SaaS Realities

Old notion: SaaS is more hype than help, with hidden costs and security worries. New order: Buying IT services as you go keeps pace with changing budgets and business demands.

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Are you able to customize SaaS?

Chiazza: "When we first implemented Salesforce.com more than five years ago, it was not customizable by the user. Slowly but surely, they started giving us the keys and opening things up. We now have 300 to 400 custom fields and three or four custom applications." A new application can take a few hours to a few days to set up, he adds.

Wakeman: "Years ago, we decided our [SaaS-based] ERP system would be as vanilla as possible. That was a wise choice. It commoditizes it and means we can move to someone else, because vanilla is vanilla.

"For commodity stuff like e-mail, back-office and basic systems -- don't customize it. For stuff that's unique to your business, run it in-house or build a front end to it, and put all the customization in there."

Raybon: "Our business has some unique forecasting needs that aren't part of the off-the-shelf forecasting functions of CRM On Demand. So we put that in a separate system. I have my own group of IT people who are developing pieces around the core function."

Is SaaS an especially attractive option now that the economy is tanking and IT budgets are under pressure?

Chiazza: "Salesforce.com does not come out of our IT budget. We pay for it. It's a business expense. You only pay for what you use. It's here to stay."

Flax: "Service offerings are great because they allow us to ramp up and down. We think we should be able to do the same thing year-on-year for 5% less. So I'm always putting downward pressure on our budget."

Wakeman: "Because SaaS charges are treated as an expense, whereas the costs of developing an in-house system are capitalized, SaaS may enable a company to sidestep reductions in its capital budget."

Harris: "You'd like to continue to make progress in capabilities and technology through tough budget times. SaaS is going to be one of the best ways to do that."

Next: How a team with people from diverse disciplines helps organizations succeed

This version of the story originally appeared in Computerworld's print edition.

Copyright © 2008 IDG Communications, Inc.

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