Imagine the day in the not too distant future when all that’s needed to set up an accountant’s office is a wireless router. Everyone has a laptop of their choice. Team members can log in and work from anywhere. There is no server, no backup requirements, no network to go down, no IT department or consultant.

This is the promise of ‘Software as a Service’ or ‘Cloud Computing’. ‘Cloud’ technology isn’t new. Remember the town clock? Instead of needing an expensive watch I could sit in my office and without even glancing up from my work I keep informed of the time by the sound of the clock chimes. There was no cost, no upkeep, no synchronising required; it was just there. The technology to run accounting applications from the ‘town clock’ of the ‘cloud’ has now come of age.

The internet has become a utility like electricity, phone or water. It’s available nearly everywhere via wireless broadband. I can tether my iPhone to my laptop virtually anywhere in NZ and access the internet – usually at high speed. When it’s not available there are programs like ‘Gears’ (by Google) which allow offline operation. 

But where is my data (and who can see it)?

Security has two aspects; can I lose my data and can someone else access and use it? With SaaS applications if a computer is broken or stolen you just change your passwords and get a new one; nothing is lost and no security is breached. If the SaaS supplier’s server fails they will likely have a parallel processor in place which will be up very quickly. All your data will likely be backed up in multiple locations. 

What about others seeing my data? The thought of remote data storage can often be a stumbling block for adoption of web-based services.  Sure your data is stored in multiple locations around the world; but within a database that is incoherent without the software; like giving someone a wheelie bin of shredded paper – maybe it’s all there if they had the patience to try to paste it together. In reality it would be much easier for a competitor to break into your office and steal your files than hack the database because your data is managed by companies whose only business is data security and who provide that service to some very high level clients.  So the SaaS suppliers themselves focus on a niche service without having to become all things to all people. Ironically using the ‘cloud’ allows these applications to be more focussed and the service to be more personal. 

High Tech / High Touch

Our philosophy and the philosophy of many SaaS vendors is ‘high tech/ high touch’. In 1982 John Naisbitt’s bestseller ‘Megatrends’ described the time when technology for its own sake would lose its appeal, but would instead become much more user focussed. Instead of dictating our lifestyles and hindering our relationships, technology would instead take its place as a discrete servant. Instead of the user adapting to the technology, the technology adapts to the user. SaaS is allowing this to happen.

International firm 37 Signals make SaaS Client Relationship Management and Project Collaboration applications. They also wrote Ruby on Rails; the development platform we use for Audit Assistant. Their attitude is typical of modern SaaS companies when they say: “We believe most software is too complex. Too many features, too many buttons, too much confusion. We build easy to use web-based products with elegant interfaces and thoughtful features. We’re focused on executing on the basics beautifully.”

This user-focus and responsiveness to client needs has a lot to do with the SaaS development process. The SaaS supplier is able to execute repairs and upgrades ‘on the fly’ without having to release a new CD or download. There is no versioning - improvement is continuous. With normal software the development time is prolonged because developers only get one shot at getting it right (a hugely expensive and/or unobtainable goal).

One of the main drivers for us moving our auditing software to a SaaS platform was this development flexibility; the other was the new Auditing Standards being released every few months. We just wouldn’t be able to keep up with a regular software delivery model.

Collaboration

Collaboration is the hallmark of SaaS. Rather than having to create software that tries to do too much resulting in compromises SaaS producers tend to be more ‘niche’ focussed and do one thing well. They then link with other SaaS vendors or products so their products ‘talk’ to each-other using an ‘Application Programming Interface’ (or API). 

We also try to collaborate as much as possible with our users. We see them not as customers so much as co-developers. The more they assist us to develop a better product the more effective their audit work will be. In turn we will make more sales which will free up more resources to improve the service - a win/win situation. 

SaaS also allows a previously undreamed of level of collaboration between the accountant and client. For example a page from our audit workbook (say an internal control checklist) is ‘shared’ with the client simply by entering their email address and a message to them asking them to complete the page. They receive an email with a ‘token’ that allows them temporary access to that page only. All their comments are tagged with their name and the date of their work. They may add attachments (say a PDF of their Procedures Manual or scanned copies of their minutes) and when they have completed their work we simply delete the ‘share’ message and their access is gone. 

Another huge benefit of SaaS is team collaboration. With online applications any number of staff can be working in the same job literally from anywhere in the world. In our application scanned letters, PDF’s, photographs, documents and spreadsheets may all be attached into the work-file and viewed by any authorised user. I recently received an email from a New Zealand user who happened to be in Sri Lanka reviewing work online as his staff were working back home. The paperless office dream has finally become highly practical. 

Support for SaaS applications is also vastly easier as the support person is able to see exactly what the user is seeing. So long as the user has a working browser they can use the software. Consequently support can be very responsive, and every support issue results in a fix or improvement for all users. 

Value for money

Finally, the cost model is very different with SaaS. The application can be released for use much quicker than conventional software so the capital investment is reduced significantly - savings passed on to the user. The application is paid for by subscription, not owned by the user. Like a full-maintenance lease on a vehicle, the responsibility for keeping the application running is all with the supplier and there is no middle-man. Some argue that long-term cost is higher, but to use the car analogy; repairs, downtime and inconvenience quickly diminish the attraction of an old purchased vehicle over a current leased one. 

Our story

Our experience in changing from a PC-based product to web-based has been interesting. Some users have immediately adopted the technology with enthusiasm and never looked back. These tend to be ‘Generation Y’; familiar with the technology through facebook and video games. At the other end of the scale are those who struggle with technology in general and avoid it where possible. They tend to be reluctant adopters already feeling overwhelmed by change. What they don’t understand is that the technology is actually getting simpler and more intuitive – it won’t bite! In the middle are those who see change as inevitable and are willing to see the benefits; lower overheads, work flexibility, consistency of work and outsourcing of data security to name a few.  

Summary

Does ‘cloud computing’ really have this silver lining? Will SaaS applications eventually become part of all we do in our offices? I would have to answer yes. There are compelling reasons to move this way. We already have the technology. The savings in internal network infrastructure are potentially huge as are the savings in capital software costs. Data security is actually more reliable in the ‘cloud’.  The applications are less complex. Collaboration among team-members and with clients is revolutionised. The enthusiasm of young people for the technology confirms that this is the way of the near future. You can’t turn back the clock.