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Software as a Service for the Enterprise

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  • 1. Software as a Service for the Enterprise Creating Value Faster A Faulkner Technologies Enterprise Software as a Service White Paper
  • 2. The Promise of Software as a Service Software as a Service (SaaS) is a software application delivery model with growing appeal to enterprise level companies. More and more, C-Level executives, Department Heads, and Project Leaders alike are adopting a SaaS approach to technology when looking for ways to work out a viable solution to their business and IT challenges. SaaS is designed to make what is sometimes a complex process simpler, changing the dynamics of how software is purchased, consumed and maintained, and is quickly becoming an effective IT delivery option. The Dynamics of Software as a Service The term SaaS has become the industry preferred term, generally replacing the earlier labels of “utility computing,” “Application Service Provision,” and “on-demand software.” The concept of SaaS is simple and engaging: rather than buying a software license for an application such as enterprise resource planning (ERP), or customer relationship management (CRM), and installing the software on individual computers or networks, a customer signs up to use the application in an on-line environment, which is hosted by the company that develops and sells the software, giving the buyer more flexibility in the software’s deployment and less frustration in maintaining the software over the life of that application. Using this strategy, software applications are able to scale from tens, to hundreds, or even thousands of users, while the growth and integration of that application is virtually transparent to the user. Essentially, SaaS solutions focus on delivering strategic value faster, and in a more controlled manner, than traditional on-premise or packaged software systems. SaaS enables organisations to meet their IT-related objectives by providing the following key features: Lower up-front costs More predictable costs during the life of the solution Faster implementation, up and running within a short period of time Easier to customise and integrate Always uses vendors latest technology; more seamless upgrade pathway No internal resources spent on maintaining systems. Businesses increasingly trust their most sensitive applications and data to Web-based service providers, and use SaaS applications to: Manage and build Web sites, intranets and collaboration environments Manage and store documents, images, video and other media Deploy communications networks Deploy core business tools in customer, financial and human resource areas Implement compliance, governance and risk management systems Create custom software solutions addressing internal and external business processes. SaaS is replacing on-premise software faster than anyone ever imagined, and is trusted across all enterprise segments. A Faulkner Technologies Enterprise Software as a Service White Paper
  • 3. Why Should Enterprises Companies Consider SaaS? Economic accountability and competitive advantage - At a time when organisations are confronting escalating budget and capital expense reviews, and an ever more competitive global marketplace, strategies that can overcome traditional software implementation challenges and gain value for the organisation faster are in high demand. SaaS strategies can assist greatly in reducing typical software deployment cycles, ongoing administrative and maintenance frustrations, higher- than-expected operating costs, and lower-than-expected return on investment (ROI). Leading edge development and depth of offerings - In nearly every software category, the growing interest in, and adoption of SaaS by corporate users is inspiring an incredible level of product development in both new and more established vendors. There are SaaS alternatives to every applications market including, office/collaboration, project management, document management, and databases as well as whole verticals such as Customer Relationship Management, Human Resources, Enterprise Resource Planning and Finance. The growth of SaaS is driving technological change with software vendors having to figure out newer and better ways to address the demand from organisations for cheaper, more reliable, faster-to-deploy, and higher quality software. This means that companies have a whole new range of options at their disposal where the desire to establish market presence by vendors will ensure a very unique value proposition as vendors vie for leadership positions, a situation that generally equates to greater value being realised by the purchaser. When to Use SaaS in the Enterprise When time is short, or when prototyping ideas for a group or department When costs need to be clearly defined and controlled, based on actual users (which initially may be low), as opposed to a large licensing strategy typically thrust on companies When scalability is unclear early-on, or when other stakeholders are involved, e.g partners, suppliers or customers. Short Timeframes and Prototyping Issues are sometimes so time-critical that they cannot wait on a normal IT process—they must be resolved in “30 days or less”. SaaS-style solutions are generally very quick to get running by comparison to their on- premise counterparts, which is especially important if you are prototyping ideas for wider deployment at some point in the future. BUSINESS VALUE TIMELINE 7 Days 15 Days 30 Days IT VALUE TIMELINE 30 Days 6 Months 1 Year A Faulkner Technologies Enterprise Software as a Service White Paper
