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Standardize or Customize? SaaS May Influence the Decision.

There is a long standing debate in technology implementation. Should we shape the technology to fit the user or force the user to fit the technology?  The movement towards Software as a Service (SaaS) may force the decision.

We all like freedom to do what we want with technology. This is what a lot of people mean when they say ‘user friendly’.  This freedom comes with costs, however.  One variation of the 80/20 rule says that 80% of the cost of technology relates to the last 20% of its functionality.  All vendors that we’ve worked with have found that the 20% almost always relates to things like flexibility,  configurability, etc.  All code words for customization to meet idiosyncratic user needs.

SaaS is a big buzzword in the IT world now.  Using software in the cloud is  appealing for a variety of reasons.  It reduces sunk costs in buying and installing enterprise and desktop software, can simplify maintenance, and improve support.  The most publicized examples include email and productivity tools (GMail, Google Docs, Salesforce.com, etc.).  However, enterprise technology providers including SAP are bringing forward offerings.  Business analytics giant SAS is also promoting ‘On-Demand’ products.

The trend towards SaaS is encompassing vertical markets, as well, including insurance vendors.  At the 2011 Insurance-Canada.ca Technology Conference,   several analysts and vendors provided data on the opportunities for insurers and brokers to use of SaaS and Cloud computing.  Donald Light, Senior Analyst at Celent noted that SaaS provided lower initial licensing costs, and automated  upgrades.  Several suppliers discussed cloud based solutions, including Microsoft (CRM), and Exigen (Core Insurance Systems).

A recent InformationWeek poll suggests there is definite enthusiasm for SaaS solutions: “The percentage of companies using software as a service climbed 13 points in just 11 months, from 47% in our 2010 survey to 60% this year–one of the biggest adoption increases we’ve seen for any technology category in such a short period.”

However, the same survey adds some water to the wine:  “in tandem with the jump in SaaS use over the past year, overall satisfaction levels took a dip. In our 2010 SaaS Survey, 85% of respondents said SaaS met or exceeded expectations. Now only 74% feel that way.”  The surveyors found that many of the respondents expressed concern about features, functionality, and integration.  In other words, customization.

There are substantial cost advantages to the SaaS model, so the 80/20 rule may start to look like a 95/5 rule.  There may be an added value point for standardization.  Don Light points out that not only do SaaS users get the most current software as the most favourable price, the SaaS model allows company’s better enforcement for standardized best practices.

 

One Comment

SaaS

SaaS use is up but user satisfaction is down. I wonder if that is with regards to the service or the relationship with the vendor. One of the problems that I have experienced with statistics is that they can easily be tweeked to benefit the person or persons using them. There are many questions to be asked and answered with regards to this post.

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