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Enterprise Proven is the Pre-requisite for SaaS Business Portals

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CIO Magazine White Paper

  1. 1. “Enterprise-Proven” is the Prerequisite for Enterprise SaaS Portal Solutions :: market pulse :::: market pulse :::: market pulse :::: market pulse :::: market Cost effectiveness, security, scalability, ease of use and legacy integration are top requirements for next-generation business portals. Research conducted by CXO Media Sponsored by
  2. 2. :: market pulse :::: market pulse :::: market pulse :::: market pulse :::: market pul > Executive Summary There’s no doubt that portals of the traditional sort are yesterday’s news. They’re focused primarily on internal information-sharing and productivity gains. And more often than not, they’re implemented on-premise like many other first-generation technologies. But next-generation portals are heading in entirely new directions. They will become the platform for information integration and application consolidation, the launching point for internal as well as external collaboration. Embracing a more attractive service delivery option for the enterprise, they’ll be deployed through a Software-as-a-Service (SaaS) model. With this evolution, CIOs are raising the bar in terms of their expectations and a new class of portal solution is in order. “CIOs are demanding what we call ‘enterprise-proven’ solutions that reflect deep experience in large-scale deployments,” says Sam Jankovich, Chief Executive Of- ficer and President of EnterConnect Inc., a leading provider of enterprise business portals based in San Jose, CA. “These are solutions which offer the cost-effectiveness, low risk and scalability that this study proves are in demand.” A recent online poll by IDG Research Services quickly validates this evolution—and discredits old concerns about SaaS as a delivery vehicle. Gauging CIOs’ wish lists for next-generation portals, the research uncovers undeniable requirements for enterprise-proven solutions. Key findings include: • Critical business applications are driving SaaS-based portal adoption. • But when it comes to deployment, CIOs want a class of product that fits the enterprise. • The top attributes CIOs look for in such solutions include cost-effectiveness, security, scalability, ease of use and integration capabilities. The Business of Portals The enterprise portal is today’s most pervasive framework for integrating information, people and processes across organizational boundaries. Using a familiar web-based interface, portals aggregate and personalize information through application-specific portlets making it easy for users to share information and interact. These portals are being deployed for a variety of appli- cations to enable better communication, enhance productivity, promote collaboration, improve customer satisfaction, and, of course, reduce costs. According to a study by Framingham, Mass.-based IDG Research Services, information technol- ogy and business leaders obviously see and appreciate that value, with 70 percent indicating that their companies are currently using one or more enterprise portal solutions. What’s more, 40 percent say they plan to implement one or more new solutions; while 44 percent will replace or enhance existing solutions in the next 12 months. So what’s spurring such enthusiastic investments in portal technology? Today’s successes and 1
  3. 3. :: market pulse :::: market pulse :::: market pulse :::: market pulse :::: market pul The the promise of the future have enterprises itching for more. Traditional portals have proven their worth, but have been somewhat limited to specific one-off applications for internal constituents. EnterConnect Now enterprises are ready to branch out and transform their portals into much more. These por- Vision tals will prove instrumental to the corporate infrastructure as the platform on which they base all EnterConnect information integration and application consolidation. delivers on-de- “We’re talking about one platform solution that integrates your .com, your intranet, and your mand business extranet as well as other key business applications,” explains Jankovich. For example, a leading portals that telecom rationalized and consolidated more than 3,000 intranets and extranets globally into 50, empower even he says, while decreasing costs by more than $50 million. the most demand- ing enterprise Business Needs Drive SaaS Portal Deployment environments to As CIOs consider next-generation portals, they’re looking for a service delivery model that is in transform ordi- keeping with this vision of an information and application infrastructure for the enterprise. And nary operating they’ve got their sights set on Software-as-a-Service, or SaaS. results into ex- SaaS is a software deployment model whereby an application is hosted as a service and provid- traordinary gains ed to customers via a secure Internet connection. These days, it’s being used for everything from in productivity, accounting to sales force automation. The delivery model eliminates the time- and resource- e f fi c i e n c y a n d intensive task of installing and running applications on masses of computers. Thus, it’s easier to deploy and alleviates ongoing management and support burdens. SaaS reduces up-front revenue accelera- expenses, instead