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Today’s SaaS Solutions: Silver Bullet or Double-Edged Sword?

Companies expect their IT to deliver more than ever before, especially in terms of scalability, downtime, and support for mobile devices. That’s where software as a service (SaaS) comes in – promising greater agility, flexibility, and automation. While SaaS has been around for quite a while, it has now evolved to a level that can meet the needs of many organizations. If you’re looking for a solution to your IT challenges, SaaS is well worth considering. Read on to find out about the pros and cons of this approach.

SaaS: What Is It Exactly?

Software as a service allows companies to subscribe to tried-and-trusted enterprise software. This software and the associated IT infrastructure are run by an external provider, who leases the components and services to businesses, as required.

SaaS entails a radically different approach to storing and processing data. Applications run in a cloud network, which companies access via Web or API. This enables end users to easily access the software from almost any location.

Experts reckon that SaaS offerings can cover as much as 90% of the needs of a corporate function. Currently, the most common applications leased under SaaS models are enterprise resource planning (ERP) and customer relationship management (CRM), as well as solutions for payroll, human resources (HR), and financial management.

Proven Support for Business Processes, Greater Flexibility

When you introduce SaaS, you’re essentially outsourcing selected functions and processes to a third-party provider. This has a number of appealing benefits. For example, by leasing standard software, you gain best-practice support for a wide range of processes in many industries. In my professional experience, solutions of this kind can reflect most enterprises’ processes out-of-the-box.

Because IT capacity is entirely on the provider side, scalability is no longer an issue. Opting for SaaS allows you to ramp your IT up and down in line with actual needs. This means that you can adapt more flexibly to changes in the business environment while sidestepping costs for unused computing power.

What’s more, with SaaS, you can book functions and services from your provider as you need them, at very short notice and in virtually unlimited quantities. As a result, you achieve the agility required to respond quickly and effectively to unexpected shifts in your business environment.

Free Up IT Staff, Reduce Manual Chores

Another major advantage of SaaS is that your provider takes full responsibility for a host of essential IT-related tasks such as access, security, availability, performance, maintenance, and updates. This frees up your staff to concentrate on more-strategic, value-adding work.

Because SaaS is highly standardized, you can automate a whole range of time-consuming manual activities. For example, deploying standard analytics capabilities on a CRM platform enable you to derive new leads from existing data sets – with no intervention required on your part. This kind of automation not only improves operational efficiency; it also significantly reduces scope for human errors.

Lower Costs, Zero Maintenance Effort

Keeping a tight rein on costs is always a business imperative. By embracing SaaS, you eliminate not only spending on purchasing and installing software, but also ongoing maintenance and upgrade costs.

Moreover, the pay-as-you-go model means you’re billed only for what you use – no more and no less. This is particularly appealing for small business, who can enjoy access to costly, high-powered software that would otherwise be out of their reach.

Buyer Beware: Potential Downsides of SaaS

While SaaS has many benefits, you should also be aware of its possible disadvantages. One pitfall is that service providers have evolved the way they offer their services. Today, many deliver interdependent modules that deliver their full advantages only when deployed together. This can be costly, so your sourcing department should perform a careful cost-benefit analysis before taking a decision. Otherwise, SaaS could quickly become a drain on your financial resources.

In addition, there’s a danger of “lock-in” by becoming dependent on a specific provider. This risk is even greater where SaaS underpins key business processes. And bear in mind that changing providers can be very costly, which is one reason why it’s such a rare occurrence.

Limited Support for Non-Standard Processes

Another potential issue is a lack of customization options. Because SaaS is generally standard software, it tends to offer relatively limited scope for customization. This is fine if your organization has standard business processes. But if your processes are a bit out-of-the-ordinary, you could run into problems.

That applies especially to logistics, production, and transportation processes, which give many organizations their competitive advantage thanks to customizations that simple SaaS solutions can’t hope to reflect. In such cases, deploying SaaS could significantly reduce the process cycle times or even make processes totally inefficient.

Finally, SaaS is delivered over the Web, and that entails the risk not only of being locked into a service agreement, but also locked out of your enterprise software. If the Internet connection goes down, users can lose access to critical applications or data, bringing your business to standstill.

Effective Change Management: The Key to Getting SaaS Right

Having witnessed and supervised multiple SaaS implementations, I can say that it’s essential to ensure that you have holistic change management in place. The processes supported by SaaS can be very different from those your organization is used to. And this calls for a comprehensive change management process.

Is SaaS Right for You?

While it helps to be aware of the upsides and downsides of SaaS, this is obviously not enough to base your decision on. To determine whether SaaS is the right solution for your business, you have to take many other company-specific factors into account.

If you’re interested in finding out more about SaaS and whether it’s a good fit for your organization, feel free to reach out to me. And if you have real-world experience with SaaS (positive or negative), please share it in the comments section below.

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