Computerworld does a great job of talking with a Software as a Service (SaaS) expert from Saugatuck Technology Inc and the things that all enterprises need to be thinking about when looking and deploying SaaS solutions.
On a daily basis, Knowledge Infusion is working with clients to help them understand this evolving market and what organizations need to be thinking about before entering and during deployment of these types of solutions. The nine things that this article highlights and some Knowledge Infusion comments are:
What is Saas? - Read this carefully and do not let vendors try to confuse OnDemand or ASP with Software as a Service. Organizations such as Workday and SuccessFactors to name a few are doing this right today in the human capital management and talent management markets.
What about security? - Take time to really understand how secure your data is. The vendors in this space make your data much more secure in their world then it would be stored at your site.
How do SaaS vendors charge?- This is very important to take time to understand, especially in the HR space. Many people have said to us, "The software would be more than what we paid for PeopleSoft or SAP!!". The thing they are forgetting is how much they have paid in the past for support. You have to look at this as a TCO argument.
What kinds of services do SaaS vendors provide? - Once again, very important to understand in this space. If you are used to x level support from your ERP provider, you are going to get Y level support from the SaaS vendor. Not necessarily good or bad, just different. You are also not implementing, but deploying which changes the types of support and services you need as well.
Is SaaS only for small and medium businesses or will it work in our enterprise? - SaaS solutions are proving with the right planning upfront to work in any size enterprise. The PLANNING piece is critical. You have to look at your processes and understand how the SaaS vendors solution fits into your enterprise process flow.
How mature are SaaS services? - Not very mature and rapidly growing up. Depends on the vendor and talk to references.
How mature is the SaaS market? - See response to number 6
Is SaaS more than a flash in the pan? - We believe this is the right solution for many organizations, not all, but many and depending on factors such as, may be the future for your organization with PLANNING.
What is your ERP?
What is your BI strategy?
What is your global strategy?
What involvement should the service users have with the vendor once contract is signed? - ALOT. This market is in constant BETA mode and things that you need in your solution are being added daily. Your feedback is so important and it is important to give it early and often.
It is a very exciting time in this space as vendors continue to shift towards this model. We will continue to see talent management vendors such as Taleo, Vurv, Authoria, Plateau, Saba, SumTotal, Halogen, Cornerstone OnDemand, Workscape and others continue to enhance or deploy their SaaS solutions over the next 12 months. Also, dont be suprised to see Oracle, SAP and Lawson continue to get MUCH better in this space. Learn about the market now, stay tuned - much more to come!!
Another infusion of knowledge...
PLEASE COMMENT BELOW!!
Jason,
Good post on SaaS. Once we cut through the marketing buzz/hype, customers need to truly understand the business model/value of SaaS....specifically:
Implementation - different model from on-premise solution, in that the code being changed to accomodate your business is changing the baseline code for everyone. The skills required to do this are complex and challenging....this presents a challenge to the SaaS vendors fron a scale and support point of view, you can only ramp up new developers so fast. What happens down the road if/when the vendor is people challenged when you are making changes to your business?
Availability - for some processes, sales force automation/performance reviews, it's ok if the system is not available do to a catastrophy. Not being able to process payroll because you don't have internet access, or being able to close your ledger is a whole different issue....in times of crisis, getting paid and running the books is very important.
Cost - once you factor all the costs, SaaS is not a lower cost option compared to on-premise solution....time will flush this out to those who are sciptical....just one persons opinion.
It is an exciting time to be in the HR business process area, and I love the innovation the SaaS vendors are accelerating in the space....having said that, I'd like to pose a question: what is so different about SaaS from ASP a few years back? what is really new and different? Yes, some of the technology has evolved (no more VAX/punch cards,now we have AJAX, Flex, SOA) but the business value?
When I read the wikipidia definition for SaaS, things are no less clear to me....finally, I thought that SaaS was going to be driven by mass viral user adooption, kind of like Facebook and Utube.....to that end, why do SaaS companies (SalesForce, SuccessFactors, Workday) have such large sales forces and spend so much of their revenue on marketing?
Thank you for a well composed posting on the topic and an opportunity to discuss.
Regards, Zeev.