So, the war between on-premise and cloud solutions is over and SaaS has won. Of course, right? Those last holdout “on-prem” CIOs are now in the very small minority, and you can almost picture them standing on the last server barely floating on a rough sea—holding the last ERP system upgrade on CD in their left hand, and a fist full of network cables in their right.
Companies like Amazon and Salesforce have transformed the IT function in ways that still have yet to be fully understood. Now, business users are buying software, running their businesses on platforms completely outsourced and even purchasing and implementing analytics tools. This is great, right? Well, mostly, yes.
BUT, there are functions that an IT practice brings to bear other than storage, organization and access to information. What about systems governance? What about prioritizing projects across competing departments? What about optimizing configuration and security for the future? Balancing the demands of different user groups accessing the same systems?
Let’s focus on Security for a minute. Do you have one systems administrator who owns your cloud-based system? Or do you have 40 people with systems admin rights who, at any given time, could delete all of your data, break all of your workflow rules or WORSE completely screw up your currency tables, messing up your forecasting numbers and bookings numbers without you even knowing it so that you are reporting the wrong numbers to your board for a full year before you realize it?
Yes, buying SaaS has transformed business operations—-particularly for the mid-market—in a positive way. Companies with 50 employees and $20 million in revenue now have access to sophisticated tools once reserved for the Fortune500. Meanwhile, that Fortune500 company can implement radical business changes in months or weeks for tens or hundreds of thousands of dollars when prior on-premise or hosted solutions meant years and millions.
Now, it’s time to take a good hard look at what is required to get the most out of investment in SaaS/PaaS applications upon which modern companies completely run their businesses. As software rose to prominence in the 1990s, so too did the expectation of paying annual maintenance fees of 20% of the license costs to cover upgrades, bugs, troubleshooting and support. Likewise, the SaaS buyer should expect to invest beyond the licenses to optimize their investment.
The following are areas in which we see dramatic under-investment:
There are typically four components to the modern, open and leading SaaS platforms:
A good SaaS vendor with an open ecosystem like Salesforce features a wealth of easily accessible information and support when it comes to the out of the box solution. But what about those parts unique to your business? Are you documenting it? Are you ensuring redundancy in internal knowledge? Do you have a consultancy you can trust to improve, maintain, change and support it?
Additionally, there are three keys to successful implementation and on-going employment of any system:
All of these areas suffer when there is no one to weed the garden, remove dying and diseased plants, prune the healthy ones, and account for behavioral changes due to seasonality every quarter.
So, what is the answer? How do you balance investing in an open, extensible and business-user-friendly platform with the need for security, governance and IT best practices? It starts with setting the right expectations for what that on-going support needs to look like:
Easier said than done. Consider investing in the following areas:
There is no question that the war is over, and SaaS has won. What victory looks like will depend upon how the organizations now building their businesses on cloud-based platforms choose to protect, enhance and optimize those investments.
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