I really like LinkedIn.
[ I dabbled with Facebook for a little while, but truth be told, I gave it up. Even though I know that every company that respects itself has a presence there, it still feels a little silly to share my professional views on a social network where my kids exchange juvenile videos, girlfriend status or tomatoes on Farmville.]
The professional groups on LinkedIn can generate very lively discussions on things that matter to their members. Recently, I participated in a comment-war-of-attrition (over 50 extensive comments) on one of the larger CIO groups on LinkedIn. The origin of the discussion was a simple question of how to evaluate SaaS vendors, but the discussion quickly shifted to the concept of SaaS and then to the idea that SaaS limits the freedom of the CIO.
Lack of Freedom?
One of the participants was especially passionate against SaaS and kept talking about the idea that SaaS takes away your freedom because of vendor lock-in, because there is no control over the servers and the application and because there was no option to customize the software. Another point was that SaaS was totally dependent on the Internet to function (my refrigerator is totally dependent on the electric grid; is that a reason not to buy one? I find it hard to believe that any modern business is NOT dependent on the internet whether it has SaaS or not).
It’s not about IT and it’s not about the CIO
Let’s examine the kinds of freedom that this CIO is talking about. Owning and maintaining your own hardware. Wow! You have the freedom to research, negotiate, purchase, rack, stack, connect, test, maintain and upgrade. Yea! Are your users in HR thrilled about that? Are they applauding the efforts and wonderful results? Does all that effort get them closer to a solution or is it a justification for the IT budget?
IT has the freedom to research, purchase, install, test, integrate, maintain and upgrade the software package. Yea again! It did take nine months to get here, but guess what? we have our own software!
The Sales department might ask you why couldn’t we have done that nine months ago, using a SaaS solution, but' heck, what do they understand about IT’s needs. Oh yes, forget about the new versions that came out since – now we have the freedom NOT to upgrade (actually, we are scared s**tless about touching production after finally stabilizing the system).
I believe that the freedom the CIO was talking about was mostly about the freedom to stay in charge and have the business units dependent on IT.
[I do agree that in some cases, maintaining control of on-premise software has merit or it is governed by regulations; but that should be the exception, not the rule.]
Freedom to Customize
But, aha, IT will say, we have the freedom to customize the application to our heart's content. We own it! We can do whatever we want with it. But do we really want to customize the application? Is our hospital so different than thousands of other hospitals that our WFM software must be customized to our specific needs? Would customizing the Travel Expenses software give our bank the market edge?
SaaS applications embody the best practices of hundreds or thousands of robust businesses that share 90% of the business processes. Most solid SaaS applications provide a level of configuration that should take care of an extra 5% of specific business processes.
On any day, nine out of ten business managers will prefer to have a working solution today that does 95% of the work, rather than wait twelve months for characterizing, prioritizing, designing, coding, testing and installing a solution that provides the 100%.
SaaS gives IT and the business:
- Freedom from hardware purchases
- Freedom from racking, stacking, configuring, installing.
- Freedom from the endless maintenance and firefighting
- Freedom from the upgrade nightmares
- Freedom to choose – SaaS almost always gives you free trials to play with before you make the heavy commitment
- Freedom to change your mind - if you are not happy, you can switch (yes, I know it is not simple, but at least in early stages you can do it with minimal damage while with on-premise software you are stuck with your decision for years)
- And that means freedom from long-term, substantial, financial commitments
- And finally, Freedom to say NO to the business units that absolutely insist on that extra feature that will be forgotten by the time it is implemented
I am surprised that in 2012 we are still having these discussions, but apparently the veteran CIOs are still around fighting to maintain the old world order (see my previous post on Democratization of IT).