using predictable monthly service fees. tion. Putting our “enterprise “SaaS makes enterprise portal implementations easier—that is, easier to deploy more quickly to know-how” to more users and easier for users to learn and then leverage more effectively,” Jankovich reports. “It’ll make enterprise portals ripe for viral adoption across any number of key business applica- work, we enable tions—inside and outside the organization.” our customers to consolidate, This is exemplified by a very large Southern U.S. manufacturer, he says, which implemented a collaborate and SaaS-based enterprise portal solution to integrate 35 intranets and extranet—across multiple countries and six different languages—into its worldwide document management site and go-to connect— source for 13,000 employees. anytime and from anywhere. So, when it comes to next-generation enterprise portals, it’s no surprise that this burgeoning de- livery model is on the cusp of widespread adoption. In fact, 31 percent of the responding compa- nies are currently using or considering the use of a SaaS enterprise portal in the next 12 months. The SaaS Appeal A SaaS delivery model for enterprise portals has compelling business appeal. Cost reduction is the number one business priority for current or planned use of such solutions, according to 77 percent of respondents. A global wireless provider’s use of an enterprise portal demonstrates this savings potential. It was taking the company 45 minutes to onboard a new customer and activate a cell phone, Jankovich explains. But with a new portal platform that process was reduced to 15 minutes, off- loading 300,000 calls per month from the call center. Other drivers include enabling more effective communication, improving customer satisfaction, increasing employee productivity and improved security. One organization that has experienced these benefits is a major Chicago-based medical center, which deployed an information portal so 5,000 users—staff and physicians—can collaborate and share documents. That said, CIOs are deploying these portals in key functions or departments that stand to gain the most from 2
  4. 4. :: market pulse :::: market pulse :::: market pulse :::: market pulse :::: market pul such benefits, including Top Business Priorities Driving Current and/or Planned marketing and sales sup- Use of SaaS Enterprise Portal Solutions port, HR and employee self-service, knowledge Cost reduction 77% management and cus- Enabling more effective comunication 46% tomer self-service. Improve customer satisfaction 40% SaaS portals also have Increasing employee productivity 40% widespread appeal from Improve security and control access to information 40% an IT perspective. The Streamlining the management of digital assets 37% managed service Boost time-to-market/revenue 34% delivery model elimi- nates much of the Enabling employee self-service 34% Promoting easier collaboration management and cost among employees 31% burdens that plague Enabling employees to easily connect and collaborate with partners and suppliers 31% on-premise deploy- Enabling customers and clients to easily connect with employees 29% ments. And that means Improving project 29% the IT team can be management discipline more responsive and Enable better compliance management 26% devote more resources Other 6% Source: IDG Research, August 2008 to strategic imperatives. Indeed, 91 percent of respondents agree that the use of SaaS-based enterprise portals will enable IT to be proactive in its approach to solving business problems. An equally impressive number say these portals will enable IT to focus more on innovation and less on infrastructure and that they will have a posi- tive impact on efforts to align IT and business. “You don’t have to be an IT professional to manage the portal, so it’s the business folks that are keeping it up-to-date and driving productivity,” reports Jankovich. “And that means IT can focus on the mission-critical issues that keep the lights turned on.” “Enterprise-Proven” the Only Way to Go Most compelling, however, the SaaS delivery model has enterprise appeal. In terms of large-scale implementations, it trumps other delivery options on key issues that are vital to success. The potential benefits considered most critical by respondents include cost-effectiveness, low risk and scalability. But in terms of adoption, SaaS is still in the early stages of the hype cycle. And that begs some very important questions: Are today’s solutions enterprise-ready? Will they address the need for affordability and scalability? Will they present risk to the enterprise? “What CIOs really need for successful implementations are business-ready, out-of-the-box por- tals that work in their environment and meet their business requirements of cost-effectiveness, low risk and scalability,” Jankovich observes. That is, “enterprise-proven” solutions. And that means CIOs need SaaS portal solutions that reflect more than a decade of experience earned from large-scale enterprise portal deployments, with Fortune 1000 success stories to back them up. Which is why, respondents say, that when evaluating providers, the most impor- tant traits are proven experience in the enterprise space (89 percent) and vendor reputation (86 percent). 3
