PayStream has recently learned of some interesting research from the SaaS provider, DataServ. Much of their material on the current market for financial process automation—specifically cloud-based technology—is in line with our own, and we consider them a valuable voice in today’s software industry. They also released a new ECM platform for AP, AR, and HR automation earlier this year, giving more creditability to their opinions on SaaS software.

The company recently touched on a topic that is very relevant among today’s businesses—SaaS vs. ERP-native applications. As the middle market opens up and companies’ software needs shift towards more affordability and versatility, there has been increased interest in cloud-base technology. However, there are still some doubts as to the accessibility and benefit of SaaS systems. DataServ says these “myths” are unfounded, and they work hard to debunk them.

One myth revolves around cost. While some consider increased internet connectivity and corresponding usage fees to be a hard sell, DataServ believes that this is not an accurate metric for comparing the SaaS price against that of an in-house system. A true total cost of ownership model will address the cost issue in a more holistic manner, and will help companies make a sound decision for their budget. PayStream agrees—focusing on one price-point of a system instead of the overall, long run cost will not give companies an accurate idea of the efficiency and optimization possible with the cloud.

Two other issues DataServ addressed were the complexity of managing multiple browsers used by a variety of SaaS providers, and data ownership, backup, and security. According to DataServ, success in these areas is more dependent on choosing the right SaaS provider rather than the efficiency of the platform. In the issue of data management especially, SaaS platforms offer plenty of tools to properly move and secure information through the system, ensuring accuracy and compliance in all processes. Whether web browsers or data are managed effectively depends largely on a companies’ collaboration with their provider, as well as the depth of their providers’ experience. Fortunately there are helpful guides to selecting the right service provider, many of them found in PayStream’s own research.

DataServ also points out that a compelling reason to use an SaaS platform for business processes is the fact that there are so many dynamic and successful services available. In contrast, many organizations are discovering that ERP’s native solutions are inaccessible and inflexible. Many times, companies can offset this immobility—and optimize their process—by leveraging 3^rd party, cloud based solutions.

How does a company decide which of their functions should be ERP driven and which might benefit from a non-ERP solution? According to DataServ, they should ask themselves the following questions to determine if they are ready to migrate:

• Is the function considered outside of your business’ core competency, and is it something that distinguishes your business from the competition?
• Do you find it difficult to find resources (money, IT, priority) to install the functionality you need?
• Do the enhancements deliver a positive ROI?

Businesses that decide to use the cloud for their back-office processes will gain the benefits of an overall enhanced experience. Many improvement are possible, including better collections performance on past due accounts, paper control in the payment process, and more business value through greater focus on core capabilities.

PayStream is impressed by DataServ’s knowledge in the field of cloud-based automation. We look forward to seeing what they have to offer the financial software industry in the years to come.

To learn more about the balance of cloud-based technology within existing ERPs, download PayStream’s latest research release, the 2014 P2P for SAP report.