Posts

Showing posts from 2010

Mechanizing the new Enterprise

In this era of Economic Crisis, things are dramatically changing inside the enterprise. Not only low-level employee headcount is decreasing but is some cases high-level, too. It is even possible that department merging takes place. For example typical HR processes are directed to the Accounting Dept. or Marketing is merged with Sales Dept., under one “roof” and management. This is a “business transformation” that needs to be supported by Information Technology, in new ways.

In a traditional organization, the HR dept. could have been executing their tasks using spreadsheets or even paper-based processes. This was a system that had been “developed” by an old fashioned HR manager (who is now close to his/her retirement and who will probably not be substituted due to downsizing). If a non-HR specialist is given these tasks, he/she will probably have a hard time finding his way around paper-based processes and custom spreadsheets. Therefore, the procurement of a new HR system is now a “must…

Challenging SaaS (part 3)

Anti-SaaS arguments can have their source in true technical concerns or (in some degree) by the buyer’s physical resistance to sign-in to something that they don’t own. This can become a critical factor in some parts of the world, where the sense of ownership is very strong (my country, Greece, is one of them; I hear it’s the same in India and I’m sure that there are a lot more examples like that). And this sense of ownership is strong in other aspects of everyday life, too. For example, the acceptance of leased car versus owning an automobile is not the same in all countries.
Let’s go on to see some more examples:

I want it up and running on Sundays. It is possible that what the vendor is providing “out-of-the-box” is hot-line customer support on working days and hours. Some prospects are challenging that by raising the argument that they do not just work “nine to five”. In cases like that it is only logical that you will be charged more if your require hot-line availability beyond the…

Challenging SaaS (part 2)

In this post I shall continue with the “anti-SaaS” arguments. In the previous post, we saw some arguments that are usually thrown to the table, from the first 5 minutes of discussion. If you get past these critical 5 minutes, then the discussion goes into more specific issues, such as the following:

What happens if Internet fails? Assuming that SaaS is a synonym to Internet Technology, this is the among the first (and funniest!) arguments that I have heard. Some people (say that they) recognize all positive aspects of SaaS but they are afraid of what’s going to happen if Internet fails. My usual answer is that “internet DOES NOT fail”. It is more probable that the electricity in your neighborhood is going to fail, than the Internet lines. And what do you do when electricity fails? You just stop working because your PCs are not working; the elevators in your building have stopped etc. Or, if you MUST work then you switch to manual: You issue invoices from your hand-written statement blo…

Challenging SaaS - Part 1

In my efforts to sell SaaS I have been presented with a number of “anti-SaaS” arguments. Some of them are just irritating but some of them require a professional and comprehensive response.
In this post I will try and enumerate these arguments and also provide a convincing response. You see, I believe that adopting SaaS is also an issue of people (customers) training. They still do not understand the benefits of SaaS but they clearly see its drawbacks, from the first minute of discussion. A few days ago, an accounting professional responded to me like this: My personal mentality drives me to always own what I am using. That’s why I don’t embrace the idea of SaaS. This person clearly understood the economic benefits of SaaS, but he still resists to adopting it.

Where is my data? People tend to think of data as something “sacred” – and it probably is. Enterprise data is the enterprise’s asset. They have worked long and hard to create this clientele (i.e. customer file) and those economic …

SaaS and the Outsourcing function

SaaS is not a brand new idea. It used to be called “ASP – Application Service Provisioning”. It didn’t work out very well back in the 90’s and 00’s, but now it’s back. There’s no doubt about that.
Neither Outsourcing is a new idea. It has been going on for quite some time now.
In this post I am going to explore what can happen when these two services are mixed. What business opportunities can be born for both the outsourcer and the SaaS provider, but most of all what are the benefits that the end-customer will enjoy.

First, let’s try to answer the basic question: Why do we need to mix these two services? The answer is that outsourcing will surely need some kind of “tool” to deliver what it is promising. And on the flipside, a SaaS provider tends to be somewhat “technical”. They cannot always address the real business issues of the potential client. And they surely cannot offer anything more than their software and maybe some consulting and best practices on the usage of this software (ex…

Business Intelligence in SaaS offerings

In this post I will try to explore the challenges that one will face when they try to mix or attach Business intelligence (BI) tools in their SaaS offering. In the traditional software delivery method, you had your database installed on an owned server. You just had to give access to users and designers (through their BI desktops) to access these data. They could query and download data (given certain permissions, of course, but this is another story).