  • 4. Business issues and IT issues don’t always co-exist happily, because of differing timelines in creating value. Friction happens when you try and push short-term business issues through a long-term IT process involving specification, resource allocation, testing, piloting etc. The goal of SaaS is to create a new IT Value Timeline that ensures value is created for business issues that require a fast, effective resolution. SaaS ADDS VAUE HERE NEW SaaS – IT VALUE TIMELINE 30 Days 6 Months 1 Year By providing highly functional software over the Internet as a service, SaaS-based strategies can reduce several cycles that would normally extend the time of getting to a successful outcome. Cost Control – Value for Money Implementation and Maintenance Example - Customer Relationship Management (CRM) Software (200-seat license) Cost Comparison Total Cost of Ownership (TCO)/$Thousand Software on Software as a SAMPLE SaaS Source of Savings Premises Service Reduced deployment time, limited Implementation/Deployment $108 $72 customization, self-service through - Customization, integration on-boarding scripts - Basic infrastructure testing, deployment $54 $0 Requires no infrastructure and - Application infrastructure $30 $0 application testing testing, deployment Lowers training requirements Ongoing operations $101 $34 through simpler user interfaces; - Training self-training, service capabilities Management, customization Requires no ongoing business $94 $0 of business process change process change management Data centre facilities rental, operations; security, $750 $0 Includes vendor’s costs to serve in compliance; monitoring of incident resolution subscription price (ongoing operations, back-end hardware and Software software) - User licenses, $480 $1,500 subscriptions, maintenance Provides 99.9% general-server Other $308 $0 availability; reduces unused - Unscheduled downtime $92 $0 licenses by 20%; users added as - Unused licenses needed Total costs $2,017 $1,606 * The McKinsey Quarterly, Web exclusive, May 07, Delivering Software as a Service, Abhijit Dubey and Dilip Wagle In this example, the customer experienced a 20% overall savings via implementing a SaaS-based solution over an on-premise option. Essentially, the points of savings are achieved in the testing, training and customisation areas, as well as in data centre or local network maintenance. A Faulkner Technologies Enterprise Software as a Service White Paper
  • 5. User License Controls Several computer-industry experts say that, globally, companies have purchased billions of dollars worth of software that they don't use - "shelfware" in IT parlance - inspiring forward-looking CFOs and CIOs to change the way they plan, purchase, implement, and monitor computer software. When Charles E. Phillips, managing director of enterprise software at Morgan Stanley, asked 300 CIOs whether they had unused software licenses, fully one-third said they had unused database licenses, 12 percent said they had unused CRM (customer relationship management) licenses, nearly 20 percent reported unused ERP (enterprise resource planning) licenses, and just over 10 percent reported unused SCM (supply-chain management) licenses. In a poll conducted by AMR Research of 42 companies that use SCM (supply chain management) software, a whopping 85 percent reported using only one or two modules (SCM suites typically contain a dozen or more). Of 60 companies using procurement software, only a third told AMR they would use it for direct procurement, the software's raison d’être. And of 100 companies using CRM software, AMR found that most had implemented less than half their licenses. According to Gartner Research, 41.9% of CRM licenses purchased worldwide go unused—just one example of how companies often invest heavily in software that is not utilised or, perhaps more commonly, under-utilised. Organisations frequently buy software licenses for everyone in the organisation because they are concerned about compliance or, more likely, because they do not have insight into which applications are actually being used—or used enough—to justify ownership of the licenses. SaaS-based strategies provide a tremendous amount of benefit in the control of user licenses, most notably because you are only paying for licenses for people who actually have an account on the system being used. The concept of buying advanced licenses is not part of the SaaS world. Application Scalability Two challenges that have always plagued on-premise software applications are that of scalability and integration. In regards to scalability, the discussions will always work their way over to “so how much new hardware do I have to buy to get this new software application running?” to which the most common answer is “well, it depends”. When you purchase software that you are then going to install in your own premises or data centre, you are now responsible for selecting the correct hardware, keeping the hardware and software up to date, and ensuring that you have enough computing power to deliver that application to all of your users. This can be a challenge, especially when all you are really trying to do is get a business challenge resolved. A big advantage of a SaaS strategy is that it doesn’t force you to wear the responsibility for the product’s installation, computing power or long-term maintenance. SaaS allows you to quickly scale capacity, both up and down, as your user requirements change, and it changes the economics of computing by allowing you to pay only for capacity that you actually use. A Faulkner Technologies Enterprise Software as a Service White Paper
