Beyond the Cloud
The benefits of single tenancy in treasury and risk management
Since the increasing availability of online applications for treasury has proven to be widely accepted in recent years, more and more vendors are delivering their products through SaaS. As discussed in last week’s Looking Behind the Cloud: Understanding the benefits of cloud infrastructure, there are typically two types of infrastructure that SaaS can be offered through, single and multi-tenant. Multi-tenant systems are designed to provide a single instance of an application that is made available to all users from various customers to access online. On the other hand, single-tenancy provides each customer their own instance of the application, and the supporting infrastructure is configured to meet the customer’s specifications. The decision to use one over the other will vary depending on which model will meet the needs of the customer, and the kind of service the vendor wants to provide. Although, there are different reasons for both environments, single-tenancy provides distinct advantages that will benefit the design of a treasury management system.
Multi-tenant systems tend to have limited flexibility because all customers are bound to the same instance of the software. In contrast, single-tenant models tend to be more flexible as they are able to offer individual customers the ability to customize the way the system is delivered and the security features which will be enabled. Even though a standard application is available, customers with high volumes of transactions can even opt for their own exclusive server environment with increased resources. With single-tenancy, modifications can be made for one customer’s infrastructure without impacting others.
Multi-tenant SaaS customers are more prone to threats because a security incident relevant to a single customer may expose not just one set of customer’s data, but all customers’ data. When data is shared between customers, it’s not just hackers you need to be concerned about: any new bugs introduced into the software may expose your data to another customer. In a multi-tenant environment, you may not be able to get a copy of your data to store in-house, and if you do get it, what good will it do without the vendor’s hosted solution? This makes it difficult for a customer to mitigate the risk of completely relying on the vendor to house their application and data. Think about a customer that wants to take extra precautions, in the case of a viral attack or even if the vendor were to cease to exist, the customer wouldn’t have access to their own data the way they would need to in order to maintain their business continuity.
Since each customer has their own instance of the application, customers have the benefit of choosing the best time to upgrade their system. The customer can work with the vendor to delay an upgrade cycle to accommodate the demands of the customer’s business. The customer’s workflow does not have to be disrupted. For example, in treasury, a maintenance upgrade can be scheduled to happen after a payment run.
In contrast, with multi-tenant solutions, it is difficult for vendors to isolate which customers are impacted by a service upgrade. Service disruptions affecting all customers may occur in the event that a vendor deploys a patch to fix a bug that was only affecting one set of customers.
Single-tenant SaaS models also allow customers the ability to migrate from a vendor-delivered SaaS environment to in-house systems – where the customer can manage their own data and IT resources. In today’s environment of growing regulations, especially in regards to financial data, having the flexibility to move data in-house is an option that should be considered.
Overall, with the increasing adoption of online applications for treasury management, single-tenant SaaS systems are a suitable choice for treasury management systems because they are more flexible and more robust. Since single-tenant systems provide each customer with their own instance of the application, customers will have higher security, better controls over when they receive upgrades, and choice of whether or not they may want to migrate to a more localized solution. Single-tenant systems provide organizations with a good solution to address the complexity of their treasury needs, and allow for mobility towards the changing demands of growth for any organization.
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