Many analysts’ reports indicate a strong growth potential for the SaaS (Software As A Service) solutions in the gradually emerging Cloud market. Some of the cloud offerings from SAP include SAP SuccessFactors BizX, SAP Cloud for Financials, SAP Cloud for Travel, Business ByDesign etc. I am trying to share here my understanding about the benefits from a SaaS solution –
1) Quick access to best-in-class Solutions – SaaS model offers the option of accessing some of the best in-class ready-to-use cloud-ready business applications. The consumer does not have to make any upfront investment in order to provision the hardware or configuring / building the software solution. This is enabling enterprises to have more aggressive time-lines for their projects. Here, ‘agility’ or ‘velocity’ becomes the key advantage and consumers can go-live in much shorter time-window.
2) Lower efforts for life-cycle maintenance activities – The SaaS solutions are continuously upgraded with the best-in-class industry standards and are kept forever on the recent releases levels / patch levels on the underlying software / hardware platform by the SaaS vendors. This continuous maintenance / upgrade of the underlying platform (software, hardware, OS etc.) is handled in a manner that does not impact the availability of the business applications from a consumer perspective. Thus it reduces the efforts associated with planning business outages along with execution of complex system upgrades etc.
3) Subscription based model promises lower TCO, if planned properly – This optimizes the start-up investments to a large extent. Traditionally SAP applications have always been sold on a user-license based model where the customer has to decide upon the total number of expected user licenses right upfront. Besides, the enterprises have to pay separately for their hardware, software and implementation / support efforts for their on-premise SAP solutions. However, under the SaaS model, it is ‘pay-as-you-go’ or subscription based model. Thus it not only allows the SaaS consumer to pay for the actual usage of its user licenses, but also gives them an all-inclusive price for the entire stack i.e. hardware-software-implementation etc. I believe, this suits enterprises that are taking their business on to the cloud in a phased manner.
4) Increased Business agility – the SaaS model brings in more agility in terms of faster provisioning of additional hardware capacity based on the scalable platform provided by the hosting solution of the SaaS vendor. Thus the conventional gestation period of waiting for the hardware to extend its business solution is no longer there. An elastic infrastructure is foundational to cloud computing and thus through the SaaS solution, an enterprise can reduce their time-to-market for new solutions without worrying too much about the increased computing capacity (since this is managed by the SaaS vendor).
5) Requirements for experienced developers / administrators / functional consultants (either in-house or from implementation / support partners) are significantly reduced compared to traditional on-premise SAP solutions. As the SaaS solution is built-deployed-maintained by the SaaS vendor, the major part of the SaaS implementation efforts are around the integration of the SaaS solution with the rest of the on-premise business applications.
6) No separate efforts to comply with regulatory guidelines – as the SaaS vendor is responsible for complying with all the audits / regulatory guidelines (e.g. Sarbanes-Oxley etc.) of the industry pertaining to its offerings, the SaaS consumers do not have to separately put in efforts to plan and maintain the regulatory compliance of their individual business applications which they have procured as SaaS.
7) Increased efficiency through standardized operational activities – Activities like Backup, Upgrades etc. are standardized for all the consumers of a given SaaS solution and hence overall efforts (and hence costs) for planning and executing such tasks for an individual consumer gets lowered. Besides, the self-service catalog with standardized interfaces can bring in increased discipline and business-process standardization across the enterprise.
8) Streamlining the vendor management efforts – Unlike a traditional SAP implementation, where a customer needs to put in significant efforts for working with hardware vendor, implementation partner, support partner etc., under the SaaS umbrella the services are typically all integrated under one-umbrella or one vendor as far as the SaaS consumer is concerned. The SaaS vendors bundle the platform-consulting-industry/process knowledge in its SaaS offering.
9) Assured response time without significant stress testing or volume testing efforts – the SaaS consumer does not need to be concerned about the stress / volume testing for its SaaS application before go-live, provided there is contractual service-level guarantee for response time from the SaaS vendor. There is response time SLA in the SaaS contracts. So SaaS vendors need to make necessary arrangements for the desired performance time as the user-base grows.
10) Fewer unforeseen problems – As SaaS solutions are based on standard configuration and standard delivery platforms, there are fewer chances of errors due to specific client configuration. If the SaaS vendor has adequate fault-tolerant and redundant design in terms of hardware / data-centers etc. then it reduces the chances of downtime even further.
Before I conclude this blog, I would like to mention that the suggestions or thoughts that have been put up here are my personal opinions about SaaS implementation benefits, based on my self-study / research of several articles / white-papers and blogs etc.