Where SaaS Works

Is it time to give your licensed software the boot? Early users find some things are less of a problem with software services.

Mary Hayes Weier, Contributor

June 6, 2008

3 Min Read

The best-of-breed approach means that integration can be a challenge: just two in 10 respondents who use SaaS say they can easily integrate it with other systems. By comparison, one in three of all respondents say they could easily integrate conventional licensed software.

However, integration, like customization, isn't always a priority for those choosing SaaS. Consider that SaaS often makes its way into businesses by a single department that's looking for a quick way to automate a business process. On-site software integration requires IT's involvement and potentially outside consultants, adding time, money, and complexity to some software projects. While businesses don't want to be left with an ill-fitting collection of noninteroperable applications, some business processes work just fine when automated by a standalone, nonintegrated SaaS.

In Rydex's case, once it opted to permanently adopt Unica's marketing software service, it decided to keep it separate from the rest of the company's IT infrastructure. In fact, IT is completely hands off. "I don't have to have a consultant or internal IT support to maintain the system, and that's huge," Keen says.

This approach works for Rydex because there's no pressing need to integrate marketing automation with other apps. Meanwhile, the ease with which traveling employees can tap into the Web-based hosted app from anywhere in the world also has been a huge boon, Keen says, improving collaboration and shaving about 10 days off the typical 45-day marketing project.

SaaS isn't any easier or harder to integrate than on-premises software, says Ingres' Harr. His SaaS-dominated application mix works because he's chosen vendors that already have integrated some of their systems. Intacct has integrated its order entry and accounts receivable software services with Salesforce's sales force automation service. Now Ingres is preparing to implement Vtrenz, a marketing automation software service that also integrates with Salesforce.

chart: Perception Of SaaS -- Percentage of respondents who agree with these statements as they apply to business applications delivered via SaaS -- click for full view of the chart
(click image for full chart)

SaaS vendors that have been in business the longest offer the most in terms of integration and customization, Harr says. Salesforce, for example, lets him build custom screens and tables and add fields for users. Meanwhile, he expects SaaS integration will improve as more software and software services are built using Web SOAs.

Life Time Fitness' Prise says the company initially had problems getting Workday HR to communicate with a homegrown application that parses out employee data to various other systems. Workday solved the problem with some updates to its software, but Life Time monitors communications between the systems whenever Workday does an update as an added precaution. It's not a perfect solution, but it's one that lets Life Time reap the benefits of SaaS without giving up the functionality it needs.

Many companies launch a search for a SaaS solution using the same criteria as when they vet conventional software--looking for customization and integration capabilities and ways to protect against a vendor relationship gone sour, among other things. But as the experiences of early users show, the driving factors aren't always the same for SaaS, which works best where there's a need for simple, reliable, and relatively affordable software that turns on every morning without the help of IT.

Depending on the business process it automates, the limitations of a SaaS offering may pale in comparison with its more positive attributes. A great user interface may outweigh lack of customization, and limited integration isn't an issue for many apps that don't need extensive connections to the IT infrastructure. In addition, vendor lock-in is less of an issue when using best-of-breed approaches.

All told, as IT managers look more closely at SaaS, they're thinking differently about what they value in the software that powers their companies.

Photograph by Getty Images

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