Software as a Service (SaaS) is the latest method of hosting and operating a software system over the Internet. In comparison with the widely used term ASP (application service provider), SaaS is specifically created to be managed via the web, which enhances performance and allows for frequent updates to the software. According to CFO Magazine, SaaS may be the perfect solution for companies who do not want the hassle, cost, or regulatory problems involved with operating their own software system.
When a software system is hosted internally, there are a number of issues that can increase costs and decrease productivity. For example, hosting a system internally may require the purchase of additional servers, databases, and IT support. Additionally, IT staff would be forced to devote their time to maintaining the system and making manual updates, which may take their focus away from the core needs of the business. The time and expense needed to setup SaaS is significantly lower than traditional in-house IT implementation. The need for additional hardware or personnel can be reduced or eliminated, as the maintenance of the system is controlled by the vendor. Plus, software updates can be made as often as daily by the vendor, which takes the responsibility of maintaining the system off of IT.
Another benefit to SaaS is the added security provided by using the vendor’s data center. Data centers should be SAS 70 compliant, which helps to ensure all the necessary controls and safeguards are in place to protect business data. SAS 70 defines the professional standards used by a service auditor to assess internal controls of a service organization such as a hosted data center. The Sarbanes-Oxley Act increased the importance of SAS 70 by identifying it as the only acceptable method of checking the service controls at a service organization.
If an organization is experiencing rapid growth without adequate IT resources, or simply wants an efficient way to implement time and attendance software, SaaS may be a preferable solution to hosting the system internally.