Software-as-a-Service: Challenges for Mid-Market Companies

Posted by Rick Davidson on January 9, 2015

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Are you a midsize company ready to start or expand your software-as-a- service (SaaS) implementation? Here are the main challenges that lay ahead, and ways to prepare and overcome them.

The first hurdle is technical in nature. You’ll need to configure, integrate, deploy and support SaaS applications and on-premise software in a heterogeneous application environment. That can mean maintaining a high level of IT skills in-house. The attraction of SaaS, with its low start-up costs, may be more than offset by the additional skills required to manage a more complex application portfolio.

Closely related, the second hurdle is both demographic and economic in nature. It’s becoming increasingly hard to find high-end IT talent as legions of Baby Boomers retire. Mid-market companies, in particular, will have the most difficulty attracting and retaining high-end IT talent. The shortage is already a problem and expected to grow over the next decade.

As demand goes up, so does price. Many companies will suffer economic pains compensating a full staff of talented individuals, many of whom will find it more financially lucrative to freelance. As a result, mid-market companies may want to consider reaching out to third-party vendors to supplement internal staff and overcome some of the technical, demographic and economic challenges they will face in the near future.

Are you ready to start or expand your software-as-a- service (SaaS) implementation?

The Promise of SaaS: Here’s Why You Want It

SaaS solutions, by their nature, enable rapid time-to-value, require a low initial investment and allow companies to stay current with the latest software enhancements. SaaS is fast to deploy, is enormously scalable and billed using a variable-cost model.

There’s another reason it’s become an increasingly attractive approach to provisioning enterprise software: Business leaders have become cynical about the benefits of fully integrated ERP software suites from Oracle, SAP and others.

They have little patience for large up-front ERP investments, typically measured in millions of dollars, with deployment time frames that span years versus months and questionable ROI measurements.

Look for Hands-On Planning, Implementation, Deployment & Maintenance

Your goal is to assess, specify, deploy and support an application ecosystem of SaaS and on-premise solutions that will accelerate your time-to-value and cut the cost of IT. All good.

Now let’s talk single sign-on, data management, application integration, business intelligence and Governance, Risk and Compliance (GRC) using internal IT resources. It gets messy fast. But you can get it all done with the help of solid third-party system integrators and managed service providers.

If you’re a mid-market company and/or budget constrained, these specific third-party services can be especially valuable:

  • Deployment: Design, configure/develop and deploy SaaS and on-premise solutions, either as turnkey projects or by partnering with your internal applications team.
  • Post-Live Support: Provide ongoing post-deployment application configuration and administration support, particularly for custom extensions of SaaS platforms.
  • Adoption: Proactively provide ways to boost SaaS user acceptance, functionality and value delivered.
  • Integration: Provide ongoing SaaS and on-premise application and data integration support by deploying an integration Platform-as-a-Service (iPaaS). The goal is to ensure compatibility of heterogeneous applications across the entire application portfolio. That includes protecting the fidelity of data during migration, transport (encrypted) and usage between the cloud and on-premise data stores.
  • Testing: Provide ongoing SaaS and on-premise applications testing (functional, integration, regression) before new releases go into production. This would include provisioning testing and training “sandboxes” in partnership with both SaaS vendors and your on-premise hosting environments.
  • SSO: Recommend, develop, deploy and support an access/authentication solution using federated identity management tools like Ping, Okta or Onelogin. They help manage end-user credentials required to access both on-premise and SaaS applications.
  • BI/MDM: Design, develop, deploy and support business intelligence (BI) solutions, either as turnkey projects or in concert with your BI team. Solutions would encompass ETL processes from on-premise and SaaS solutions to provisioning an operational data store (ODS). The ODS will serve as a consolidated information repository for BI reporting tools such as Tableau, MicroStrategy, Business Objects or Cognos.
  • GRC: Implement Governance, Risk and Compliance (GRC) using ITSM/ITIL frameworks supported by tools such as ServiceNow or Clarity. Address risk management and compliance requirements as defined by your particular industry (SOX, data privacy, PCI, HIPAA) using tools such as Archer and MetricStream.

In essence, experienced third-party SaaS system integrators and managed service providers can eliminate a lot of the pain associated with managing a heterogeneous application environment while enabling you to achieve the goals you set out to achieve by implementing SaaS solutions.