Zoli Erdos is taking issue with McKinsey over predictions unveiled at Software 2006. The report authors say:
Out of 34 application areas we have examined, only nine are unlikely to see some SaaS adoption over through 2008.
These are the sludgy green areas on the graphic. Included are financial applications and document/records management. If that’s true then I really am wasting my time. But I don’t think this is the whole story. As I said in comments at Zoli’s site: I’ve no idea how McKinsey comes to this conclusion but at first glance it appears as an example that smacks of siloed thinking. Accounting IS commoditised infrastructure. At that level there is no reason to consider it an on-premise jewel. Assuming that is what McKinsey means by financial apps.
One of the most common objections I hear to using a SaaS alternative for accounting centres around security and confidentiality. Neither of these arguments makes a lot of sense to me. First, we routinely outsource payroll – probably the most sensitive information about any business. Online banking is increasingly seen as routine. So what makes your debtors listing so precious as a piece of information that might become compromised? Second, we can secure data. That’s one reason why SaaS players make a big deal of their security models. To users it’s a feature that needs exploring. Third, most business decisions have a financial impact. Therefore, the more seamless the integration between financial apps and say CRM, the better. A mixed model where some apps are hosted and others are on-premise directly impacts the cost of implementing and maintaining the necessary links.
On document/records management I’m even more flummoxed. I can see how companies and accountants would view their records as highly confidential. But why, given there is already a push to retain documents in electronic only formats, would you not consider a SaaS alternative? If it is because of perceived security issues in the broader sense (e.g. what happens if they go out of business?), then SaaS could still serve as the ultimate backup. If it is a ‘not under my control’ argument, then I have to ask the question: Why does that matter? Is it your core business to be a guardian of information? I don’t think so.
Technorati Tags: accounting, Twinfield, Winweb
