The Construction Software State of the Industry Report, produced by US-based firm Software Advice, is highlighting five trends (three of them upwards), relating to software buying habits, and suggests that the current recession makes Software-as-a-Service-based solutions even more attractive:
Software as a Service is in the right place at the right time
Software as a Service (SaaS) is gaining momentum in many software markets. In fact, we would agree with other IT prognosticators that SaaS is a major structural shift in software deployment and is here to stay. We’ve seen this model succeed in the project management segment where there is a clear need for the collaborative benefits of web-based software. Moreover, the current recession is making the SaaS model more attractive to contractors because:
- Subscription pricing can easily be added to a project’s general conditions;
- Low up-front costs allow project managers to avoid an onerous approval process; and,
- Faster and less expensive implementation makes the new systems more digestible.
We have not seen much demand for SaaS accounting, estimating or service management, although we do get asked about it now and then. We also have not seen many vendors emerge to deliver that sort of solution. We would not be surprised to see SaaS accounting and/or estimating solutions emerge over the next few years.
Having spent most of the past ten years focused on SaaS solutions for the architecture, engineering, construction (AEC) and property sectors, I have seen numerous analysts predict continued growth for SaaS, both generally (post) and for specific industries such as construction. The recession will certainly be a factor, and the emergence of numerous start-ups offering low-cost SaaS-based file-sharing – see post – is perhaps an indication of this trend.
(I feel a little uneasy about this sudden profusion of low-cost solutions. It reminds me of the days before the dot.com implosion when it was estimated there were over 200 suppliers of ‘project extranets’. Many of these soon disappeared, but the dot.com crash was a sobering reminder of the need for customers to make careful checks that providers have resilient hosting infrastructures, robust finances and appropriate contingency arrangements to help maintain services supporting what are often mission-critical construction projects. Good technology is not enough – you need confidence that a vendor will provide a reliable 24/7 service right through to hand-over of the project, and maybe beyond.)
Some of the established SaaS construction collaboration vendors are moving towards provision of richer levels of functionality to support parallel or back-office processes such as accounting (in the process, this also helps differentiate themselves from those offering basic file-sharing solutions). For example, German provider conject recently talked to me about its cash-flow planning module, and [my former employer] BIW Technologies has its own Financial Control application, offering integration with conventional back-office accounting systems.
Some SaaS collaboration providers (eg: Aconex, Incite, Asite, Business Collaborator) also offer APIs, potentially enabling customers and developers to build their own applications, integrate enterprise systems and/or access project data from other SaaS solutions, which might include accounting or even more fully-featured ERP platforms.
I personally use SaaSu for my own SME’s financial management, but am aware of SaaS accounting systems developed by vendors such as Business Collaborator’s parent Coda, plus Xero, Kashflow, MYOB, Intuit and Sage, among others. Some of these SaaS applications are still not fully-formed yet, but as they mature I expect cost-conscious construction company finance directors may well be tempted by some of the potential efficiency savings offered by secure hosting of their data ‘in the cloud’. Equally, perhaps we will see some of the more construction-oriented finance solutions (eg: COINS, Sage’s Timberline) available on a SaaS basis.