{"id":2402,"date":"2020-04-03T05:52:00","date_gmt":"2020-04-03T05:52:00","guid":{"rendered":"http:\/\/www.ceo-worldwide.com\/blog\/?p=2402"},"modified":"2025-03-13T05:38:19","modified_gmt":"2025-03-13T05:38:19","slug":"the-three-stages-of-the-enterprise-saas-relationship","status":"publish","type":"post","link":"https:\/\/www.ceo-worldwide.com\/blog\/the-three-stages-of-the-enterprise-saas-relationship\/","title":{"rendered":"The Three Stages of The Enterprise SaaS Relationship And What To Do Next"},"content":{"rendered":"
<\/div>\n
<\/div>\n\n\n\n

When picturing the relationship between the enterprise and the Software-as-a-Service (SaaS) business model, I imagine an evolutionary process that can be divided into three main stages. The first let\u2019s call \u2018The Comfort Zone\u2019; the second \u2018The Enlightenment\u2019; and the final stage \u2018The Re-Assessment\u2019. Once we examine these we can then decide upon the right course of action when choosing how to adapt to the IT demands of the enterprise.<\/p>\n\n\n\n

The Comfort Zone<\/h2>\n\n\n\n

First let\u2019s look at the enterprise company. Typically it may be a bit strapped for resources and possibly even struggling to find the staff to assign to some of their most mission-critical IT projects in one of their departments.<\/p>\n\n\n\n

And then there\u2019s the SaaS business model \u2013 now a major trend among enterprise corporations. Most major SaaS players, such as Salesforce.com provide some form of web-based application functionality. Also known as on-demand, these guys charge their customers on a per-use subscription basis. And it\u2019s a particularly attractive and efficient alternative to on-premises applications because it reduces the significant risks and costs of CRM implementation (and we\u2019re all aware of the success rates of most CRM projects).<\/p>\n\n\n\n

The major advantage of SaaS is that it can exist within the enterprise – similar to an ICBM missile silo within a military network \u2013 where the silo remains completely self-contained. The great thing about SaaS, from the enterprise\u2019s perspective, is that it allows the business people to operate independently from IT, typically requiring only minimal input from them. It also makes life much easier for the CFO – allowing finance to make on-going payments rather than have to allocate and then justify a full-blown investment.<\/p>\n\n\n\n

So SaaS really offers a \u2018comfort zone\u2019 solution for both the business and IT departments. SaaS offers the department\u2019s user group a fully-functioning solution in quick time, while freeing IT from the worry and cost of having to implement a large on-premises IT project, or build the application in-house. A typical example of such a success is Salesforce.com, where a rapidly implemented sales force automation solution makes for happy sales staff and company executives alike. A win-win solution for all involved \u2013 for the time being. This leads us on to our next stage, ‘The Enlightenment’.<\/p>\n\n\n\n

The Enlightenment<\/h2>\n\n\n\n

One of the great barriers to maximizing the full value of SaaS comes from the very reason the enterprise adopted it in the first place. The \u2018silo\u2019 effect means that the on-demand application remains effectively disconnected from the other applications that run in the enterprise, with the result that its information remains compartmentalized.<\/p>\n\n\n\n

In the case of on-demand CRM solutions, SaaS software running solo can be viewed as a set-back to the process-driven enterprise, working in opposition to the goals of architects and business process analysts. And as a result, the enterprise, while happy with the fact that their mission-critical tasks are being performed, now begins to grumble.<\/p>\n\n\n\n

Add to this the following issues and a re-assessment become almost inevitable:<\/p>\n\n\n\n

    \n
  1. The lack of automation that comes from being disconnected from the enterprise\u2019s in-house applications means more data duplication, more manual entry and more human errors. You can\u2019t even imagine how much enterprises are spending on these problems today!<\/li>\n\n\n\n
  2. As the on-demand application acquires increasing quantities and quality of information, other departments will want to buy-in and enrich their own applications with this data.<\/li>\n\n\n\n
  3. With the on-demand application becoming further enriched, your CIO will eventually want to apply some ownership to the system for security\u2019s sake. Whereas in \u2018The Comfort Zone\u2019 it was more convenient not to own the system, now the situation becomes reversed.<\/li>\n\n\n\n
  4. And: With continued growth of subscribers to your on-demand application, eventually the enterprise will want to re-evaluate the license cost structure and subscription fees.<\/li>\n<\/ol>\n\n\n
    \n
    \"The<\/figure>\n<\/div>\n\n\n

    The Re-assessment of SaaS applications<\/h2>\n\n\n\n

    Our enterprise now knows both the benefits and drawbacks of SaaS applications. Essentially the enterprise now needs to transform their SaaS application from a department-level tactical system to an enterprise-level solution to eliminate the duplicated work and manual processes, and to find a way of milking more value from their application and creating a more favorable cost-structure for the long-term.<\/p>\n\n\n\n

    The enterprise is essentially faced with two choices:<\/p>\n\n\n\n