August 2009

Making the Leap to SaaS

Written by Tim Blair White

Any IT director is constantly challenged with building castles in the sky while keeping all existing systems operational.  At the chief executive level, those castles may seem little more than sand castles on the beach but more likely than not they are as formidable as a Scottish castle manned by the ladies from hell!

A recent chief executive request illustrates this point: “Every subscriber to our subscription research portal should have their own custom RSS feed which is based on their preferences; that should be easy.”  The castle looks small but dig into the sand and you encounter some rather significant infrastructure and resource barriers to overcome – thousands of custom feeds with their own unique SQL queries that are dynamically created.  Not impossible but you get the point.

Most IT departments pride themselves in being able to create or put together just about anything.  There is a joy of creating and developing that is intrinsic with software and hardware developers.  There comes a point, though, where developing and maintaining in-house does not make business sense.  Bluntly, it is just too expensive and costly in some situations.  Does the company wish to become a true software development house or concentrate on its core business strengths?

Making the leap to SaaS must solve business related IT problems and reduce costs over the long-term.  Therefore, when evaluating SaaS one needs to be somewhat detached from the “we can build anything” IT mentality and really focus on empowering the business with technology from any source.  The IT department is not there to build its own empire but to empower the business to achieve its objectives and be more profitable.

Evaluation points when considering a SaaS provider:

  • What business problem will the service solve?
  • Will it empower the business to achieve its objectives?
  • Will the service reduce costs over the long-term?
  • Is the service cheaper than building and maintaining in-house?
  • Will end-users actually use it?
  • Verify and confirm reliability and customer service (key point).
  • Will your senior IT staff get behind the project?
  • Technically, will it really do everything they say it can do?
  • What is the turn around time for bug fixes and enhancements?
  • What happens if the provider goes bankrupt?
  • Is their software kept in escrow?
  • Can you easily get your data out?

It is not crucial to get everyone in the IT department to agree and sign-off but you will need your most senior staff to sign-on.  Remember, the decision is primarily a business one.

Making the leap to SaaS may be the best move the company ever makes.  It all depends on the reasons for leaping and what you land on!