Many companies are considering a move to software as a service (SaaS), but they are really not sure if it is for them. They typically have a series of questions they ask. They do not often deviate from these questions, so I thought it would be germane in the context of this series of Industry Insights to list the most frequently asked questions that go along with the entire issue of SaaS consideration:
1. What do I need?
This should, almost without saying, be the starting point of any IT discussion, if a software solution fits the company's particular requirements, whether in the cloud or onsite. The starting point is always a company's unique requirements and the ability of a vendor to meet them. So before even considering a move to SaaS, or the cloud, everything revolves around fitness for purpose.
2. What is the vendor's track record?
The vendor whose solutions the company is considering needs to have a demonstrable track record of success. He needs several reference sites, which his customers are happy to endorse, and they should ideally be in the company's industry. They should also be able to demonstrate value in both cloud and in-premise modes.
3. Will the vendor meet the service level agreement?
SLAs are vital, especially as a cloud-based service does mean surrender of some control over a company's strategic applications, along with the associated hardware platforms. Few companies can afford to have less than 100% uptime, and if this is compromised because applications are moved to the cloud, it will have been a poor trade-off. Strict and enforceable SLAs must guarantee uptime, throughput, bandwidth, features and functionality, response times and future roadmap, to mention a few.
4. What level of customisation is permitted?
When it comes to software solutions, it is not enough to acquire and implement a "best-practice" ERP system, or a stock-standard, off-the-shelf package. All a company will achieve is parity with its competitors, when what it is seeking is the competitive advantage a properly designed and implemented solution should confer.
SaaS computing allows a company to recoup its software investment and use it to increase revenue.
Richard Firth is CEO and chairman of MIP Holdings
Again, the solution should confer such strategic advantage, irrespective of whether it is in-premise or cloud-based. It is the way the software mirrors business-appropriate processes that help a company leapfrog its competitors. In my experience, software as a service takes companies far ahead of the pack, and it can and should be highly configurable and customisable.
5. When does the business enter into a profit situation?
Software is normally viewed as a sunk cost, a necessary and unavoidable expense. However, SaaS computing, as I have been discussing it for the last few months, allows a company to recoup its software investment and use it to increase revenue. In assessing a cloud-based solution, a company will need to ensure it meets these criteria.
6. Can the system scale cost-effectively?
Planning for scalability is key to the success of an in-premise system: it is perhaps even more important in a cloud-based solution. With an in-premise system, the company has control of all the factors that ensure scalability; with cloud-based computing the Internet can become the company's greatest bottleneck, given South Africa's historical bandwidth constraints. Always remember, the system is only as strong as its weakest link.
7. Who is in control of my data?
Data is the lifeblood of any company: that has been said so often that today it is something of a clich'e, but it remains true nonetheless. In any cloud engagement, IT and senior management need to ensure the appointment of a data steward among whose responsibilities is the securing of corporate data. All classic disciplines must be attached to the data, which always remains in the company's possession, no matter where it is hosted. And ongoing reliability, availability and continuity plans must be put in place. Without such plans and assurances, the cloud will at some stage deliver a few nasty surprises.
8. Can I take my solution in-house?
Customers must always be the final arbiters of business requirements, and if it is necessary to move from a SaaS or cloud model to an in-premises approach, this should be accommodated within budgetary constraints, and without penalties for the customer.
9. Must I use my vendor's hosting partner?
This should not be essential. After all, a vendor may have a hosting partnership for preferential rates and economy of scale, while a customer has had its own well-established hosting relationship with another company for years. If service standards can be maintained, there should be, in theory, no reason to compel a customer to switch to another hosting partner.
10. Does my IT strategy accommodate some form of services-oriented architecture (SOA)?
The architecture should not be a total restructure of one's systems, but rather a process of osmosis, changing each subsystem as budgets, time and resource become available. An SOA model allows the company to keep some systems in-house and others outsourced or “SAASed". The network and communication architecture must be thought through so all the pieces can talk to each other. For example, the core financials may be kept in-house with the freighting system on the cloud and the warehousing system on an in-house SaaS structure.
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