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The emerging challenge SaaS brings to business

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Peter Thompson
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SaaS adoption is growing at an incredibly fast rate but there are challenges that will create strategic and operational decisions that may impact a business’ ability to function effectively. Vendors are presenting SaaS as the necessary way forward for companies. Significant investment in software applications delivered as a service is only at the infant stage.

On the face of it, it’s fantastic. The vendor provides the software as a subscription on an on-going basis. The vendor usually creates a virtual “tenancy” whereby a dedicated and secure instance of the software application is partitioned. The peripheral necessities required to run the application software such as the server and networking equipment are included.  In most cases, backup and accessibility from anywhere on the Internet are part of the service making it quick and easy to be up and running.  There is no requirement for the customer to worry about managing the system, just usage. Or is there?

Business requires more than one software application

The greater inherent problem is that, in most cases, not one SaaS application will meet the needs of the business. Not having a single business application for the entire business is not new. It is the case with traditional client server based applications. Most businesses require software for word processing, spread sheeting, ticketing systems, accounting systems; there is also a growing need for CRM. Add to that, the industry specific application requirements, such as legal practice software for lawyers and that is where the unforeseen potential for problems begins to emerge.

Having integrated applications that share common data automatically saves enormous time and reduces the chance of error. Logging in and out of different programs is tiring and maintaining duplicate customer information in different software systems is cumbersome and prone to mistakes due to its manual nature.

The short to medium term challenge with SaaS is how the average company will integrate and manage the different applications. There are several new operating factors to consider compared to a traditional server and desktop, client server environment.

The challenge of the Application Programming Interfaces (API’s)

Consider how a CRM application will communicate with the ERP system or ticketing system. In many cases, business analysts and programmers will need to be hired to write the application programming interfaces. In some cases the vendors will offer an integrated API as part of their solution. Check out

http://thesmallbusinessweb.com/ to understand one group of software vendors that is trying to address some of the diverse application challenges.

After the initial analytical and programming effort whereby the application integration is successful, a new future challenge will emerge. The SaaS vendor will naturally make upgrades to their application. Software maintenance is a feature of the service but delivered differently as upgrade will be made with little consideration to third party, integrated applications. This will often result in one or more of the API’s no longer functioning and an upgrade or modification to the API will have to be programmed. But, how long will that take and at what cost? Will a programming team be on standby to make this immediately?

What does this mean? Imagine that one of the application API that connects the accounting software to the CRM stops working. The translation is that the contact records and data will no longer be exchangeable. In practice, the accounting application may not be able to retrieve the contact records. Or another API connecting the ticketing system and the customers might result in support tickets not visible within the CRM. The problem could be far worse.

Speed derived from the application hosting location

Even when an API is either configured or developed, where are the instances of the application hosted? Is one application in the USA, another in the UK, a further in Australia? Will the performance, as these applications try to share data, result in poor productivity as a result of slow integration?

These challenges lead to serious considerations and the reason is that no one other than the customer is responsible for the performance of the entire integrated system. The SaaS vendors do not guarantee the outcome of the entire integrated system but only the performance of their own software.

The emerging IT manager and service provider

Keeping abreast of the SaaS upgrades, managing API software and having a team ready to make updates will be a critical aspect of keeping businesses of the future running. New operating costs integrating cloud businesses applications will emerge both in the initial development and the ongoing maintenance of the applications in addition to the API’s that glue the applications together.

Think, plan and be well organised

Transitioning operational software to SaaS vendors has some potentially superb advantages. However, there are risks and serious measures that should be put in place to prevent operational systems failure. Responsibility will fall on the end customer and choosing the right partner to manage this will be essential.

There is a great deal to consider as the future of IT becomes outsourced. If you have any questions or see this challenge ahead of you, please feel free to send me an email. I think we have some good ideas on how to determine the right path for your business.

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About Peter Thompson

Peter Thompson
Peter Thompson founded GCOMM in 1996. He received his Bachelor’s degree in Software Engineering/Information Systems from Griffith University and his MBA from Nyenrode Business Universiteit in Holland. He believes in building great teams of people, both in business and socially.
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