  5. 5. :: market pulse :::: market pulse :::: market pulse :::: market pulse :::: market pul Making the Grade Important Features When Evaluating/Considering CIOs are looking for vendors that can step SaaS Enterprise Portals up to the plate with solutions that make the enterprise grade. And they have very Cost-effective deployment 63% 31% 6% strong opinions about what that entails. Secure solution 54% 37% 9% Indeed, when evaluating or consider- ing SaaS enterprise portals, the features Enterprise proven systems (scalability) 51% 34% 14% respondents identify as critical or very Ease of administration important include: (business user level admin) 43% 40% 17% Infrastructure that can integrate 94 percent praise cost-effectiveness. Do- multiple services (PaaS) 43% 37% 17% 3% ing more with less is a familiar mantra for Availability to integrate with all major technology platforms 51% 26% 17% 6% any IT organization. CIOs already have Short upfront installation/ 29% 49% 17% 6% enough to manage with their infrastruc- training time ture; they can’t hire an army to manage Customizable solution 34% 40% 26% every application. They need solutions that can be rolled out and managed in the Open Platform 40% 29% 29% 3% most cost-effective manner. Critical Very Important Somewhat Important Not Very Important Ninety-one percent point to a secure solu- Source: IDG Research, August 2008 tion. For any critical business application, risk mitigation is of utmost importance— not only to keep data and business processes secure, but also for regulatory compliance. CIOs won’t knowingly put the organization at risk; and more to the point, they’re ready to go the extra mile to implement appropriate safeguards. 85 percent say scalability is crucial. SaaS portal solutions must scale, not just to the current needs of the business but to future needs as well. No business application looks the same today as it will 12 or 24 months down the road—not in terms of the technology infrastructure, the vol- ume of users, nor performance expectations. CIOs need to know that their investments will meet those needs, today and tomorrow. 83 percent cite ease-of-use benefits. Portals must be easy for the user to adopt—after all, the quicker the adoption, the quicker the time to realize the rewards. In addition, 78 percent point to ease in installation and training. It has to be easy for IT to get applications in the hands of the masses and get them up and running with as few resources as possible. 77 percent indicate that integration plays an instrumental role. Solutions must integrate seam- lessly with existing infrastructure and business processes, without force-fitting compatibility with legacy systems and the costly programming that often comes with traditional on-premise solu- tions. Simply put, integration must be easy, allowing for speedy deployment. Yet, all that said, respondents cite several reasons for not considering SaaS portals that directly conflict with the expected benefits and true potential of SaaS as evidenced in this study. For example, data security (34 percent), cost (31 percent) and integration (30 percent) top their concerns despite the fact that these features are also cited as business drivers in the adoption of SaaS enterprise portals—revealing a startling gap between what enterprises need from SaaS portals and what is (or what is perceived to be) delivered today. Bottom line: CIOs want what they want. And, according to this study, they want an enterprise- proven SaaS portal solution. That means vendors need to prove that their solutions are ready for enterprise primetime—that they are cost-effective, secure, scalable, and easy to use, and that they integrate with legacy 4
  6. 6. :: market pulse :::: market pulse :::: market pulse :::: market pulse :::: market pul infrastructure. And CIOs mustn’t be afraid to ask vendors the tough questions, nor demand proof of enterprise readiness. “The information technology leaders that responded to this survey are already asking those questions,” concludes Jankovich. “And they’re getting the right answers from the vendors like EnterConnect.” Activity-Based Metering: The SaaS Pricing Structure of the Future Not surprisingly, cost reduction is the top business priority driving companies’ current and/or planned use of SaaS enterprise portal solutions, cited by 77 percent of respondents. Rightly so, as SaaS service models deliver a more affordable solution than on-premise alternatives by eliminating many upfront costs and dispensing with the burdensome expense of ongoing overhead support and custom programming. Despite this focus on the promise of cost reduction, responses in the IDG Research Services poll in- dicate that there is much confusion surrounding the cost of SaaS portal applications. In fact, a full 71 percent of respondents are unsure of what a SaaS enterprise portal would cost per user, per month. And, for example, the $60/per user/per month fee they pay for applications like can be considered expensive—especially when much of the application’s functionality goes untapped and unneeded by users. “Today, you pay for it all whether you use it or not,” says EnterConnect’s Jankovich. But three- quarters of respondents strongly or somewhat agree that they should be able to pay only for the services and functionality they use. “An activity-based, metered billing approach like this would make SaaS portals more affordable and accessible,” he adds. “That may be advanced thinking today, but it’s certainly my vision of the future.” 5