Managed Maintenance Blog

    SaaS vs. Build it Yourself (BIY)

    February 25, 2015

    Industry analyst Forrester Research notes that while SaaS adoption hasSaaS vs. Build it Yourself so far been concentrated mostly in human resource management (HRM), customer relationship management (CRM), collaboration software (e.g., email), and procurement solutions - it is poised to widen.

    Today it’s possible to have a data warehouse or niche application in the cloud that can drive improvement in ‘the customer experience” and delivers the big win – driving new sales opportunities, maintaining your customer base, and acquiring new customers. The dollar savings can run into the millions. And SaaS installations are often installed and working in a fraction of the time of on-premises deployments.

     

    The Big 8 of ‘Why SaaS?’

    What is your business?

    Doesn't your organization have enough on its plate? Now, your staff wants to build it themselves because … However, taking advantage of SaaS applications that bring immediate ROI with little burden on your staff gives your organization a competitive advantage. It makes your organization agile. And, your staff can stay focused on delivering applications that more efficiently runs your business.

    SaaS requires little upfront investment.

    There is no application development. Your organization does not expend capital resources. The time a solution can be implemented is reduced from many months (or years) to a matter of weeks.

    Reduced time to ROI

    With SaaS, the outlay of capital and human resources is greatly reduced. In the SaaS model, the software application is already installed and configured. Many SaaS companies offer free trials – delivering a painless proof of concept and a discovery phase to prove the benefit to your organization. The new application delivers a return on investment from day one.

    Monthly recurring operational expense with no capital outlay

    SaaS software gives you the benefit of predictable operational expenses. It allows for more accurate budgeting, and a clear measurement of ROI. The application can usually scale with the growth of your business and yet can be redacted in more economically challenging times.

    Reduces support and administration time to close to zero

    Your SaaS vendor is responsible for upgrades, uptime, and security. Since the application is hosted by the vendor, they take on responsibility for maintaining the software and upgrading it, ensuring that it is reliable and meeting agreed-upon service level agreements, and keeping the application and its data secure.

    SaaS has been building its case for rapid user acceptance and training for years. In 2014, an author at t IT World Canada quotes the 2009 report “The ROI of Software-As-A-Service,” where Forrester noted that: “SaaS solutions typically offer seamless, automatic, frequent upgrades as part of the ongoing subscription charge. Because these upgrades happen more frequently and therefore incrementally than on-premises solutions, they typically have significantly reduced testing and end user acceptance and training costs.”

    While some IT people worry about security outside of their enterprise walls, the likely truth is that the vendor has a much higher level of security than the enterprise itself would provide. Many will have redundant instances in very secure data centers in multiple geographies. Also, the data is being automatically backed up by the vendor, providing additional security and peace of mind. Because of the data center hosting, you’re getting the added benefit of disaster recovery.

    Higher adoption rates

    SaaS apps tend to have lower learning curves and higher adoption rates. This can be especially significant given the high cost of on-premise software development and implementation vs. the low cost of entry for SaaS. Whether a SaaS application or BIY, training is a critical component. Most SaaS vendors provide training to your staff. Your organization does not require in-house SME’s to train your users.

    Integration and scalability

    SaaS vendors create APIs to allow connections not only to internal applications like ERPs or CRMs, but also to other SaaS providers. And as you scale with a SaaS vendor, there’s no need to invest in server capacity and software licenses. Simply adjust the subscription.

    You control how your new SaaS application can be accessed

    Since the software is hosted in the cloud and accessible over the internet, users can access it via mobile devices wherever they are connected. You can allow employees, vendors or customers to securely access your application and determine those access rights.

    Gartner predicts the SaaS market to be $22.1 billion globally in 2015, up from $12.5 billion in 2011. Where is your organization in this market trend? BIY or SaaS?