Why “software as a service” is going to dominate the next several years in information management.
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Saas is the acronym for software as a service. It is usually used to describe deliverance of software via the internet to the end users eliminating any need for applications or servers managed locally. Software is only delivered as a service not through a CD or any other media disc to be loaded in any one’s computer. This service is paid for through a subscription service and is not always located or installed in the computer. Since Saas came into being, it has broken barriers to its acceptance and yet it is more considered to the traditional hosting options. The more stunning instance is the people’s unwillingness to take up the traditional on-premise deployment. This has been proven by studies and surveys carried by different IT companies showing that, in the few years back, 90% of the respondents were willing to deploy these traditional on-premise deployments but today it has declined and is pegged at 56%. This paper discusses why Saas will dominate IT management in future (Creese, 2010).
Based to studies carried out, the willingness for Saas consideration grows as the company’s size grow. The highest willingness for this ‘software as a service’ consideration lies with the large enterprises, which are also always the least to take on the traditional deployments. So as the main aim of every premise is to grow and expand, Saas will see itself on a high demand as many companies are sprouting up. Also those with most advanced and successful ERP implementations are mostly considering Saas deployments. According to Mint Jutras, a world class implementation of ERP is at 15% based on the results as from when these ERP were implemented. Most of the progress is on the company wanting to achieve the company’s specific goals and also the current universal metrics performance like complete percentage delivery along with customer retention. Those companies with world class ERP implementations are more willing to consider Saas deployment with more preference lying with the manufacturing sectors where the top performers are twice likely to add up Saas as a deployment option (Lisserman, 2010).
Despite the past unwillingness to consider SaaS ERP, the good thing of the SaaS equation in most cases extends beyond the evident advantages of outsourcing the maintenance and feeding of the hardware and the involved software.
(Lisserman, 2010) when for instance we consider cost, Saas deployment portrays a lower ownership cost and startup costs. A Chief Financial Officer from one small company deciding on the SaaS route about two years ago showed an estimated investment up-front in an on-premise solution accommodating eight users was $160,000. This amount was mainly for implementation services, and also included hardware and involved software. The real up-front cost for the chosen SaaS solution was less than $90,000 and allowed up to twenty-five users. Despite the fact that software and service costs and also pricing models always vary from solution to solution, this difference is atypical.
In fact 48% of survey respondents ascertained the lower cost of Information Technology staff as an the most advantage of a software as service (SaaS) solution. Many of the interviewed companies simply said that they don’t have the staff they felt are required to sufficiently support hardware, infrastructure and software, and hence are not interested in investing in the traditional resources.
Heavy customization required in these latest resources present the highest barrier to incorporation of this service. Most people also feel that they do not have the required resources for Saas ERP customization, but there are arguments which can be brought about to counter this.
This perception prevents most of the companies, in fact more than 27% of the interviewed to take up this solution.
First and for most, one should not think that they cannot customize a SaaS ERP solution. This is because, most recent ERP solutions are offering so many options to customize, configure and tailor solutions that users think of performing customizations, although they are normally not touching the codes or structuring barriers to potential upgrades. In addition, if the requirements truly require modification of the code, some (but not all) vendors, even those providing multi-tenant solutions, will always support customization. These Saas vendors will incorporate the customization into the typical invention, mostly with switches and settings that will efficiently either “hide” the changes away from other consumers or make them optional. Also they can offer the tailored solution in a single-tenant environment (Creese, 2010).
Nonetheless, while a lot of individuals or enterprises may think their businesses are unique (hence making customization a necessary option), a great deal of what they do can be quite comparable to any other business or at any rate similar to other businesses in that same industry. The obvious perceived differences frequently arise from the “we have always done it or we do it this way” mentality. More so, those supposedly unique business processes may always pre-date the accessibility of tools and know-how that can improve these processes Arthur, 2010).
However if one truly feels that they require these heavy customization, then they may take time to reevaluate their businesses to ascertain if they really possess the right software tools for the project being undertaken. Fit and functionality should always be the top priority for any company seeking to acquire an ERP for its operations. Also the ease of use should be of great consideration. These two aspects should go hand in hand for any company, and I believe that Saas solution has these aspects. Owing to this, even the one that is perceived as the best fit, if it does not easily navigated on, or does not allow one to work naturally, does not save one’s time and effort, then it will simply never get used to your overall business operations and will never produce quality and value required by any business (Lisserman, 2010).
Trying to balance the advantages and disadvantages of Saas ERP, the prons outweigh the cons and therefore Saas seems to dominate the information technology in future. It shows a great deal in cost savings, start up costs and information technology cost along with its hardware are substantially low. Although the cost of subscription seems to equal the software and maintenance cost in due course, there are sustained savings realized by not incurring the purchase cost and its maintenance. If you feel that you do not posses enough IT staff today, there is no need to acquire or hire some. On the other hand, if you got a good number of staff, let them engage in the most strategic activities in your business other than the day to day maintenance (Creese, 2010)..
Whether you opt to a multi-instance or multi-tenant, take time to evaluate the providers of the solution’s approach and carefully track records in terms of innovation deliverance. You should always look for those that update more frequently and also provide “opt in” enhancements. Moreover, do not engage yourself or your software into unwarranted and excess current customizations. Software configuration is a good undertaking but code modification and having to continue a routine maintenance of it is perceived not to be fair undertaking. If one feels the need to customize, he/she should be sure that they possess the right solution for the same.
If in any case you operate in a distributed atmosphere, you can put into consideration the advantages which can be brought about by Saas in terms of enterprise standardization and access provision to the remote employees in ensuring that remote sites are brought up quickly. Also, if you already have invested or intend to invest in other applications that will surround your ERP or already surrounding it, you must take into account the integration capabilities and requirements that come with the said solution.
Creese, Guy (18 May 2010). “SaaS vs. Software: The Release Cycle for SaaS Is Usually (Not Always) Faster”. Gartner blog. Gartner, Inc.
“Jumping to SaaS? Take Agile Software Development Along with You”. DevX.com. QuinStreet Inc. 8 January 2008.
Lisserman, Miroslaw (20 December 2010). “SaaS And The Everlasting Security Concerns”. Forrester Research.
Arthur, Charles (2010-12-14). “Google’s ChromeOS means losing control of the data, warns GNU founder Richard Stallman | Technology | guardian.co.uk”. Guardian.