Financial Software in the Cloud

RSS

A pair of software-as-a-service (SaaS) providers is riding the growing movement of financial management software to the cloud as quickly as they can. Intacct announced strong growth in 2009 despite a generally poor economy. Xero (pronounced zero), a New Zealand-based company, is targeting small businesses, including businesses with as few as three people, for as little as $19 per month.

Traditionally, financial management software was licensed and deployed on-premises. Packages from companies like Peachtree or Oracle were feature-rich, big, and costly, and required a dedicated server. Beyond the acquisition cost, the software was costly to support and maintain. In addition, sharing information among users was cumbersome.

SaaS and the cloud change the nature of financial management software. Rather than acquiring, implementing, and accessing a heavy-footprint software package on-premises, users log on to their cloud-based financial system with just a browser. The application and the data reside at the cloud provider.

Saugatech Research, in a recent report titled "Cloud Financials Come of Age," points out the gap that is growing between the need for financial information and the ability of organizations to deliver it with conventional financial systems. In its survey, for example, respondents reported significant shortcomings in the areas of providing financial info to decision-makers, optimizing business processes, reducing process inefficiencies, and boosting ROI.

The researchers noted: “Financial information or the lack of it can impact the ability of a business to navigate: to make timely and effective decisions, optimize inefficient business processes, improve ROI and manage fraud and risk.” Tough as these challenges are, the researchers concluded: “it is especially difficult to overcome them when your legacy financial systems no longer meet your needs.”

The solution, according to Saugatech, is SaaS financials, especially cloud-based SaaS financials. “SaaS is considerably more than software – it is a business service, providing the software and managing it for the customer.”

What it frees the finance department from is even more appealing: no software to install, maintain, patch, or upgrade; no server to acquire, deploy, and support. SaaS providers also handle infrastructure services like storage, database management, disaster recovery, and backup services.

Of course, a big concern about SaaS and the cloud remains security. SaaS vendors are attuned to this and respond with authentication, identity, and authorization management services as well as production and activity monitoring. Cloud computing certainly has vulnerabilities, but don't think your on-premises financial systems are immune to hacks, viruses, and other threats.

But it is the pricing that generally clinches the SaaS financials sale. A midsize company would pay about $400 per month for Intacct. The company also has a deal with the American Institute of Certified Public Accountants (AICPA) that gets a steep discount for its member CPAs.

Xero is even cheaper, $19-$39 per month, per company, no contract, no upfront fee. And customers report (see Twitter comments) that they receive a one-month free trial. Here is the Twitter link.

With this kind of pricing, it is not surprising that SaaS financial products are growing despite the weak economy. The SaaS directory (SaaS Showplace) lists dozens of financial/accounting SaaS offerings. See if your favorite is there. ###

Discuss this Blog Entry 0

Post new comment
or to use your Business Finance ID
What's wiredFINANCE?

wiredFINANCE provides the Business Finance community with reporting and commentary on IT-finance related issues.

Blog Archive