SaaS Strategy: What The Top Brass Wants To Know 2

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SaaS Strategy: What The Top Brass Wants To Know

The request nags. Why now? What have they been reading? What do they want to know? And what do they know that I don't?

Relax. Whether it's with the board of directors, an executive committee, or a group of business unit leaders, CIOs everywhere are having the SaaS talk. SaaS is at that point of maturity when business technology leaders need to have an opinion on it--where it works, where it might, and where it won't. And given the implications for speed and cost of deployment, expect them to have their own well-formed opinions. There are several key points they'll want to hear about, and some misconceptions you'll want to clear up.

But first: Do you have a SaaS strategy? Most IT organizations don't. In our InformationWeek Analytics survey of 131 SaaS customers, 59% say it's a point solution, not a long-term strategy. Yet SaaS and the broader concept of cloud computing are the hottest topics in IT since the Internet itself, so it's not surprising there's much interest among your company's leadership. Your CEO and CFO are reading about the trend; they hear it talked about at conferences. And your business unit leaders have been pitched by SaaS vendors, and they may have bought some. So any blanket "not for us" won't cut it. Our survey finds that 47% of companies use some SaaS, and that number is certain to rise rapidly.

We talked with CIOs about how they discuss SaaS with the most senior leaders of their companies. Based on that, we offer five guidelines.

1. Manage Expectations

"Try to dial back the 'cloud' conversation," says Laef Olson, CIO of RightNow Technologies, a provider of online customer service applications. That advice may seem surprising coming from an exec at a SaaS vendor, but there are two good reasons Olson is advocating a conservative approach. First, this topic has been "super-hyped." Second, he's a CIO (formerly head of IT for travel site Orbitz) and therefore a pragmatist when it comes to buzzwords. "Nobody says, 'Boy, if I just had more SaaS in my organization it would be a lot better,'" he points out.

CIOs already know tech talk is deadly in a business meeting, or they wouldn't be where they are. Fellow executives have been exposed to the proverbial "airplane article" (or two) about SaaS and the cloud and might feel talked down to by a primer. "Everybody in the room knows enough to be dangerous," Olson says.

Instead, delineate what business problems you're trying to solve. Of course, every CIO walks that line now: responsibility not just for the organization's technical infrastructure, but also for delivering business solutions. But as our research suggests, most companies don't have a strategic view of how SaaS fits into an overall tech deployment strategy. "I think you want to start there," Olson says.

Manpower CIO Denis Edwards does have a SaaS strategy. He talked with fellow executives at the $16 billion-a-year staffing company about which project characteristics--such as the type of data involved--make sense for cloud applications, and which don't. Edwards let his peers know that IT likes SaaS and cloud infrastructure as a service for their speed-to-market and cost-cutting benefits, and that it's on the lookout for the right places to apply it. It's an ongoing conversation.

To read the rest of the article,
Download the May 2010 issue of InformationWeek Boardroom Journal