In a SaaS application, the database no longer resides in your premises. If we are talking about a private cloud, then, yes, between your desktop and the database there is the internet (“wild” internet or VPN). Your BI application should be able to access a remote database server through TCPIP (which is obviously not a problem for modern applications).

But, what if you are a user of public cloud – multi-tenant system? Let’s see some points of consideration:

True multitenant systems comprise of one database instance and one application inst…

Tenancy models in SaaS

Anybody who works or talks around Software as a Service (SaaS) has dealt (or, at least, come in contact) with the question “multi-tenant or single-tenant environment”. This question has become so common that one might think that there are just these two options. I would like to scrutinize on this issue: What alternatives are there when designing a SaaS environment, in terms of tenancy?

Single-tenancy With this model the supplier sets up one complete environment for the client to use. By environment, I mean the application server, the database server and any other component that the application needs in order to be operational; excluding, of course, the network and some common network devices, firewalls etc. With this model, you have 10 servers with 10 OS’es, 10 application instances, 10 databases. You also have 1 rack (with a limited physical capacity, of course) and you are bound to set up the 2nd one, pretty soon!

Single-tenancy, virtualized With this model the general architecture is…

Customer self-service (the solution)

Having seen “the problem” of shifting tasks from inside the enterprise, to your co-operators, today I will propose “the solution”.

The basic idea is to let these co-operators become part of your organization. Let them “in”. Let them become users of your application systems. Let them pull the information that they need instead of you working to push it to them.

e-Business started with the basic idea a long time ago. And so, electronic shops were created. You can now go “inside” a million shops, browse through the products, order them, pay on-line and get on-time notifications about the status of your order. That was a real breakthrough. But it is not enough, because it stops that the final stage of the order. I think that we must have agreed so far that Sales is not the only function that your business is performing, right?

How do you manage to give functionality to your co-operator, before the Sales Order and after that? Through a web portal that goes beyond the logic of the e-shop. Ther…

Customer self-service (the problem)

A lot of discussion is being done about CRM. It’s been going on for quite some time now. These days, with the blooming of social networks and the millions of users that they attract, a new discussion has been opened, about Social CRM.

Don’t get me wrong, but I believe that some of the aspects of SCRM are somehow “exotic” for the average SMB. Let’s not forget that some of them don’t even know what CRM is or they have placed it low on their priorities! I know this because I have conducted my own research on the matter. Don’t get me wrong: I could go on and on about the benefits of CRM and SCRM, even for the SMB (let alone the big enterprises), as a large number of other bloggers have already done, but this is not my purpose today.

If we accept the basic definition that “CRM is a tool and a methodology to help the Business create and further grow relationships with its Customers”, I would like to propose another way of doing this (building and growing). I want to tell you right from the st…

Personalization in web applications (part 2)

In this 2nd post which is dedicated to Personalization, I shall continue to list some features that I think are interesting and welcome by all users. I am sure that you will find “yourselves” in there (if you are web developers) or that you will see a wish-list (if you are internet users).
Remember, the object of Personalization is to make the web system more attractive and more usable at the same time. After all, with all these systems and sites out there, you have to make a difference if you want the users to stick to your system, instead of the next guy’s.

Save Searches
All web systems provide some kind of search facility, be it a generic search engine that looks inside the web site and returns relevant documents or be it a search facility for the supported entities of that web system, such as “invoice search”, “loan search”, “customer search” etc.
I would bet that a user friendly search offers a whole bunch of search criteria. I would also bet that having an exhaustive list of search …

Personalization in web applications (part 1)

In this era of “www” domination, more and more software vendors turn their sights to web application development. You can see traditional client/server (or even COBOL!) developers, turn to modern development tools, such as Microsoft-based, IBM-based, Open Source, you name it.

All of them are willing to invest on re-building their traditional applications and re-launching them either with the same name (“web version now available”) or as a whole new product offering.

