Technology thought leaders and pundits have been extolling the virtues of web-based applications for more than a decade, boldly proclaiming that the benefits to end users and software developers would completely change how we use the Internet and technology.
Many in the tax and accounting space were, as is their nature, skeptical, and more than a few were concerned about the security implications of client data being outside of the firm’s physical control. These were legitimate questions, of course, but professionals soon realized that their data was often safer in a secure and encrypted data facility than it was in their office, where fire, theft or natural disaster could wipe it out.
The result of this eventual, if reluctant, embrace of remote data tools is that in 2010 there are now web-based options for virtually every professional tax and accounting application. Likewise, while many professionals scoffed at the business value of social interactive sites, a few found ways to use Twitter, LinkedIn and Facebook to their advantage, and are now counseling their peers on how to achieve the same digital success.
Some Brief Definitions
The term SaaS is still not an automatically recognizable acronym by many professionals, even if they may be using it. Simply put, Software-as-a-Service is a different method for software companies to deliver their products, and a different way for professionals to use them. Instead of receiving a program CD or downloading system files and installing them on a computer or server, the programs are essentially installed on a secure server run by the software company, with professionals logging into the program either through a web browser or through a web-synched interface. For payment, instead of paying up front for the current version of the software, users essentially rent the programs, usually for a monthly fee based on the number of users.
Another acronym that’s been around for a couple of decades is ASP, or application service provider. It is a form of SaaS, but one through which traditional, non-web-based programs are offered through a secure hosted network.
Web 2.0 is a much more modern phenomenon, but with a less specific definition. Where basic (or Web 1.0) websites offer information, news and other resources, Web 2.0 sites offer some form of interactivity and collaboration. Facebook and Twitter are often pointed to as examples, but Web 2.0 extends to online banking, blogs, wikis, RSS feeds, GoogleDocs and many other personal and professional applications. They can also be tools, gadgets or widgets that are add-ons to an otherwise static website, creating a more dynamic and useful environment.
The SaaS model holds many benefits for both users and vendors. These usually include anytime/anywhere access, client collaboration tools, and relief from having to install the programs and keep up with updates, since all of this is handled on the back end by the software vendor. Firms can also ramp up very quickly, adding more users or system functions and modules, usually within a few minutes. For the technology vendors, there is no longer a need for shipping, printing and CD costs.
Chicago CPA Jody Padar says the benefits she gets the most value from come in the following order: Client collaboration, anytime/anywhere access, no IT headache, and the savings of her professional time.