SaaS or Cloud? Which Is Better?

Posted by Steve Berry

Jun 20, 2019 1:26:19 PM

Although the two terms are often used interchangeably, there is a big difference between software as a service and cloud. The difference is especially important for finance.

All software as a service (SaaS) solutions run in the cloud, but not all solutions that run in the cloud are SaaS. The difference has big implications for finance teams looking to work at peak efficiency, improve service to internal stakeholders, and ensure more compliant, secure software environments that align with business policies and objectives. With cloud alone, the cloud provider is not accountable for any of these three outcomes — it does not provide the application software nor does it manage the application on the finance team’s behalf. Those responsibilities then fall to the finance team itself and their internal IT partners — responsibilities that require a significant investment of time and a broad range of very meticulously performed tasks. Here are some notable examples:

  • Leveraging the application’s features for optimal outcomes
  • Applying the latest patches and feature updates appropriately
  • Tuning the application and surrounding infrastructure to work well together
  • Implementing a backup and restore policy that aligns with the organization
  • Performing near real-time monitoring of the environment plus application
  • Perform quarterly environmental health and compliance checks

Some of the areas included for real-time monitoring and quarterly checks would be:

  • Change requests — whether properly authorized and documented
  • User access requests — whether properly authorized and documented
  • Hyperion backup status
  • Security group changes
  • SQL Server native users and any changes
  • Administrators are alerted to errors (e.g., backup failures, log files)
  • And so on …

These are exactly the kinds of application management services that enable finance to run at peak efficiency, serve internal stakeholders well, and align financial systems optimally with the organization. However, most organizations do not have the required expertise or time to perform these tasks in-house — not if they expect finance and IT to do their “regular” work. Nor does hosting finance applications in the cloud remove this burden. Cloud vendors like Amazon, Google, and Microsoft will take responsibility for the stability, performance, and security of the server, storage, and operating system. But, again, they do not provide the application or application management services.

Get More Service with Your SaaS

The key word in this acronym is not “software,” but “service.” Service is what SaaS customers buy. But when customers only rent use of the software, most of the actual service is left up to them — including the application management services outlined above. SaaS minus service is really just cloud.

Here are five reasons to want more service with your SaaS, not less:

Accountability. The more players involved in the day-to-day health of your financial software environment, the more difficult it is to assign accountability for outcomes, good or bad. Solving issues happens much faster when there is just one provider to call and when that one provider has complete visibility to all the moving parts of which a modern financial system is comprised.

Ease of use. Having a single provider responsible for the whole environment also makes the environment easier to use. Since the service provider is an application expert, it is well positioned to help system administrators and end-users alike when they try to undertake what otherwise could be challenging tasks. These might include changing business rules, writing a more complicated report, and integrating several data sources.

Security. System administrators don’t have to be security experts themselves to ensure a secure system environment — for example, if the SaaS provider performs near real-time monitoring and quarterly health checks. Security policy violations such as undocumented user access requests and unauthorized security group changes can then be flagged and appropriate follow-up action taken.

Cost. Paying for things as a bundle almost always costs less than paying for the same things separately. When a single provider offers multiple services to the same customer it leverages economies of scale. It doesn’t have to do the same things over and over again (like learn customer contact information or business practices) for each service separately. It can then pass those cost savings on to the customer.

Best practices. A service provider that runs (and has run) thousands of financial software environments over many years should really know best practices — both technology related and finance related. Those best practices should be built in just as if they were a software feature. Furthermore, best practices often span multiple system components — such as how backups reflect both application and storage practices — so “Best Practices as a Service” should too.

Companies move their financial systems to the cloud for the same reason they buy SaaS — so they have more time and money left over to spend on adding value. The difference is that with SaaS they have much more of both. And that is definitely better.

Topics: Technology Insights, Backup and Recovery, Managed Services, Risk and Compliance, Finance Best Practices, Finance Operations