After having revolutionized social media tools and entering into the corporate environment through the marketing department (through CRM for example), SaaS is becoming one of the biggest drivers of change within the finance department. The last holdout against SaaS has fallen!
The widespread adoption of new security standards and controls (SOC1-2, as I discussed in my last post) can help explain why CFOs are more confident in SaaS solutions, and many have understood that “protecting [their] organization is paramount, but thinking [they] can only get exposed externally is naïve,” as Wendy Baum, EVP of Finance, NPD Group explained.
Banking, finance and insurance are becoming the industries that are the most interested in big data, as explained by Gartner in its report “Big Data Drives Rapid Changes in Infrastructure and $232 Billion in IT Spending Through 2016”, in particular in the graph on the right:
An overview of the potential benefits that SaaS solutions could bring includes:
SaaS brings a ready-to-use service
Before talking too much about the technology behind SaaS, I would like to remind you that SaaS is an “on-demand” service and not software that requires complex processes and technologies install. Just because financial professionals want to have better technology and tools, that doesn’t make them IT experts, and SaaS solutions bring them a service where the only things to manage are an internet connection and a web browser (versus : What is your operating system version? Do you have a compatible version of the hardware? etc.).
Moreover, thanks to the web services architecture, many big software brands promote the development of new tools built in their services (such as Amazon Web Services and Force.com), which make the exchange of data between platforms and the tools easier. After all, in a recent survey that we conducted of treasurers and CFOs, a third wanted SaaS solutions to reduce the amount ofoperational tasks they perform on a daily basis.
SaaS means continuous improvement and more tailored solutions
As Mark Zuckerberg explained, “We really listened to what our users wanted, both qualitatively listening to the words they say, and quantitatively looking at behavior that they take.” Indeed, product marketing has an endless source of customer insight, thanks to the large volume of data that SaaS enables companies to capture. These insights are not only what they are supposed to have done (as in data captured on surveys, etc.) but what they have really done. This could potentially allow SaaS vendors to better understand how customers use their solution (e.g. the unused functions, the redundant chains of actions) and identify ways to improve the usability of their tools.
The benefits of this continuous source of improvement are dramatically amplified by the capacity of SaaS solutions to be upgraded automatically, transparently and as much as is necessary to best fit to the needs and real uses of their clients.
This continual feedback is revolutionary for the product marketing department of the software vendors and it should help them to build a very intuitive financial service, fulfilling the needs of the 48 percent of the treasurers and CFOs that want SaaS technology to allow them to have better technology and tools.
Enter a real-time professional community
When you’re connected to your SaaS platform, you are working in a dedicated and private working space, but you are not completely alone when you face certain issues. SaaS offers you a real-time connection to a community of financial professionals, enabling you to share best-practice tips and to develop a peer-to-peer collaboration.
This ability can be enhanced by big data, and SaaS solutions can now automatically assist you by predicting what you may want to do – statistically speaking – or what information you are looking for. This is crowd-sourced knowledge building, and only a SaaS solution can offer this kind of innovation in a professional environment. This should answer the need of 24 percent of the treasurers and CFOs mentioned in our latest survey.
High analytical capacities
The finance department’s activities are mainly composed of data crunching and data management. The data can be in different kinds of documents (bills, bank statements, accounting) with quantitative and qualitative information. Finance departments are dealing with data and figures and they need to extract from these stacks of information the most relevant data, to visualize a trend or to choose between different scenarios.
These tasks were never easy and will become more and more complex due to the increase of the volume of data available. The stacks of information are becoming an avalanche of data, as referenced by Professor Thomas Fomby of Southern Methodist University, “Walmart uploads 20 million point-of-sale transactions to 500 parallel processing storage devices each day.”
This complexity could be seen as a difficulty but could also be seen as a real opportunity. Indeed, to build a true statistical analysis, we need a minimum volume of data describing an equivalent issue. Simulating different scenarios with different hypotheses can be a huge help to reduce the risk of making big mistakes!
All of this analysis is possible today thanks to the performance of the IT hardware, which could be available transparently. Moreover, this high performance availability lets us imagine new added-value functions which were not possible five years ago, like being able to analyze data on the fly to detect mistakes or fraud.