ERP System for a Software as a Service (SaaS) company
The pathbreaking SaaS revolution
The Software as a Service (SaaS) solution is a software product which can be purchased on a subscription or pay per use basis to run a business/organization/process or create something digitally. Customers are able to use it over the internet, through a web browser and/or a mobile application. The data and the application software are located in the SaaS provider’s data centre. This reduces setup and operation cost for the user and is available for use 24 X 7, 365 days a year.
Cisco’s Global Cloud Index 2016-2021 predicted that by the beginning of 2020, 59% of all cloud workflows will be on this model.
Around 64% of SMBs now depend on cloud-based SaaS to boost productivity and drive growth. IDC predicted that 60% of public cloud spending will be SaaS by 2020. It is predicted that over 70% of businesses will use SaaS applications starting 2020.
Top motivations for SaaS Deployment:
- Reduce time for IT service delivery
- Better response to market changes due to adaptability
- Easier business continuity
- Easier upgrading of services and support
- Reduce technology TCO
- Save Capital Expenditure on Infrastructure needs
- Eliminate Resource waste
- Have access to real time data for better decision making
- Faster ROI turnaround times
Key Challenges for a Software as a Service (SaaS) company
Although the SaaS model presents a pathbreaking business opportunity, it presents key business challenges unique to this segment:
1. Enterprise SaaS solutions such as traditional ERP software are out of reach for SMB SaaS companies. This forces them to use error and time heavy spreadsheets, manual work and standalone functional solutions. Automation of business operations is a critical element for business success.
2. Multiple standalone solutions don’t work since they can’t talk to each other and there is a critical need for a comprehensive solution that covers all business needs with automation and real time insights. Sadly, a lot of them are stuck with disparate and disconnected systems that operate without them.
3. There is a need for SaaS specific business software that integrates well with the main product, and automates all processes across entities, locations and business functions without any need for spreadsheets or manual work. These solutions must allow them to scale up or down with customization, flexibility and adaptability. Most SaaS providers have had to create a dovetailed strategy to make the best out of juggling many solutions that do not cater to their unique challenges.
A SaaS provider firm would need capabilities of multi-entity business software with different home currencies, as their business model is across different geographies. It would need automated financial consolidation, without using manual work or external spreadsheets. It would also need the capability of automated recurrent billing with tracking of dimensions like price, customers, software products etc. For this to make business sense, it must all be housed in one solution that is available all the time and on the go. Moreover, it needs to be capable, affordable, scalable, with low set up cost/time, easy to use and portable.
ERP System for a SaaS company
A SaaS company needs to cater to users in different geographies and an a la carte model of offerings with billing in different currencies. Billing is generally monthly based subscriptions based on use.
Most typically use their own solution that would manage the signup process, provide the server access and software tools based on user subscription, track the customer’s usage, and finally bill the customers. They then may pair it with ERP systems or other solutions in different geographies. The customer usage is generally manually transferred from their solution to the ERP/Accounting system which creates the invoice to be sent to the customer. Although financials for each company are created in the Accounting/ERP systems, a manual consolidated set of financials is also created in a spreadsheet for tax filings separately in the regions.
Traditional legacy ERP or private cloud business software would need to be hosted by a local cloud hosting provider – an additional cost of multiple times the software costs.
This approach doesn’t augur well for business efficiency and effectiveness. As time and cost pressures increase, process wastes are a huge stumbling block for business success. It is not feasible to manually create each invoice every month and manually email it to the customer and to create consolidated financials manually regularly. However, these are needed in real-time, any time on demand. Also, legacy ERP systems are not native to the internet and not designed to operate efficiently over the web. Juggling disparate standalone solutions is a business nightmare worth avoiding at any cost.
Legacy ERP systems are difficult to customize and require specialized coding capability and do not integrate well with SaaS offerings or other solutions. Moreover, it is very expensive and out of reach for most SMB SaaS players.
How the Versa Cloud ERP worked well for a SaaS Social Media Marketing(SMM) Software Company
One of our clients started a SaaS company providing marketers with the next generation of Social Media Marketing tools. The company has two subsidiaries – one in the USA and another in Canada. For her, scaling the business infrastructure was always a big worry. She knew manual processes were OK to start with however automation was necessary for growth.
She faced the same difficulties mentioned earlier that are generally felt by SaaS providers with traditional ERP systems. She was using the Sage 50 ERP systems deployed in the USA and Canada regions.
Remote access was required for the Sage systems, it had to be hosted by a local cloud hosting provider – an additional cost of almost 3 times the software cost.
She decided to try the multi-entity Versa Cloud ERP system. It allowed both subsidiaries to operate independently in their home currencies and supported financial consolidation in real-time, eliminating the manual creation of consolidated reports and once a month reporting.
Performance was found to be up to the mark as the Versa Cloud ERP system is based on modern cloud technologies with mobile access and operates natively in a browser without the need for access via Microsoft Remote Desktop or Citrix or special apps.
The deployment happened in phases. The focus of Phase 1 was consolidated financials; Phase 2 was focused on automating the delivery of invoices to customers via integrated email, as well as accepting online payments via integration with a credit card gateway; Phase 3 was focused on integrating the company’s proprietary Provisioning and Billing software with the Cloud ERP system so that the entire process of invoicing and getting paid could be seamless.
The Versa Cloud ERP solution cost less than half of what she was paying previously for Sage 50 subscription with no need for Citrix or for hosting services. The system and technology are constantly evolving, so it will never be out of date. The scalability of the product ensures that you will never grow out of it and it can be adapted to your needs as a growing company.
Here are some the critical functionalities of our ERP system that helped them in their domain:
- How to Setup and Configure New Account
- General Ledger Overview
- How to Create a New Bill
- Create Invoice and Receive Payment
- How to Create a New Report
- How to Run Reports
- Customizing Financial Reports
- You could watch a brief overview of the Versa Cloud ERP!