FinTechSystemsASP and SaaS: Which Gets the Treasurer’s Vote?

ASP and SaaS: Which Gets the Treasurer’s Vote?

A significant change within the corporate treasury technology industry over recent years is the shift from installing and supporting treasury management systems (TMSs) in-house to the use of outsourced, hosted solutions. Installed solutions are most common among larger corporates with substantial in-house IT resources. Also, some organisations’ IT policy requires that sensitive financial functions are kept in-house, within the corporate firewall. There is a sharp divide between this approach and the accelerating trend towards outsourced solutions of ASP and SaaS.

Advocates of both solutions claim their preferred approach reduces treasury operational risk, on the one hand through complete in-house control of the entire operation, and on the other through delegating responsibility to expert outsiders. With increased acceptance of the robustness and security of web communications and cloud based technology, the cost and efficiency benefits of hosted solutions have fuelled the widening adoption of this approach.

ASP and SaaS are both technologists’ terms that provide little useful information for the non-technician and do not help treasurers evaluating new technology. The terms need demystifying, to support informed decision taking.

ASP Solutions

ASP treasury solutions have been around for some time. They are essentially technology hosting and management services, which eliminate most overheads of hosting, implementing and technically supporting a TMS. ASP services are typically paid for by monthly subscription fees and are contracted over a fixed term of several years. The fee typically covers software usage, licensing, maintenance and support. The implementation fee is charged on a one-off basis.

The ASP offering includes the cost of the hardware and sometimes the communications. The vendor usually provides a range of technical services, including database back-up, database administration, upgrade management and disaster management including recovery. The support provision can cover both technical and application issues. The ASP customer is usually responsible for implementation and upgrade issues, such as system configuration, upgrade testing and commissioning. In general, the technology load on treasury is significantly reduced.

Demand for ASP TMS delivery arose from dissatisfaction with the costs and quality of internal IT support in many companies and treasury departments. Often, this resulted from heavy workload demands imposed on thinly stretched and under-budgeted IT departments, and sometimes from the implicit acceptance of the concept that that treasury is a minor, non-core function with low priority when IT resources are assigned. In many cases, IT policy explicitly seeks the selection of outsourced, hosted solutions, driven by budgetary and risk control considerations.

ASP clients usually communicate with the hosted solution via the web, for data entry and reporting. Various technologies are used to accomplish this, reflecting the underlying nature of the TMS. This issue has relevance for the general development potential of the TMS, and in comparative solution evaluations, but does not really impact the day-to-day operation of the system.

Today, the use of ASP is especially indicated for those companies whose IT policy requires that single instance applications with separate databases must be used for finance operations. This is the defining difference between ASP and SaaS.

SaaS Solutions

SaaS solutions share many general technical aspects of ASP solutions. SaaS is often referred to as today’s technology of choice for corporate; especially for treasuries. It is seen as a cost-effective, secure way of deploying powerful and sophisticated treasury management functionality through the central sharing and management of resources. SaaS eliminated many of the barriers that previously restricted the benefits that corporates could derive from treasury technology.

Some SaaS systems can legitimately claim to be ‘pure SaaS’, if built using 100% web based development tools that take full advantage of web and cloud facilities. The benefit of this technology isn’t always obvious; but means that the system can maximise its use of up-to-date features to benefit performance and functional richness. It also means that superior developers will be attracted to work with the system.

True SaaS is said to be ‘multi-tenanted’, meaning that many users share access to a central database and system. The resulting economies of scale can be shared by supplier and clients. The tenants share usage of a central TMS and database, representing a vast resource of processing power and information storage. The TMS is the most up-to-date version of the system, which enables the latest functionality features to be available to the entire client network.

SaaS systems use cloud storage, which may be regarded as a private network of virtual servers. Responsibility for managing the underlying physical environment resides with the SaaS provider. The virtual character of the server environment enables the controlling technology to allocate and balance storage resources flexibly, optimise performance, and to help ensure that changing storage demands are met cost-effectively.

The SaaS supplier’s role includes monitoring and maintaining the database, so any problems are detected and fixed. It includes automated back-up and error recovery procedures, which include real time mirroring of the database and its location in multiple secure physical sites. Each SaaS client’s data is segregated to ensure the integrity of enquiry results and reports. This type of environment provides secure hosting for confidential treasury processes and reporting. Users can concentrate on treasury management, and may be unaware of many technology processes proceeding in the background.

The use of a single software application for tenants of a SaaS TMS can improve the quality of support service provision. The support team are trained in the functional details of the current release. Supporting a single release means that the team never has to restore or understand earlier versions of the software, enhancing responsiveness and service delivery quality.

The SaaS environment requires new releases of the system to be rolled out at one time to the entire TMS client base, which demands a high level of testing and quality assurance by the vendor. Users are freed from the burdens of upgrade commissioning of other environments. The impact on the level of operational risk for the treasury is debatable; outsourcing the necessary work is the key benefit.

Ease of upgrading a SaaS system is also reflected in accelerated initial implementation projects, as the technical environment is exclusively the vendor’s responsibility (as with ASP). The client can concentrate on data gathering and acceptance testing processes.

One potential disadvantage of SaaS is that users’ needs must be met by the core functionality of the operational version of the TMS. Individual user environments may be configured to fulfil clients’ specific interfacing, reporting and workflow needs, but it rules out arranging customised or bespoke versions of the system. SaaS vendors are under pressure to develop extensions to their system’s functionality set, so are most responsive to prioritising the most generic and marketable enhancements.


Vendors of SaaS and – to a large extent – ASP solutions are able to offer attractive support and system performance terms and conditions, because of their control and oversight of technical operations. This is valuable for prospective clients when negotiating service conditions, and it reflects reduced operational risk compared with other solutions.

Installed, ASP and SaaS solutions each have a role for different corporate environments. The SaaS approach’s cost effectiveness is reflected as a consequence of the centralised nature of the offering, with multiple users sharing substantial processing, development, storage and support resources – the key reason for its popularity.

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