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Community Publishing
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On-Demand Business Intelligence Solution Lowers Total Cost of Ownership and Risk
By Amit Kesarwani on Friday, December 08, 2006
What is Software as a Service (SaaS)? SaaS is defined as a software solution that is hosted and supported by a vendor as a service, which is accessed by users via the Internet, without the need to deploy and maintain an on-premise IT infrastructure.
SaaS is closely related to the Application Service Provider (ASP) and On-Demand software delivery models. The hosted software delivery model is similar to ASP: a provider hosts commercially available software and delivers it over the web. In the software On-Demand delivery model, the provider gives web based access to a single copy of an application created specifically for SaaS distribution.
The key characteristics of software delivered as On-Demand are:
- Centralized hosting and management of software rather than at each customer’s site.
- Web based access.
- One-to-many (single instance, multi-tenant architecture) instead of one-to-one model.
- Subscription/usage fee instead of license fee.
The Pitfalls of Traditional On-Premise Software
Despite the fact that companies have become more reliant on sophisticated software to run their business, a majority of these organizations are dissatisfied with their return on investments. Corporate executives are frustrated with the time, effort and cost required to deploy new applications, as well as the ongoing resources consumed to keep them up and running, plus the cost to stay innovative.
In the traditional model, the supply and demand for features usually don't match. Companies buy software loaded with bells and whistles they don't need. In 2005, IDC surveyed 250 IT execs, finding that companies believed they use just 16% of the software they buy.
Benefits of SaaS SaaS is enabling companies to quickly deploy business software, easily administer these applications, obtain best-in-class capabilities and redirect their scarce resources to strategic initiatives such as business process improvement. SaaS providers earn their return over the term of the relationship, rather than front-loading costs via a license sale.
The primary reasons that companies are turning to SaaS rather than continue to struggle with traditional on-premise applications are:
- Greater ease of use and added business value.
- Global accessibility and easier collaboration.
- Faster deployment time and reduced time-to-market.
- Reduced IT infrastructure acquisition and maintenance costs.
- Shift from capital to operational expenditure.
- Usage-based pricing.
- Reliability and scalability.
Security A question that has plagued SaaS solutions since they first came to the market has been the issue of security. A primary driver to keeping solutions on site has always been the security and control of data, especially sensitive financial and customer information. Decipher Tech finds would-be customers with concerns about security in spite of the non-stop efforts of SaaS vendors to allay these fears. Addressing this concern requires us to ask another question – how good is your in-house security?
Businesses thinking of buying into a SaaS solution should consider a number of points:
- It is more than likely that a SaaS vendor has better security than your own in-house IT. Through economies of scale and the fact that their reputations – and business – depend on it, SaaS vendors are very security-focused.
- Any SaaS vendor should be willing to produce documentation of their security capabilities – security is a selling point.
- Not only will the vendor have their own security, but the hosting facilities they use take the security of their customers’ data seriously.
- The data held by SaaS vendors is not freely available to their employees.
Business Intelligence
Business intelligence (BI) refers to products that help businesses store, find and analyze the information they need to make better decisions. If business intelligence used to be a rearview mirror showing where a business had gone off the road, business managers today want BI to serve as a global positioning system, showing them where they are and the shortcuts to their destinations.
BI can also save money, and time, by presenting complex information more clearly using Dashboards and Scorecards. Dashboards quickly communicate complex enterprise performance information by integrating key data elements into a single visual representation. The dashboards also provide a very inexpensive way to do collaboration with business partners.
Scorecards visually communicate an enterprise’s progress against Key Performance Indicators (KPIs). KPI targets are used to manage objectives and execute on the larger strategy with approaches such as the balanced scorecard.
On-Demand Business Intelligence
On-Demand BI provides much more benefits than operational Software as a Service due to the complexity and high cost of BI systems. On-Demand BI providers can easily offer economies of scale and shared cost using multi-tenant architecture but without jeopardizing security. Some providers may also offer smooth transitions to dedicated infrastructure or product license as your company grows.
Key benefits of On-Demand BI as compared to traditional on-premise BI solutions are summarized below.
On-Demand BI Adoption
On-Demand software has generated growing industry attention and customer acceptance because it offers a simpler and lower cost method of adopting and administering essential business software applications. It also makes it easier for end-users to access and use these applications via the Internet.
A handful of promising on-demand companies – salesforce.com, RightNow Technologies, NetSuite, to name a few – are gaining adoption with SMBs. And large software companies like SAP and Oracle are retrofitting their programs with the offering of “SAP CRM On-Demand” and “Siebel CRM On-Demand” respectively.
On-Demand BI is also becoming an increasingly prevalent delivery model. Underlying technologies that support web services and service-oriented architecture (SOA) are maturing and broadband service is becoming increasingly available to support user access from more areas around the world.
Amit Kesarwani
Decipher Tech
amitkesarwani@deciphertech.com
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 By
Emil Walcek
@
Wednesday, December 13, 2006
2:45 PM
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Any executive considering yet another expensive and time-consuming internal IT project would be well served by Amit Kesarwani’s introduction to the SaaS (Software as a Service), or ASP (Application Service Provider) models outlined in his article. However, a manager in such a position would miss half the story weighing only TCO and risks associated with traditional and web-based software solutions. There are substantial marketing benefits from the SaaS/ASP models, including cost-of-entry, ease of use, and ROI. These are in addition to the business information and analytics that are almost an inherent side benefit in the SaaS web-based model, and tough to even consider in a traditional IT project.
If the experience of our business-to-business marketing communications agency is any guide, savvy web-based marketers are embracing the SaaS/ASP model like a breath of fresh air.
Starting at the planning stage, web-based applications for site functions like system configurators, purchasing aids, product selection guides, eCommerce, customer service, order tracking, and more require little more than an outline of functional specifications and a timeline for development to proceed.
Because the server-based model is typically built upon common scripting solutions, custom solution development is less expensive and more easily adapted. Blind alleys and development dead ends are also less deadly than in custom desktop application creations.
Because everyone knows their browser, user and administrator training and manuals are almost superfluous. Documentation is either in-line, on-line, or unnecessary if the user interface has been designed with any thought.
Happy web site users make for happy and loyal customers. Who can doubt the marketing benefit of a secure site visitor using a well-planned web interface to get what he or she wants in real time 24/7?
Compare all of these features to a proprietary IT system and the overwhelming acceptance of web-based SaaS/ASP model will come as no surprise, despite the issues Amit so adequately addresses in his introduction. In the case of the SMB market, there is no question: adopt the Web-based hosted solution model, or loose market share.
--Emil Walcek
advertise@ejwassoc.com
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Introduction
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Sir Winston Churchill once said, "If you have knowledge, let others light their candles with it."
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