Is SaaS software good for small startups?

Jane Levin's Profile

We are looking for something more scalable and global than Quickbooks, but we are small (sub 50 employees) and I don't think I want to take a $50K+ proposal to my CEO for a system we currently pay ~$1k/year for (QB). Are there inexpensive SaaS solutions out there and what do they run on a per user per month basis? Thanks!

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Hi Jane,

Without knowing a whole lot about your company and your ERP requirements; there are a number of cost effective SaaS solutions out on the market today. I've seen some solutions with a low start-up cost and a monthly subscription fee per user of around $150 per month per user. Make sure that you factor in technical support in your numbers as this is where a number of SaaS providers will get you.

As an example, I've provided a link below of a service provider that offers Microsoft Dynamics via cloud computing and the various modules that are included with their manufacturing package.

http://www.mygpcloud.com/Information/AM.aspx

Just keep in mind that as you go through the researh for a Saas service provider there are a number of pro's and con's with going this route and you need to decide whether or not the pro's (i.e., no additional hardware required) outweigh the con's (i.e., tied to the vendor's upgrade schedule) for your business.

Let me know if I can be of further assistance.

Good luck!!
Pete

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Jane,

Pete had a good idea.

Not sure which version QB you use.... But, also, do not overlook QuickBooks Enterprise v10 or v11. It is robust, great for remote or on-site entry and reporting. It now has off-site backup and technical support. Easy to access from anywhere.

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Proformative Advisor
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I agree with Peter's comments on pricing. I have used Intacct and NetSuite at clients and employers for many years.

The pricing for these system range from $150 to $250 per month per user, depending on your needs. You can manage costs by limiting the number of "full access users" as opposed to those who only need read only access.

I find that the key benefits of using a SAAS provider that has built their program from the ground up for the web (very important point) are the following:

1. Less upfront cost and no need to deal with annual maintenance fees (std. 20%)

2. Stability of system and no need to deal with upgrades, backups or reliance on servers/IT department

3. Ease of integration with other systems and ability to customize and flexibile reporting capabilities; again because they are optimized for the web. Also, you can easily have the software linked up with databases, websites, etc.

4. Minimal training costs - if you are an accountant, you can get it pretty quickly. You can limit the views of users to make it easier for the non-accountant types (e.g. dashboard, reporting only, etc.)

5. Little or no tech support costs - built into the monthly fee with software and/or 3rd party provider.

6. Scalability. On the surface, with a major SAAS ("cloud-based" system, it might feel overkill for a startup. However, getting a system in place at the get go, which can grow with you to several hundred million dollars, I my mind is the way to proceed. As you scale, you simply add the people and special modules that you need (e.g. multi-currency, global consolidation, etc.)

I don't mean to bash QuickBooks, but I have found over the years that the system (whatever version) becomes unstable after data builds within it and/or you have multiple users banging on it. Trading backup files is cumbersome and frought with errors/risks. Their online version is just not robust enough for any decent size company.

I'm happy to discuss specific experiences in more detail to whomever is interested, as you can see I am a strong advocate of SAAS. Thanks. -Paul

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I re-read the original posting, but don't have a clear view of what you need/want. More important, I have no idea what industry niche you're in or what the specific application needs are. I was once told "a problem well defined is half solved". I believe it.

Are you a manufacturer? Do you need Cost Accounting with incremental value added to the cost for labor and/or outside processes? Or are you just a retail distribution or POS application? Or do you need something else?

You say there's 50 employees, but just how many actually get to use the software directly each day and what do they do to/with the data? Does EVERYONE get a "seat" at the keyboard?

For the record, QB in any version IS NOT a good idea for a real fabricator or manufacturer. Even the 3rd party add-on Fishbowl packages are somewhat wanting in terms of Cost Accounting and and value added inventory accounting. Incidentally, most all systems "become unstable" as more data is input and more users added, particularly if there's loose disciplines as to the types and quality of input, and the education of the users.

There's no substitute for defining the processes for input, training the users and then following up to guarantee they're doing it right. No new system implementation is the "silver bullet" that ever solves user discipline issues. Anyone that tells you to do both concurrently is being paid hourly to "help you".

You need process documentation, training and discipline first, all the time and every day. Then you have a fighting chance of making a new system work.

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When it comes to multitenant or shared framework apps, like NetSuite, Intacct, and others... my concerns relate to the long-term usefulness for the smaller businesses. Small businesses, especially, are virtually guaranteed to make at least one additional software purchasing decision in the business lifecycle. Given this likely reality, investing the business and (more importantly) the data, in a proprietary or difficult to extract data format (and lacking the business logic once extracted) may not be the best direction. If information is power, losing the "intelligence" earned in the early years isn't helpful to the business. Once the organization is more mature - in terms of processes and operations, then a multitenant cloud app may make more sense. I'm a big fan of app hosting, because it is a "tweener" approach that helps businesses bridge their processes to cloud apps without having to lose the initial investments in software, training, data, etc. Make sense?
J

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I have spent over two decades working with Commercial Off The Shelf (COTS) software, as we once called it, ERP and business software, both on-site and hosted and SaaS -- as long as you understand what you need and what you will be getting at what price, you can do considerably well with a SaaS solution as a start-up.

Off-loading the IT hardware and software maintenance and the disaster/error recovery advantages of a cloud solution are powerful benefits. Just as COTS and ERP buyers did in the past, you need to control the urge to customize.

1.) Understand requirements (near and medium term); 2.) Understand what the market is really offering (not selling) today; 3.) Establish a business case and plan; and, 4.) Be ready to deal with a few points of compromise -- you can be focused better on delivering your business objectives the sooner you have your systems and related process in good order.

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I've seen the prior comments about SaaS and Cloud offerings, and depending on your business size, $150/user/month is not cheap in my opinion. That is $$1800 annually for a single user. At some point, the ROI doesn't make 100% sense vs a traditional software model (Granted that one might be able to negotiate a better deal).

As has been said, each case needs to be explored; and if it is a fit then it is a best choice, but to focus only on one technology is always myopic and fraught with dangers.

As for Quickbooks, it is not a panacea for all businesses. Granted it is low cost, but not all business run the way QB works, and depending on business model and transactional volume it can cause more harm than good.

See previous statement about myopia.

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Totally agree. I think most folks need to start with a needs assessment, and then look for solutions that meet your needs. This "my needs first" approach tends to weed out the marketing effect of shiny new platforms as well as tried and true. If a solution has what you need, based on your own internal assessment, that's a great place to start. If it doesn't, then whether it's big or small, SaaS or on-premise, doesn't matter at all.

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Try looking at kashoo and xero. We are using xero and loving it.

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Maybe the bigger question is "Is my company ready to go to the next level"? The bottom line, and this is true regardless of whether the system is cloud based or "traditional", is that your organization as a whole must be prepared to adopt to the new system. Today's systems are built (and for most, priced) to extend far beyond the finance department (hence the term "enterprise"). The other silos of the organization need to be on board and willing to change the way they do things in order to ensure the success of the new system and in the long run, benefit by the tools and information it will provide them with. If they are not, invest your time and money in other areas of the business.

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