Nonprofit organizations now have a wealth of choices when choosing cloud-based nonprofit accounting solutions.
What Are Cloud-Based Nonprofit Accounting Solutions
I’m referring to vertical market accounting systems designed specifically for nonprofits, not off-the-shelf applications that need countless work-arounds and endless ‘tricks’ to attempt to do nonprofit accounting.
All of these products are designed to meet the unique requirements of nonprofit accounting, but vary when it comes to functions, features, and equally important, their cost. Another important decision when choosing new software is the method of deployment. When selecting a new application, they can choose from older, traditional on-premises solutions, or newer cloud-based nonprofit accounting solutions.
We’re going to focus on the difference in the deployment of cloud-based products. There are two methods of using software in the cloud. One is the single-tenant hosted and multi-tenant SaaS (Software as a Service). In the single-tenant hosted solution, the application is housed on a server but the software is unique for each customer. Which means if there are one hundred hosted customers, there are one hundred separate installations of the application. Whereas, in a multi-tenant SaaS environment, there is a single version of the software for all its users.
Multi-Tenant SaaS Solution
In a multi-tenant environment, even though all users of the software access the same foundational components, the data and configurations that are specific to a customer are stored in separate and secure folders. All users have access to all of the capabilities of hardware and software, but their data aren’t shared.
When comparing the different software deployment options and the economics for the end users, multi-tenant SaaS solutions often have substantial advantages over the single-tenant hosted solutions.
In a multi-tenant environment, applications are more scalable, resulting in lower costs for the end user. With a hosted solution, vendors must build out their data center to accommodate new customers. In a multi-tenant environment, new users get access to the same basic software, so scaling has far fewer infrastructure and maintenance implications for vendors.
In a multi-tenant installation, it is easier to maximize the performance of the different elements in the technology, so optimum speed and reliability can be ensured at all times. Plus, ongoing maintenance and updates are typically included in the cost of the SaaS subscription, so end users don’t need to pay costly maintenance fees in order to keep their software up to date. When there is a an update or upgrade, the vendor only has one installation of the software, compared to multiple installations in a hosted environment.
Single-Tenant Hosted Solution
In a single-tenant environment, if there is a service disruption, it may affect only one customer, meaning that the vendor might be slow to respond and fail to take the necessary steps to ensure the problem doesn’t recur. In contrast, with a multi-tenant solution, a slight glitch could affect all of a vendor’s customers. It is, therefore, imperative that SaaS vendors invest significant amounts of money and effort into ensuring uptime, continuity, and performance. Having to monitor and administer just one platform, instead of managing different sets of installations for each client, a multi-tenant SaaS provider can deliver more efficient and effective service and support, including troubleshooting and problem resolution. This translates to a more reliable solution for the end user.
When comparing new financial software for your nonprofit, you need to compare more than functions and features. You also need to evaluate the underlying economics of different deployment options and choose the solutions that deliver the best value over the long haul.
For a nonprofit organization seeking a reliable, low cost delivery method for their software applications, a SaaS multi-tenant solution will have lower IT costs than a single-tenant hosted solution and can scale over time.