SAAS & ON-DEMAND SYSTEMS
Software as a Service: Is the Cloud
Within Your Reach?
Many businesses have been paying more attention to the concept of software as a service
(SaaS) and how it can be incorporated into their IT portfolios. The most commonly stated ben-
efits—rapid deployment, lower cost, and scalability—must be balanced by other key decision
criterion, such as fit, ROI, and risk.
—David Meyers, principal, Tompkins Associates
recent surge of press releases regarding SaaS
has highlighted low start-up cost, speed of
implementations, reduced operating costs,
and scalability as the greatest potential benefits of deploying
tion (as would be the case for a pharmaceutical company executing a new product launch). However, global trade management, visibility, and collaboration applications may be ripe for
SaaS across the board.
the SaaS model, which allows “enterprise-class” functionality
A detailed supply chain IT impact assessment, using a holis-
to small- and medium-sized businesses. SaaS offerings can be tic approach to the classic fit-gap analysis, must be performed
most advantageous to businesses that have strict rules-based to determine if the SaaS model is right for the operation. That
processes, in which any limitations of the applications’ config- approach should consider long-term return on investment and
uration can still accommodate supply chain best practices.
short-term total cost of ownership. A hybrid deployment
The benefits should be tempered with some cautions, such model might be an alternative.
as limited availability, less than adequate functional fit, and
some lingering risk and security concerns. SaaS solutions may
not be the best fit when the applications need to support—and Despite the complexity of most organizations’ supply chain opera-are critical to enable—core business processes that create tions and the broad range of unique business requirements across
competitive advantages for the business; supply chain execu- them, there will still be an increasingly attractive business case for
tion capabilities often fall within this realm.
the use of SaaS under the right conditions in 2010. At the same time,
Caution is advised when using SaaS for mission-critical sup- the adoption of SaaS for most business critical processes—
includ-ply chain processes even if the window of downtime or loss of ing supply chain execution—will be slow for all, except for the
availability is small: they could lead to a major business disrup- most low-risk and rigid supply chain operations.