Or maybe the question should be is SaaS ready for you? I’ve been doing a bit of research on Software as a Service (SaaS) over the past week and there seem to be a number of key points that organizations need to understand if they are going to be successful with the service delivery approach. These are stream of consciousness, so hopefully they’ll be coherent outside my context!
I pulled together a number of questions that an organization should think about:
1) Do you know the functionality you want and does it exist in a SaaS offering?
Not everything that the market says can be delivered as a service that will meet your needs. Do you know the service levels (SLAs) that you need? Do you know your disaster recover requirements? One thing is for certain, if you don’t know what you need, you shouldn’t buy it as a SaaS until you do.
2) Are there policies or regulations that will prevent you consuming SaaS?
Will the security policies of the provider meet your needs? There are a number of requirements in some industries about the movement of information between organizations. These requirements needs to be well understood as part of the process of defining your needs. Security is a high priority concern for most service providers so you can be sure they’ve thought about it, but the phrase ”trust, but verify” comes to mind.
Is it OK that you don’t own the Intellectual Property?
Since you will be using a service provided by someone else, they will likely own the IP. Your competitors may end up using the same service. If you have grave concerns about this, it’s a red flag. The reason the SaaS approach should work is based on economies of scale. If you need a great deal of customization in order to use it, you’ve either picked the wrong service or are not a candidate. There should be little or no customization.
3) Do you require real-time, custom integration with enterprise systems?
Most SaaS solutions are not built to have real-time integration with other enterprise solutions, except through the standard service interfaces provided. The nice thing about SaaS solutions is that they should be build conforming to a SOA. If you require the service to be tightly integrated, the economy of scale is likely out-the-window.
4) Do you know what you’re going to do with your in-house support team?
Since a SaaS solution is provided as a service, there should be little need for an in-house team or the hardware they were using. Moving these folks on to something else will be part of the business plan, and it is going to have impact.
5) Do you view the functionality as core to the revenue generation of the company?
If the process differentiates your organization from the rest in your industry, you probably shouldn't go to SaaS. Unless you believe that the advantage of your process is short lived. As I mentioned earlier, the issue of IP ownership comes into play here as well as the SLAs to ensure that you’re protected.
6) Does your company have a preference for capital over operational expenditure?
Since SaaS is a service, it will be all expense.
7) Are you risk averse?
There will be a great deal of change and change always involves risk. If the company does not tolerate change, this could be a problem. Fortunately, the SaaS provider has done this before so they should be experts, and come with a plan.
Since leveraging existing functionality is the basis for the SaaS business model, one of the things that needs to be looked at closely is the reporting capabilities of the SaaS vendor. Make sure that those reports meet your needs. If it ends up that you need some kind of custom data warehouse to meet your reporting needs, I’d have the concerns about integration expressed earlier.
Related to these issues is how your company works with partners. Since this is a strategic relationship, the SaaS partner will need to be worked with closely. Don't assume that they know what your needs are or that they are going to go in the direction you need. There needs to be communications, like never before.
If SaaS is not right for you, there remain numerous options available to address costs, but that’s a whole other subject.