Web technology, HTML, Javascript etc. offer new possibilities and functionality to building modern applications with “sharp” user interface and new tools for the end-user to exploit. In this post, I would like to focus on the issue of “personalization”. This is a term that did not exist when the ERP’s of the 80’s were dominant. So, what does “personalization” mean in a modern day web application? What are the features and what are the benefits that you get from these features? Don´t get me wrong; I am not aiming in presentin…

Economic Crisis - How can I.T. help

Amidst an environment of Economic Crisis (global or Greek!), the modern Enterprise faces a number of challenges. It also faces some pressing questions about its mission and objectives: should it turn its sights to new ventures? How is its mission statement affected by the crisis? What are the alternative revenue sources that can be used to enhance the financial position of it?

In this post I shall not deal with such issues (which are mainly in the agenda of the CEO or the President). Instead, I shall focus on “trivial” problems that the Enterprise faces in its everyday operation (ones that are amplified, though, in an Economic Crisis situation) and how Information Technology can assist in tackling them. In the end, I intend to show that I.T. must be utilized (“mobilized”, if you will) in a time of Crisis and that I.T. is a valuable ally in the “war against the Crisis”. I will approach this goal by identifying some of the problems that are enhanced during an Economic Crisis Situation.

Th…

CRM, integrated with your core-business software

In this post I would like to tackle an issue that has often become a point of dispute between different “schools of thought”: Do you need your CRM module, integrated with your core-business-function software, or not? How does an integrated CRM module help you (better) than a separate system?
First, we need to remember that (most will agree) CRM is not “this” or “that”. Every operation or enterprise has its own needs and requirements. Everybody is looking at their customers in a different way: Somebody may be particularly interested in the accounting balances and early warning on high ones. Another may be interested in Ticket/Problem handling. A services company might be interested in keeping time records per customer per project. The examples are endless. For that, I will try to provide general answers that have (I hope!) global applicability.

Firstly, I will acknowledge that separate CRM products will often offer more functionality (since that software vendor specializes in the CRM are…

SaaS Pricing Models (part 3)

In the previous posts we unveiled a number of different pricing models for SaaS applications. In this turn I’d like to explore the reasons why similar products, priced with similar models, can vary so much, in terms of final price.
Let’s just remember that the two basic elements of costing are:
a) Initial Fee (or start-up cost – this can even go down to zero)
b) Periodical costs per “unit” (whatever this is…)

Multitenant vs single tenant
It is obvious that if you board a single-tenant solution, you will be provided with your own server (physical or virtual), your own database instance and your own application instance (executables or whatever this is). All of these require additional effort to support and maintain from the Vendor’s side. And this will obviously reflect on your costs. In addition, initial setup will require additional effort that simple does not exist in case of multi-tenant solutions.

Level of application parameterization
If the application supports extensive parameterizatio…

SaaS Pricing Models (part 2)

In this post we shall continue with the discussion on several Pricing Methods of SaaS that started in the previous one. Here we go:

Pricing per Transaction: This is an entirely different model. In this model, we are not counting users, time or modules. A business application is offered as a whole (in most cases a core-business-function type of application). The pricing is done on the basis of transactions done by any number of users in any time unit. Of course, then main thing here is to define what a transaction actually is.
For example, in banking applications a “transaction” could be one complete loan application (of course, technically speaking, this is not ONE transaction, but business-wise it is). It could also be a cashier transaction from the bank teller. If this is an outsourced Credit Scoring function, then a transaction would be one score result (regardless of the number of loan co-applicants).
Another example is this of an accounting application: A transaction could be one l…

SaaS Pricing Models (part 1)

There has been a lot of discussion of how a SaaS offering is priced. Different vendors use different pricing models. To the untrained eye it may seem that they don’t know what they’re doing. But, obviously, this is not the case. Vendors have thought a lot before applying “this” or “that” Pricing Model and you can rest assured that they’ve also done their competition research.

Today, we shall explore the different Pricing Models of SaaS (we shall focus on SaaS; what you are about to read does not necessarily apply to PaaS, IaaS or other forms of “aaS”). We shall also try to approach an answer on why similar pricing models of similar applications can diverge so much from each other.

Pricing per user, per month: This is a very common practice that reflects the fact that the criticality of the application on the Business functions is proportional to the number of users that are using it. It is attractive to the Buyer because it is very clear to him what is going to pay on “day one” and wha…

Is SaaS an enemy of the IT Manager?

