If history has taught us anything, it’s that once word about a good idea gets out, everyone wants a piece of it. The U.S. gold rush of the mid 1800’s is a perfect example. All of the ingredients fell into place to make it an extraordinary time for budding entrepreneurs looking to make it rich. Gold was the commodity that was a saving grace for countless people that put everything on the line to transform their lives for the better.
In the enterprise world, software as a service (SaaS) is undoubtedly the gold rush of the 21st century. It’s touched nearly every industry and changed the way countless numbers of organizations do business. There is however, one stone in the SaaS gold rush that has yet to be truly unturned. In short, finance is the last SaaS frontier.
The benefits of SaaS are pretty straightforward–cost reduction, quick deployment, lower implementation risk and higher ROI. With SaaS, the barrier of technical expertise on the end user’s side is eliminated as well,
But as SaaS and the cloud make their way through nearly every corner of the enterprise, their potential has been realized incrementally. Their implementation is sporadic and often varied. It’s likely because these organizations are using SaaS solutions as a remedy for smaller issues in the world of information technology, leading to random and siloed occasions of the technology. In a nutshell, by failing to use SaaS to address the overall enterprise architecture companies are missing the big picture.
SaaS can be revolutionary for an organization, but not if it’s incrementally implemented and relegated to tasks that don’t tie to the overall business direction of a company.
The greatest impact of SaaS is seen when technology is both transformed for the better, and that transformation gives the enterprise the ability to gain insight that improves company performance. Typically those are areas that companies wrestle with every day because they are the areas that are fraught with frustration, undo complexity, and risk.
The first thing that comes to the mind of many enterprises when reading those descriptors is finance.
Many businesses are still relying on spreadsheets of data to make even their most important decisions, and statistics show that about 47 percent of small and medium sized enterprises doubt the data they’re using in metrics and performance indicators is accurate or up to date. Bad data leads to bad decisions, and the risk multiplies over time as companies scale and the stakes becoming higher. The chance for error-prone data in finance is simply unacceptable. The questions must be asked—Why would any enterprise want to base the future of its company on data collected from a process that is so archaic?
Why Finance Needs SaaS
Economic uncertainty, and the clock speed of business have continued to accelerate. The penalties associated with the risks of missteps have increased greatly and companies continue to struggle with planning for the future and anticipating alternate decisions depending on the potential business drivers in the economy.
The gating factor for company growth now revolves around better planning and performance management: driving fact-based decisions. Companies need to understand the financial implications of all key decisions, including both risk and reward, before they make a decision. They also need to learn how to be more agile in execution. This is where SaaS gives enterprises the advantage.
SaaS holds the promise of cost reduction, quick implementation and low maintenance. But its potential has been realized in steps more than in a full commitment to any larger shift in architecture. As business processes move higher up the company ladder, the next natural frontier for SaaS is finance. The technology was tailor-made for dynamic data such as that of finance, and decreases the skills gap found in most organization for “connecting the dots” to smarter business decisions.
SaaS for finance can take key planning processes to the cloud, establishing a single repository for up-to-date information and improving collaboration, reporting and performance across first a department and ultimately the entire enterprise. For that reason it is deservedly a frontier well worth exploring for any organization.
Financial tools in the pre-SaaS boom were a rare commodity for all but the largest organizations because of their prohibitive cost. With SaaS however, businesses of all sizes and all complexities can afford advanced tools that give greater insight into business decisions. Lower cost, faster implementation, easier upgrades and better ROI in the long haul are all of the technology’s key benefits. What the SaaS delivery method will be known for best however, is its capability to level the playing field for all businesses.
Author: Jon Kondo is president and CEO at Host Analytics, a leading provider of Software-as-a-Service (SaaS) based Corporate Performance Management (CPM) solutions. As CEO, he has led the company to record growth, partnerships, and industry accolades. Jon holds an MBA from Thunderbird School of Global Management and a BA in Business Economics from UC Santa Barbara.