The Path to Software-as-a-Service Success

Citing real world experience, three executives weigh in on the benefits of SAAS – and warn how to avoid pitfalls.


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Posted December 27, 2007

Sandra Gittlen

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As enterprises large and small ramp up deployment of new applications to employees, business partners and customers, they are feeling the pressure to outsource software delivery to best-of-breed providers rather than develop and manage solutions in-house.

Such an approach has its advantages. “SaaS providers have individuals on staff who are dedicated to making sure a single application has 100% uptime as opposed to someone in-house who has to juggle multiple applications and other IT tasks,” says Douglas Menefee, CIO at The Schumacher Group Emergency Medical Solutions in Lafayette, La. “They are also able to roll out updates with new features on a quarterly basis. In some ways, that makes a SaaS provider more reliable than my own data center.”

Before you head down this path, check out the lessons from three of your peers below who have already charted the SaaS waters for you.

Name: Douglas Menefee

Title: CIO

Company: The Schumacher Group Emergency Medical Solutions

Location: Lafayette, La.

Challenge: “We’re a 13-year-old company that provides emergency room services, such as physician recruitment, scheduling and compensation to 150 hospitals across the country. Although we only have 650 employees, with our physician consultants we are a 3,000-person organization and have an annual growth rate of 20 percent to 30 percent. We had a home-grown database that managed all our customer relationships but it wasn’t the ideal solution for our organization. For instance, workers in our regional offices are always on the road and need mobile access to the database. At the time we decided to look for a new solution, Hurricanes Rita and Katrina hit the area and we realized we needed to address business continuity as well.”

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Solution: “Two years ago, we decided to go with salesforce.com’s on-demand customer relationship management solution rather than trying to build or buy something for in-house. Today, we have 230 users on the system and plan to increase that soon.”

Impact on IT: “This was very much a ‘we build it and we own it’ culture when I came on board three years ago. However, with on-premise applications, I needed an army of individuals just to keep them running. I wanted to move to an environment of architects, not builders. And we did experience a large turnover within the department after we went to SaaS. But one of the main reasons we went with the SaaS model was to give our IT professionals a chance to be innovative instead of just doing maintenance on in-house systems. Now they get to focus on maximizing what we can do with applications and making them more streamlined and efficient for end users.”

SLA advice: “Make sure you communicate regularly with your contacts at your service provider to review your service-level agreement. Salesforce.com has a success manager that we meet with on a quarterly basis. Also, look for a model that ensures they want to keep you happy. For instance, my success manager’s compensation is tied to retaining me as a client and expanding my user base.”

Contingency plans: “Although we do have an SLA that covers outages and disruptions, my No. 1 worry is if salesforce.com gets acquired and I have to deal with management changes or service interruptions. It wasn’t possible to add that possibility into the contract… so we created our own plans that if anything does happen, we can temporarily work offline.”

Final thought: “The big thing to remember is that SaaS doesn’t solve bad processes. We tried on a couple of occasions to try to make services work instead of doing what we needed to do. Instead you have to use SaaS as a catalyst to change and improve your processes.”

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