The Internet is full of comments and blog entries that praise the benefits of SaaS, against in-premise. I have also done this (praising)! Of course, most people accept that in-premise has not reached its end (and first of all, Microsoft that preaches “S+S”, Software plus Service); but also most people see the benefits of SaaS…

OK, so why don’t “most people” embrace SaaS in an “absolute” way? By “people” I mean the in-house IT managers of the Enterprise-Buyer and by “absolute” I mean “right here, right now”. We ARE in the middle of a financial crisis and we MUST cut down on internal costs, NOW, right? Today, I shall explore the reasons why the IT Manager is still reluctant to embrace SaaS and also try to answer each one of his/hers concerns. So, what is the average (and forgive me for saying this) and not so SaaS-educated Manager thinking?

I will have no control on the critical business applications, like I do now. Wrong: You will still be the key player on designing user procedures and …

Integration vs Best-of-breed

Today I shall dive into the waters of two different implementation philosophies or “schools” if you prefer: What is the best solution for enterprise-wide Software? One integrated system that “does it all” or a selection of systems/modules, each of which is (or tries to be) the industry leader in its sector?
It is not an easy answer and I’ll give you a hint right from the start: It also depends on local market habits.

First, I’d like to share a couple of experiences that totally changed the way I (as a software supplier) see things:
During my company’s research of the automotive industry in USA and its effort to establish its presence there (in the US), I shockingly found out that there are car dealers out there that use 3 or more systems to do their job: A dedicated system for the car sales, a system for the repair shop, one more for the parts management and nothing regarding Accounting (this is something that their accountant is doing in a “black box”). My first reaction was: “are these…

Customization: an enemy of SaaS? (part 2)

This is part 2 of the same issue: Is Customization an enemy of SaaS?
In the previous entry, I referred to some examples that will create pressure to the SaaS Vendor because a) these Change Requests are “logical” or “rational” on behalf of the Buyer and b) they are technically complex.

Now let’s see some more aspects of the problem:

Example #3: Look’n’feel
Let’s assume that your SaaS platform has covered some ground in the area of personalization, color schemes, logos etc.
Now, a new customer comes along and requires some extra elements of personalization that your app does not cover. E.g. I recently hit on a case that the customer wanted the color scheme in all web forms to change! Another customer said that “the correct way to place fields in the customer file is last name – first name and not first name – last name”. He actually wanted to swap the positions of these two fields because he felt that his users will have difficulty adopting the “layout of the new system”. Questions:
Do you ac…

Customization: an enemy of SaaS? (part 1)

Today I shall examine the issue of Customization on a SaaS (focus on multi-Tenant) environment, where the SaaS application is a business application and not a tool. By the term “customization” I do not mean the Localization (e.g. regional settings per user, area-specific rules such as taxes, VAT etc.); for simplicity reasons, I shall assume that all Localization issues have been resolved and examine only various aspects of Customization.

This post intends to give IT managers and SaaS Buyers in general an idea of the possible challenges there may face when they “board the SaaS vehicle”.

In order to illustrate the issues, I have selected some quite common “Customization Requests” that SaaS Buyers raise (remember that we are talking about a business application):

Example #1: Functionality enhancements – part 1
When we are talking about high-end business applications, such as an accounting system, a sales & invoicing system, a retail banking system etc, we can assume that the Buyer will …

Business Transactions through Cards and Cheques

The Greek Ministry of Finance recently announced that, as of 1/1/2011, all “business transactions” above 1,500 € will be done exclusively through credit card or cheques and drafts. Today, we shall examine what this means for the tax-collecting mechanisms, what implications are going to emerge but, most importantly, what it means for software vendors (for whom this column shows particular interest in).

First, let’s define what a “business transaction” is, in this context. There are two kinds:
B2B: One company or enterprise pays another legal entity for its services or products.
B2C: A customer pays the company for its services and products.
In the first case, the drafts and cheques will dominate, while in the second case the credit cards will (there used to be drafts – “grammatia” – in the Greek market but nowadays they are limited). You can also think of variants of the above, but the main idea is the same..

What does this new “method of payment” mean for the tax-collection mechanisms?
I th…