|
Business Ourtsourcing with SaaS, a "perfect storm" of many forces, one of the most notable being the drive for efficiencies from specialisation. Human history and development shows that human advancement has been fundamentally linked to specialization. It is the concept that a service can be performed more effectively and efficiently by an organization or process setup to perform that specific task. SaaS is the current wave in the perpetual tide of progress of specialization. What is it about? Why? Read this article for an Introduction to SaaS It’s not about lower TCO, but SaaS is likely to provide that It’s not about low to no Capex, but SaaS almost definitely means that. It’s not about 24/7 access from anywhere, though you’ll probably get it. It’s not even about better data security & backup, better reliability, and more uptime, though they are benefits you’re likely to enjoy. SaaS is about the perfect storm of better technology, maturing customer demands, maturing of business process best practices, and the relentless drive for efficiency via specialization producing a solution that improves on the superseded traditional model in not all, but in many ways, and in many scenarios. Treb Ryan has a interesting take on the movements these factors have taken in his blog entry Cloud Hogwash. You can loosly combine the first two points under "cloud applications", and the fourth under "cloud computing". The factors are: - Technology can do it – web, UI, and internet technology has developed to a point where it is now viable to deliver a solution from a remote location anywhere businesses need it.
- Businesses demand it - they now see the benefit of, and want to outsource where it is not their core competence. This has been encouraged by success in other out sourcing areas.
- Commoditisation allows it – The explosion in all forms of communication, books, TV, newspapers and of course the internet, have allowed people to share information like never before. Some of this information covers business processes and best practices and it is this sharing of information that has led to the commoditisation of business processes beyond even what has been available in the Client Server era.
- Efficiency requires it - I expand on this below
Specialisation and Outsourcing Mining sites, military bases and hospitals can have their own electricity and/or water supplies, and they should because they have large, specific requirements, but I personally use the common electricity grid and water supply very successfully. Over time products and services become commoditised, you don’t make your shoes nor bake your own bread, but you still have shoes and bread, and they required fewer resources and lower opportunity cost, because they were manufactured by a process tuned for that specific purpose. SaaS & Specialisation Just as transport has moved from horses, to trains, to cars, to planes - so business process solutions have moved from, mainframes to internal hosting, to out sourcing (including ASP/MSP), to SaaS. The IT platform of the last 20 years has been very effective at helping us realize the potential of technology because of its versatility and flexibility. This Jack of all trades platform is and always will be needed, but some, and increasingly more of the processes we trusted to that platform are not suited to it anymore. Organisations directed at a specific process can perform with fewer resources and a lower opportunity cost Just as in the mainframe days, the requirements of the customer are too much for their internal IT departments to handle. With mainframesthe attraction was processing power, now it is amongst other things, mobility, reliability and manageability that make SaaS so attractive.
Where to next? SaaS is taking the processes that it enables closer and closer towards a commodity utility. This is maing the value proposition of SaaS too compelling for businesses to ignore. As Geoffrey Moore states in his book 'Living on the Fault Line', it’s only in areas that are mission critical and/or where a clear competitive advantage is derived that organisations should be looking at in sourcing functions and processes. SaaS adds enormously to the reliable ecosystem of offerings needed for that vision. References · |
