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Online or On Premise?

The interesting thing about online solutions is that, although the lingo changes, the concept is not new. For the last 10 years evangelists of the “hosted” solution have been banging down doors trying to get people to believe that you are better off as a business if you don’t have your own IT infrastructure. The different acronyms that the concept has been given over the years from ASP (application service providers) to the current SaaS (software as a Service) are simply iterations of the same fundamental concept.

However, this time it’s different! Why?

We all know that internet speeds today are far better than they have ever been. Using the internet as a network is now feasible, whereas in the past you were required to invest in some serious communication links to make it operable.Is this the main reason for the rapid take up of online applications in recent years?

One key factor is that, for the first time, we as a population are becoming agnostic to where our information is located. Think about it, for most of us the most critical communication tool- email- is stored somewhere in the clouds… (probably with Google, Microsoft or another large technology company)… in a hosted environment. With more and more businesses choosing Google Apps & Zoho over traditional word processing applications we are again showing that convenience and cost are more important than where the data is located.

So, with todays business owners becoming more comfortable with the data being located “somewhere else”, online solutions are coming into their own.

Of course, we all know the story, and it is fair to say they have led the way in Online Enterprise business solutions. Larry Ellison and Netsuite are also pioneering the accounting space at the high end of the market. Xero, Saasu, Kashflow, Outright, FreshBooks to name just a few are the new generation of accounting solutions that are growing with such pace the market leading incumbents are scrambling to offer online solutions to protect their market share.

So my advice is to have a good look around. The advantages of taking your solution online are significant and include (my top 4):

  • Access from anywhere (home, holiday, office)
  • Your accountant & business advisors have access
  • You are not limited to a single platform (yeah for Mac users, finally you have options in what accounting software you can use)
  • You don’t have maintenance of upgrade issues

Now these are great reasons and really can free your business from the traditional challenges, however the real benefits of online solutions are yet to be realised. Why? Because the masses haven’t move yet.

What I mean by this is that imagine for a moment if Intuit or MYOB’s entire customer base were online… hundreds of thousands of businesses. Now imagine doing business with another user on the same online solution. Instead of having to exchange paper documents (invoices, orders etc…) you would simple swap “company numbers” and all the relevant documents could flow electronically, the time saving on data entry alone would be staggering. How is this possible? Because everyone is in the same system.

Also- imagine, as a small business, you are looking for a new supplier of stock and that if in the inventory module you could see all suppliers of the product you want that use the system. You could make an electronic request for purchase, price confirmation or an order all without having to physically send, call, or email! The supplier would be alerted in their system that they have a request, they could accept it and in an instant you could be transacting with a new business partner.

It is these types of features that will truly change the role the accounting system plays in the business, we are not there yet but it’s worth getting in early as the incremental improvements that these new generation vendors can make are stagging, and each increment could change the way you do business completely.