|
A study earlier this year by management consultants McKinsey & Co. found that some 74% of the companies it surveyed were open to using on-demand software applications from a third party, which is also knows as using software as a service.
But going with an SaaS solutions isn’t as easy as getting on the Web and calling up all the applications you need to run your business. There are any number of challenges.
Ken Harris, the CIO at Shaklee Corp., a provider of natural nutrition and personal care products – and the former CIO at the Gap and Nike -- listed many of the obstacles in a presentation he gave during yesterday’s CIOZone virtual trade show on software disruptions. They included: systems availability, transaction response time, disaster recovery, security and privacy, and managing the relationships with SaaS vendors.
Just think about systems availability. If your employees can’t access your hosted applications, your company is dead in the water.
The way to avoid most of the potential SaaS problems, Harris says, is to work out a tight contract with vendors to minimize the risk. Spend a lot of time upfront, he says, checking out your vendors’ resources. Then create the right contract – one that might rely more on the rewards you can hand to your vendors than the penalties you can levy upon them.
When it comes to systems availability, for instance, Shaklee gives its vendors an incentive bonus if applications are available 100% of the time. If it’s 99% or higher, they get full payment. But if it’s under that level, the vendor gets penalized.
For items such as transaction response time, error resolution time, and other issues, “the concept is the same,” he says, “you have incentives for the vendors.”
How’s it working out?
Shaklee is using a number of on-demand applications – everything from its call center, to its contract management, to mission-critical application such as order entry.
Only registered users can write comments.
Please login or register. |
