Sunday, 10 February 2013

Interpret the advantages and disadvantages of SaaS

Software-as-a-Service (SaaS) has grown far beyond its early roots of popularity in a few selective services areas such as HR and CRM services, and is now gaining acceptance across a broad range of applications for Software Outsourcing business and IT user populations alike, including ERP software.
Here are given three reasons to switch to SaaS ;
  1. Many complex or customized IT solutions take a long time to implement and this can create difficulties in making the change over to the new system – with SaaS, there is no hardware or software installation, so the new system can be adopted with immediate effect.
  2. With most SaaS solutions, you pay on a monthly basis – no commitment in purchasing a complex new system for millions only to discover that there are unexpected short-comings or the system isn’t perfectly suited for your company.
  3. With the flexibility of SaaS solutions, it’s easy to do a trial with one team or department before deciding to use the solution across your entire company.
Many Software Development Companies today consider SaaS as a cost-advantage over on-premise in the short-run due to its quick implementation times and pay-as-you-go pricing. But many question the long-term value of SaaS, wondering if the rent-versus-own model necessarily has a cost crossover point and if so, when?
It is imperative to objectively evaluate the impact on a business when considering the adoption of SaaS including:
1. SaaS enables fast deployment, better user adoption, and reduced support needs and how will your company benefit from SaaS?
2. Subscriptions can provide reduced cost implementation, upgrades, and training costs but how will your company pay, both in hard costs and resources, for SaaS?
3. With SaaS, cost savings and adoption rates can be uncertain so how do uncertainties change the total impact of SaaS on your business?
4. Hire ROI and lower costs
5. Less Time to Recoup costs = Faster ROI
6. Lower maintenance, and fewer ongoing hardware and resource requirements. It’s also more affordable and easier to extend the solution to new projects and more users.
7. Quickly adapt to changing business needs.
SaaS Disadvantages:
  • SaaS isn't a silver bullet or magic - and will not provide the same benefits to all users. Some organizations find it very difficult to relinquish control or trust third parties to manage their applications and data
  • Some vertical markets require industry specific business applications for which SaaS solutions are not available
  • Organizations without clear objectives and defined business processes will be no better off with a SaaS solution than with an on-premise solution.
When looking at Saas offerings there are many components that make up the total cost of ownership. To start with a Software Company must look at maintenance, support, training, tenancy, security, integration and implementation resources and strategic fit to name a few.
Even though the vendor is hosting the software, companies still have to implement the tool, integrate it with other systems as well as migrate existing data into the new system. All of which may not be taken into consideration when purchasing the technology.

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