  • 6. Success with SaaS in the Enterprise Over the last several years, Faulkner Technologies has been involved in a range of SaaS projects. For the most part, these projects had the following key drivers: Packaged software was not available Internal development resources were not readily available Time was critical The challenges were cross-departmental and in some cases, involved both the company and stakeholder collaborations. Users and access frequency would vary dramatically – heavy at certain times of the year with regards to access frequency, and unknown user growth rates early on in the project. Three of our most successful stories are highlighted below: Intellectual Property Management - Queensland Government is one of the larger state governments in Australia, investing a tremendous amount of time and resources into its operations, creating a significant amount of intellectual property (IP) in the form of copyright, confidential information, designs, patents, plant breeder’s rights, and trademarks. Its primary challenge was managing the IP assets at a department level, while providing broad public and cross-industry access to certain aspects of those IP assets, securely and confidentially. Faulkner Technologies created an on-line IP assessment and management solution to register IP assets, and manage the licensing agreements associated with the IP assets created through the deployment of ElasticApps technology. The solution is delivered using Software as a Service and is licensed on a monthly per user basis. New Products and Services - Rowland has a rapidly evolving Crisis Preparedness and Training Practice, which is experiencing significant growth opportunities based on an increase in industry awareness of crisis management as a critical business function. Using a SaaS strategy that included ElasticApps Rowland has been able to extend their capabilities to incorporate the distribution of crisis management knowledge as a Web-based managed service. The creation of an on-line crisis preparedness and management system has capitalised on key intellectual property held by Rowland. The system itself is designed as a framework based on the Rowland methodologies and is easily custom fitted for each customer’s particular needs and working environments. Industry Best Practice - BSES Limited is the primary knowledge and research source for the 8,000 farmer/member sugarcane industry, an industry that is widely distributed in both location and in the access to technologies that can improve business practises. BSES is charged by its members to increase the competitiveness of the industry and the dissemination of real-time information and analysis. Utilising ElasticApps and SaaS BSES has been able to provide open access to decade’s worth of research and best practice knowledge as a Web-based managed service and is now able to provide online, real-time assessments of farming techniques and viability, making industry best practices and new technical and agricultural innovations available to all farmers For more information on these and other cases in which Faulkner Technologies has successfully used its SaaS product technology to capitalise on business enterprise knowledge, visit our site at www.faulknertechnologies.com/clients A Faulkner Technologies Enterprise Software as a Service White Paper
  • 7. Summary of Key Points Software as a Service (SaaS) is designed to make what is sometimes a complex process simpler, changing the dynamics of how software is purchased, consumed and maintained, and is quickly becoming an effective IT delivery option SaaS is provided through an on-line environment, which is hosted by the company that develops and sells the software, giving the buyer more flexibility in the software’s deployment and less frustration in maintaining the software over the life of that application SaaS solutions focus on delivering strategic value faster, and in a more controlled manner, than traditional on-premise or packaged software systems When to use SaaS in the Enterprise • When time is short, or when prototyping ideas for a group or department • When costs need to be clearly defined and controlled, based on actual users (which initially may be low), as opposed to a large licensing strategy typically thrust on whole companies • When scalability is unclear early-on, or when other stakeholders are involved. Business issues and IT issues don’t always co-exist happily, because of differing timelines in creating value. Friction happens when you try and push short-term business issues through a long-term IT process involving specification, resource allocation, testing, piloting etc. The goal of SaaS is to create a new IT Value Timeline that ensures value is created for business issues that require a fast, effective resolution Key points for cost savings when using a SaaS strategy are achieved in the testing, training and customisation areas, as well as in data centre or local network maintenance SaaS-based strategies provide a tremendous amount of benefit in the control of user licenses, most notably because you are only paying for licenses for people who actually have an account on the system being used. The concept of buying advanced licenses is not part of the SaaS world SaaS allows you to avoid the responsibility for the product’s installation, computing power or long- term maintenance. SaaS allows you to quickly scale capacity, both up and down, as your user requirements change, and it changes the economics of computing by allowing you to pay only for capacity that you actually use There are 1000s of successful examples of SaaS in enterprise companies providing a wealth of knowledge and security for making SaaS buying decisions. A Faulkner Technologies Enterprise Software as a Service White Paper
