Other than the fact that by the time I get to the word "service", half of the time I say "solution" instead of service, what about the viability of SAAS?
First, to levelset, SAAS refers to those set of solutions that are 'housed' offsite at the location of the vendor who actually developed the application. If a vendor is hosting all or most of a company's software, well beyond those applications which the vendor built, that is really an outsourcing relationship and falls under different rules. These 2 approaches are seldom compatible since the cost of applications to an outsourcing relationship is usually additive and efficiences are gained from having more applications at the outsourcer.
Back to SAAS, the 3 hallmarks or selling points are (1) no IT involvement, (2) pay-as-you-go with little upfront cost and (3) the vendor takes all responsibility for infrastructure and upgrades - those invasive and non-value-added activities. The perception of SAAS is lower costs, speed to market and no IT. Interest is growing across a range of applications at my clients and much of SAAS is designed to fit within a departmental budget.
Here are some rules of thumb for the consideration of SAAS solutions, BI or otherwise:
1. Check the value proposition of the application.
Of course, this applies to any application, SAAS or otherwise. However, it's worth mentioning that there should be some bottom-line business benefit at some level to actually doing the application in the first place.
2. Ensure scalability
I'm not referring to the expansion of disk, etc. That's assumed to be taken care of by the vendor. I'm referring to the ability to expand the core functionality of the application beyond the provided functionality, which becomes less interesting after the first 60 days.
3. Don't sabotage IT plans
IT may actually have a way to provide the business the functionality it needs at a lower cost and in a manner that is congruent with the direction of the core infrastructure of the company. Notice I say the functionality that the business needs - not exactly the functionality of the vendor product.
On the other hand, if IT wants the business, it should be continually performing top-down analysis of the technical environment and demonstrating progress towards the ability to support the business requirements. If there's no plan, the business is not sabotaging the plan, now are they?
At the end of the day, the general situation that SAAS seems to make the most sense is in an SMB shop when the data sources are somewhat standard (i.e., popular) and the data is not overly sensitive in an SMB shop. I am quite optimistic that SAAS will make numerous inroads in the coming years.
Posted May 21, 2008 8:18 AM
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