest eBook, "How You Can Transform Finance Into a Strategic Business Asset."