(sent while traveling - more details later)
The growth of SaaS-based ERP solutions is differing from the path so many other vendors chose decades ago in the on-premise world. Many older ERP solutions started first as financial software products (e.g., MSA, M&D, etc.) and then added payroll, HR, manufacturing and other modules. SaaS vendors, like NetSuite and Intacct, are blazing a different trail.
Several SaaS vendors appear to be building out financial accounting applications and then moving to applications that support service-based industries or firms with captive service groups within them. In recent years, NetSuite has added services functionality to their core product and then went and acquired PSA (professional services automation) vendors OpenAir and QuickArrow. (Of course, I know that other SaaS apps vendors are starting on the shop-floor side of the world. I immediately think of Plex and Rootstock in this space.)
Intacct’s announcement yesterday shows an unequivocal push into service industries, too. They’ve added a Project Accounting module to their financial accounting suite. They’ve also forged a strong alliance with Clarizen, a provider of project management/PSA solutions. This alliance is more than a marketing relationship. The two firms have integrated time and expense entry and service ticket functionality so that users do not have to perform redundant data entry. I used to hate keying project information (i.e., time and expenses) into the project accounting system at a client, then re-enter the information into my employer’s system and the client’s accounting solution. Afterwards, I’d spend a small eternity reconciling these data inputs as little errors or timing differences would screw things up. One source of entry and “the truth” is a clear buyer value in the services world. These new capabilities will be part of Intacct’s Summer 2010 release and should be available now.
It’s noteworthy to see the speed with which SaaS ERP vendors are delivering new applications vis-à-vis on-premise vendors. Those vendors with PaaS technologies (platform as a service) seem to create apps the fastest. I would speculate that services make a logical evolution path for these firms as the economy has continued to shift a little more towards services and less towards manufacturing. Also, service groups within firms are often underserved technically and yet remain large sources of operating profit for their firms.