Several vendors have mature SaaS TMS product offerings, some have delivered new versions and others are moving in that direction. If that is the general trend for vendors in the marketplace, should treasury organisations race to embrace SaaS? The answer may not be as clear as a simple ‘yes’ or ‘no’; there are several significant factors to consider.
What is SaaS? A pure SaaS system is built to capitalise on the advantages of the internet using a web browser-based interface to access a TMS connected to a common, centralised database that is shared by multiple clients. There are inherent advantages and disadvantages to this computing model.
The often discussed advantages of the SaaS product offerings stem from the fact that the software vendor takes responsibility for virtually all aspects of implementation and ongoing maintenance, including connectivity with third party applications, data backups, disaster recovery, software upgrades and patch releases. This model reduces, if not eliminates, the reliance on internal technology (IT) resources, which typically equates to a quicker time to market and lower startup costs.
Opinion varies, but two key often overlooked benefits are the ‘anywhere, anytime’ worldwide access and the value-added services clients can leverage via integrated partner networks of the SaaS vendors. In fact, these may be the hidden gems to convince reluctant adopters to seriously consider SaaS as a viable option for their treasury organisation.
The ability to transact business from smartphones, tablets and virtually any connected device provides intrinsic business continuity afforded by an instantly mobile workforce. For globally dispersed multinational treasury organisations, the need for only a web browser and internet connection enable easy roll out to the field locations and ensure standardisation for multiple sites scattered across the globe.
As vendors providing a truly SaaS model have attempted to identify additional opportunities to serve their clients and leverage the benefits that this shared resource model affords, the term Platform as a Service (PaaS) has evolved. The PaaS model is essentially taking the SaaS model to the next level by offering additional value added services leveraging the scalability and economies of scale provided by the SaaS architecture. For instance, SaaS vendors have the ability to leverage relationships with best-of-breed service providers to deliver enhanced functionality and integrate leading edge technology seamlessly for their clients.
Notable value added services provided by SaaS vendors include outsourced connectivity to banks for payments and reporting, sourcing and scrubbing of market data for risk management and accounting, integration with industry standard applications including trading portals and confirmation matching platforms, and development and maintenance of other third party interfaces. To the extent the services and third party partners the SaaS vendor provides are either existing or potentially future products that your firm would utilise, this can be a significant benefit not only in the required time to market but also in reduced future maintenance. Ultimately, the capacity for SaaS vendors to keep expanding partner networks will offer their clients future opportunities to maximize their initial investment with minimal additional capital.
Not Quite Perfect
While the SaaS model might seem like a panacea, there are certain situations when it may not be as desirable. Generally speaking, operating in the shared service model limits customisation options. To the extent the vendors meet the majority of your current – as well as anticipated future – needs this may not be a concern, but to the extent you have unique requirements the SaaS model may lack the flexibility to accommodate your needs.
First and foremost, you need to understand your organisation and how amenable management is to modify your processes to align to those innate in the chosen software application. Secondly, work with your IT team to understand internal policies on IT security such as network and data security. As the SaaS model has matured, concerns regarding housing sensitive data outside the company’s firewall have lessened, but this is still a deal breaker for certain organisations.
Thirdly, you should carefully review the partners the SaaS product is aligned with to ensure they can fully meet your needs and will not cause conflicts with existing relationships that may preclude you from leveraging these services. Finally, review your reporting requirements against canned reports available in the SaaS-based TMS products as they generally lack the ability to produce customised reporting. While several of the applications have roadmap projects to enhance their capabilities in this area, they are not currently on par with the majority of the non-SaaS products in the marketplace.
The SaaS model is very alluring to a number of corporates both large and small, but before choosing this path treasury needs to perform a thorough analysis of the organisation’s current and future state requirements, its culture as well as any IT security policies in place. To the extent that due diligence points to a strong functional and cultural fit, the SaaS model is a very attractive option for all the reasons previously mentioned. However, if it does not prove possible to check all the boxes it may be more desirable to go with a dedicated application service provider (ASP) environment hosted by the vendor or have the company’s technology team own the hosting. While this shifts more of the work onto treasury’s internal resources, the cost may be greatly outweighed by the benefit of ultimately having greater flexibility and control.
*Alysia Kennedy and George Werner also contributed to the article.
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