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Thursday, August 3. 2006
SaaS: The Next Big Thing You Can't Ignore
Software-as-a-Service is already taking over the CRM business. How soon before finance and accounting apps follow?
What do CPAs REALLY want in business software? Join the study, get the results.
by Rick Telberg
For the Finance Executive
With more and more businesses moving to Web-based accounting and business software applications, accountants and financial managers have a choice: Get up to speed or get left behind.
It may be only two to three years before small- and mid-sized business' (SMB) demand for accounting online set-ups reaches a "meaningful" level, according to Sanjeev Aggarwal, senior SMB strategies analyst at the Yankee Group, technology market watchers.
What do CPAs REALLY want in business software? Join the study, get the results.
by Rick Telberg
For the Finance Executive
With more and more businesses moving to Web-based accounting and business software applications, accountants and financial managers have a choice: Get up to speed or get left behind.
It may be only two to three years before small- and mid-sized business' (SMB) demand for accounting online set-ups reaches a "meaningful" level, according to Sanjeev Aggarwal, senior SMB strategies analyst at the Yankee Group, technology market watchers.
Read it at the AICPA's website.
The buzz from "Software-as-a-Service," or SaaS, is almost deafening.
SaaS has already reached high levels of penetration in customer relationship management software, accounting for 30 percent of the CRM share in the middle market and about 14 percent in the SMB space, according to the Yankee Group.
Aggarwal adds that SMB accounting software vendors' online versions are already thriving: Intuit online has 60,000 customers and more than 200,000 users. NetSuite has 7,500 users, and the on-demand version of Sage Software's AccPac line has the highest growth of all of its delivery methods.
But note: There is a major distinction between Web-hosted applications, like Yahoo e-mail, and the full level of technology services provided via SaaS. In SaaS, the software company provides maintenance, daily technical operation and support.
CPAs not familiar with SaaS, beware. "If my accountant is using a different application than me and is not in tune with software as a service, I, as an SMB, would probably be inclined to go to another accountant," Aggarwal says. He believes that SaaS will soon become widely known for providing a superior return on investment.
He says that SMBs using accounting SaaS will save 60 percent in IT costs over four years compared to their costs for maintaining traditional desktop applications, including Web-hosted versions.
In SaaS arrangements, the vendor provides virtually all of the required technology: the application including all updates and patches, hosting servers, eliminating the need for in-office servers, as well as providing backups and other security services. SaaS also allows remotely located employees and accountants and other service providers to simultaneously view and work with a company's financial data in real-time.
The downsides are that some SMB managers may not be comfortable relinquishing so much control to vendors or may not favor widespread access to financial data. There also remains some inherent aversion to going all online.
Weighing those cons against the pros of wider and real-time data access and better ROI may be among the issues that CPAs will be helping SMB clients grapple with in the years ahead, if Yankee's bold SaaS projections become fact.
Aggarwal also notes that regulatory compliance is creeping up as a factor in SMBs' technology buying decisions, and could be another area where CPAs stand out as advisers.
CPAs should expect and look forward to helping their SMB clients decide about SaaS, according to Aggarwal.
"Outside CPAs strongly influence finance managers in choosing accounting applications or at least suggesting one or two applications that they prefer," he says, adding, "When accountants actually work on the same SaaS with the client, their influence could be even greater."
[First published by the AICPA]
SaaS has already reached high levels of penetration in customer relationship management software, accounting for 30 percent of the CRM share in the middle market and about 14 percent in the SMB space, according to the Yankee Group.
Aggarwal adds that SMB accounting software vendors' online versions are already thriving: Intuit online has 60,000 customers and more than 200,000 users. NetSuite has 7,500 users, and the on-demand version of Sage Software's AccPac line has the highest growth of all of its delivery methods.
But note: There is a major distinction between Web-hosted applications, like Yahoo e-mail, and the full level of technology services provided via SaaS. In SaaS, the software company provides maintenance, daily technical operation and support.
CPAs not familiar with SaaS, beware. "If my accountant is using a different application than me and is not in tune with software as a service, I, as an SMB, would probably be inclined to go to another accountant," Aggarwal says. He believes that SaaS will soon become widely known for providing a superior return on investment.
He says that SMBs using accounting SaaS will save 60 percent in IT costs over four years compared to their costs for maintaining traditional desktop applications, including Web-hosted versions.
In SaaS arrangements, the vendor provides virtually all of the required technology: the application including all updates and patches, hosting servers, eliminating the need for in-office servers, as well as providing backups and other security services. SaaS also allows remotely located employees and accountants and other service providers to simultaneously view and work with a company's financial data in real-time.
The downsides are that some SMB managers may not be comfortable relinquishing so much control to vendors or may not favor widespread access to financial data. There also remains some inherent aversion to going all online.
Weighing those cons against the pros of wider and real-time data access and better ROI may be among the issues that CPAs will be helping SMB clients grapple with in the years ahead, if Yankee's bold SaaS projections become fact.
Aggarwal also notes that regulatory compliance is creeping up as a factor in SMBs' technology buying decisions, and could be another area where CPAs stand out as advisers.
CPAs should expect and look forward to helping their SMB clients decide about SaaS, according to Aggarwal.
"Outside CPAs strongly influence finance managers in choosing accounting applications or at least suggesting one or two applications that they prefer," he says, adding, "When accountants actually work on the same SaaS with the client, their influence could be even greater."
[First published by the AICPA]
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