Back office applications, like HR management and customer relationship management, are now available as services. If you are wondering if you should ditch your existing enterprise resource planning (ERP) system in favor of a SaaS solution, then you might want to consider these five factors before making a decision.
Is Your Back Office Application a Silo?
If you are using a financial system designed for accountants by accountants you may be left wanting a bit more than you are getting from your system. First and foremost, financial systems have to keep accurate and detailed information about accounting transactions.Many back office systems are designed to meet certain standards, such as the Generally Accepted Accounting Principles (GAAP), and keep you out of trouble with regards to regulations such as SarBox.These are constraints on the way financial systems work; if applications do not meet the standards, then they are not sufficient for many uses.
They do not, however, have to be limits on the features and functionality of your financial systems. For example, instead of just thinking of a sales transaction as a ledger entry, we can think of it as an interaction with a customer - one of many interactions that can be integrated with a wide variety of data to help you gain insights into your customers.
If you have the opportunity to replace a narrowly targeted back office application with SaaS functionality that supports more use cases, then you may be able to reduce the number of applications you support.Let’s look at one case in particular.
Will A Switch to SaaS Improve Business Intelligence?
Data warehouses and data marts are the foundations of many business analytics processes.We extract data from back office systems, integrate data from these sources into a single logical model of business operations, and then generate reports and support ad hoc analysis using those centralized repositories. It’s a fair bit of work, but the value of the information we extract outweighs the costs of producing it. Now we can ask ourselves if a SaaS service can provide some (although probably not all) of the functionality of our business intelligence infrastructure.
SaaS designers and developers have the advantage of building on years of experience that businesses have had with ERPs and data warehouses. We can all see the advantage of building systems that allow users to work with a consolidated service that can provide both transaction reporting (the kind required by GAAP) and business analytics reporting.A SaaS provider that can meet your transaction processing requirements while reducing the burden on your business intelligence operations can make an especially strong case for migrating from an in house silo back office application to a SaaS service.
Is Your Organization More Collaborative Than Your ERP?
One model for back office ERP applications starts with a hierarchical model of the organization. The CFO is at the top and has access to all the financial information. The staff in accounts receivable have access to the data and functionality they need but certainly would not have access to accounts payable information. This makes sense when your only consideration is preventing fraud and protecting the integrity of your financial data. Of course those are still the top driving requirements when it comes to financial systems but we often encounter use cases where we want to share data. For example, you may want your regional manager to have data about their sales staff and your sales staff may want details about their own transactions.
A SaaS provider may have a more flexible access control model that supports more collaboration without adversely affecting data integrity.
Dan SulivanDan Sullivan is an author, systems architect, and consultant with over 20 years of IT experience with engagements in systems architecture, enterprise security, advanced analytics and business intelligence. He has worked in a broad range of industries, including financial services, manufacturing, pharmaceuticals, software development, government, retail, gas and oil production, power generation, life sciences, and education. Dan has written 16 books and numerous articles and white papers about topics ranging from data warehousing, Cloud Computing and advanced analytics to security management, collaboration, and text mining.
See here for all of Dan's Tom's IT Pro articles.
(Shutterstock image credit: Digital Numbers)
Check Out These IT Videos