Big SaaS Done Right

These organizations are floating more and more applications into the cloud. They're scaling up, while keeping a keen eye on the risks and rewards.

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But Wander isn't alone in his thinking. The number of SaaS implementations is climbing in other enterprises, says McNeill. He adds, "We're seeing global implementations of cloud services across the very largest of organizations," including even core enterprise applications to some extent. McNeill sees the use of horizontal SaaS applications globally or across large swaths of the corporate user base as a key trend.

That view is backed up by research from Gartner. The overall market for SaaS-delivered enterprise applications will increase from $9.97 billion to $23 billion by 2015, representing a compound annual growth rate of 17.9%, according to a November 2011 Gartner report.

Cindy McKenzie, senior vice president of enterprise application services at Fox Entertainment Group, has also moved aggressively into the cloud. Transferring 11 shared services applications, ranging from recruiting to tax reporting, over to SaaS providers was "the riskiest business decision I have made in the last 18 months," she says. The global SaaS deployments, which host personally identifiable information and other sensitive data, "pushed information security, audit and legal [departments] past their comfort zones," but allowed the business to get strategic initiatives up and running more quickly and at a lower cost than on-premises alternatives, says McKenzie.

This year, Fox plans to move more corporate applications to the public cloud, including payroll and HR. The new system is easier to use than the existing PeopleSoft application, has passed a five-year total-cost-of-ownership evaluation and can be online in much less time than it takes to upgrade PeopleSoft.

The most critical success factor, McKenzie says, was involving the audit, security and compliance departments from the beginning. "It saved a lot of headaches. If you try to do that work after the fact or when you're signing a contract, you've lost your negotiating power," she says. "The biggest surprise was how immature the governance processes were for some of the smaller SaaS vendors. We ended up pushing a number of vendors to make changes to meet our standards."

Guardian's team follows a well-defined, formalized process from start to finish, says CTO Richard Scott. "Together we evaluate all aspects of technology solutions. It's based on a matrix and scoring and a very pragmatic, objective way of looking at the solutions," he says.

"We have good vendor management processes," which are part of Guardian's governance model, Wander says. Guardian has the same operational processes for SaaS and on-premises software. "We have operational performance management. We check response times just as we would do internally. And we take end-user satisfaction measures over time," he says.

A Disciplined Approach

Start scaling up SaaS with a centralized procurement model, these executives say. Before Guardian developed its federated approach to technology acquisition, its SaaS deployments didn't always go through IT, says Doug Greene, vice president of corporate systems, security, risk and compliance at Guardian. That's a common problem, especially in large companies, according to Robert DeSisto, an analyst at Gartner.

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