Poor performance sours city on financial budgeting software vendor

System crashes, lost work and poor support have characterized the city of Vancouver, Wash.’s four-year relationship with SaaS CPM vendor Host Analytics.

The city of Vancouver, Wash., has been using on-demand financial budgeting software from SaaS CPM vendor Host Analytics since 2006. And for Natasha Ramras, the city’s budgeting and planning manager, that’s just about long enough.

“It’s not as flexible as we’d like it to be,” Ramras said in a recent interview. “I’m not very happy with it.”

Among Ramras’ chief complaints with Host Analytics is the platform’s lack of stability. Even just a handful of users trying to access the Web-based software concurrently can bring the system down, she said. That is, when it even works in the first place.

“You have to catch it on the right day and hope it doesn’t crash,” she said, noting that on some days, users can’t even log in.

If you're a problem account -- you can't support customers like that.

Jim Eberlin, Founder and Chief Customer Officer, Host Analytics

When the system is working, it has on more than one occasion failed to save salary and benefits data that city workers entered manually, wasting hours of effort and creating “headaches” for staff, according to Ramras.

Host Analytics’ support services have proven just as disappointing. When the city began using the on-demand software four years ago, Ramras could contact the vendor’s India-based support team directly, she said. But a couple of years ago, Host Analytics assigned Vancouver a “customer representative” to facilitate support calls.

With the customer rep now serving as a middleman between her staff and the vendor’s support staff, it often takes “days and days and days” to get a response to a support call, Ramras said.

“Things just don’t get done,” she said. “They are not very responsive to requests.”

As a result, finishing the city’s biennial budget has taken significantly more work and time than it would have done if Ramras and her staff had better financial budgeting software, she said.

Vancouver operates on a biennial budget, with a significant part of its $1 billion budget going to personnel costs. The city employs around 1,200 workers, many of whom belong to unions with specific pay grades and benefits rules that must be accounted for in the budget, Ramras said.

SLAs key to SaaS CPM success
The city’s performance problems with Host Analytics’ on-demand financial budgeting software illustrate some of the potential downsides of SaaS CPM.

While on-demand software requires no hardware investments or large upfront payments, customers are at the mercy of the vendors when it comes to uptime and platform stability.

And though most SaaS vendors, including Salesforce.com, include upgrades as part of the subscription price, not all do.

To avoid downtime with SaaS applications, analysts suggest potential customers hammer out clear service level agreements (SLAs) with on-demand vendors with specific penalties for the vendor if they are not met. 

This is easier with some vendors than others. SaaS CRM vendor RightNow, for example, offers customers an SLA that says the vendor will refund a percentage of the customer’s subscription fee should uptime requirements not be met.

Companies considering SaaS applications should also ask the vendor whether future product upgrades are included in the subscription price or whether an additional payment – either a one-time payment or an increase in the subscription price – is required to move to the software’s new version.

Of course, the savings associated with a successful SaaS CPM deployment can be considerable.

A recent report by Hurwitz & Associates, for example, compared the total cost of ownership of a hypothetical on-premise CPM deployment over four years with that of four years of using on-demand CPM software from SaaS vendor Adaptive Planning. It found the TCO of the SaaS CPM deployment to be as much as 77% lower than the on-premise deployment.

And the city of Vancouver’s complaints notwithstanding, Host Analytics has received its share of praise from industry analysts. The vendor was placed in the niche players’ quadrant in Gartner’s most recent Magic Quadrant rankings of CPM vendors.

“Host Analytics covers most of the components in a CPM suite in a SaaS offering, which is unique for a vendor that is solely a SaaS provider,” Gartner analysts wrote in the report. Gartner cautioned, however, that “Host Analytics performs most of its implementations through its professional-services organizations and does not have a large service partner channel.”

Vancouver a “problem account”
When told of Vancouver’s issues with the on-demand budgeting software, Jim Eberlin, founder of Host Analytics and its chief customer officer, described the situation as an “anomaly” and the city as a “problem account.”

He said Vancouver is using an old version of Host Analytics’ budgeting software, which has led to most of the problems Ramras described.

“They’re not willing to upgrade to the current, standard version,” Eberlin said. “If you’re a problem account” -- which he characterized as those customers that are not using a vendor’s software as intended or refuse to upgrade when new versions become available -- “you can’t support customers like that.”

In order to meet its financial budgeting needs, he said, Vancouver would have to custom build their own software -- a costly process the city probably couldn’t afford -- as neither Host Analytics nor any other CPM vendor is likely to be able to accommodate them.

“It’s not true CPM, what they want to do,” Eberlin said. Referring to Host Analytics’ relationship with Vancouver, he added, “Sometimes, you’ve got to move on.”

On that, at least, Ramras and Eberlin agree.

Ramras said she plans to begin the search for a new financial budgeting software vendor soon and hopes to have something in place before the next budget season. She will most likely evaluate Oracle’s financial budgeting module, among others, as most of the city’s financial data resides in Oracle databases.

Still, Vancouver is currently paying $12,000 per year in maintenance fees to Host Analytics, and Ramras said she expected more in return.

“It’s been pretty miserable,” she said.

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