  • 8. A Specialist View - Faulkner Technologies – Enterprise SaaS Software as a Service for the Enterprise is different from traditional Software as a Service because of the level of customisation that most Enterprise solutions require, as opposed to the relatively low level of customisation required by small and medium business where SaaS solutions first emerged. Essentially, there is the traditional version of SaaS delivered by vendors, such as SalesForce.com or Google, where people go to one location and everyone uses the same product. However, if you require heavy customisation, or unique systems integrations, then you will have to consider more of a platform or tool-based Software as a Service approach. Such a tool is our ElasticApps product, which allows you to create the software you need using on-line editing tools, and then have that software delivered to you as a service. The major benefit of a product like ElasticApps is that it allows most IT software solutions to be defined by business people and subject matter experts using normal language, as opposed to using software code. This means that you can define what you need on a whiteboard or in a Mind Map as in the example below, write it up in a document that people can actually read and understand, and that becomes the basis for building an ElasticApp, which means that you won't spend months building complex specifications and use-cases to gain value from the solution. ElasticApps are built entirely on-line using drop-down menus, and drag-and-drop features, so that you can quickly configure business processes, adding reports and search features as well as interacting with other services throughout your business, or even connecting to other SaaS products. The end solution is able to be tested and modified in real time, meaning that the solution is available in a fraction of the time of traditional software applications. Once constructed, business processes can be deployed individually, or grouped together. Each business process is guided by a set of access and distribution rules that protect the business process, and ensure its proper usage. When finished, the business processes are delivered over the Web, via a secure, Software as a Service framework, which means that you can start using the applications immediately, and be ensured of safe delivery, data backup, and storage, as well as maintenance and upgrades, all based on actual users and demand. The broad nature of defining business processes and applications using questions, answers, events and actions means that you can use the same software application to construct a range of solutions within the same organisation. You can create individual systems around functions, such as compliance and risk, or customer and sales performance, which operate as their own individual applications, or you can group them into whole systems, which can anchor the entire organisation. A Faulkner Technologies Enterprise Software as a Service White Paper
  • 9. Why Faulkner Technologies? Faulkner Technologies’ extensive development capabilities and data management expertise, coupled with its software solutions, make it an ideal partner in solving the challenges experienced by government in implementing software solutions. We have a continuous product roadmap focused on enhancing our products and services; we carefully control our fee structure, and diligently deliver quality support to our customers. Our customer support agents understand not only the technical requirements of our on-demand applications, but we also understand the business implications of our solutions, and how they can affect our government customers. Key elements of our SaaS platform and capabilities: We host all of our ElasticApps software products for customers worldwide We provide around-the-clock technical support from our data centres We provide automated data backup of customer files and systems from remote locations We utilise high-end data centres to deliver SaaS solutions to our customers. These data centres: • Have 19x 1 Gigabit Ethernet Internet connections. • Feature ample uninterrupted power systems (UPS), air conditioning, and power generation backup systems. • Contain over 20,000 state-of-the-art Windows and Linux Web servers, making them the World’s largest dedicated Web hosting provider. We protect customer data with a variety of industry best practice security tools and methodologies, including: • Role-based security on all modules • Single Socket Layer (SSL) encryption • Servers located in secure facilities with access control and 24-hour access • IP Tables-based dynamic firewalls on all machines • Intrusion Detection • Denial of Service (DOS) protection across all IP address ranges • Virus and Spam protection on all servers. To find out more about Faulkner Technologies, visit www.faulknertechnologies.com A Faulkner Technologies Enterprise Software as a Service White Paper