Features

SaaS Driving Faster Implementation and ROI Across the Enterprise

By Sophia Mayengbam

Adoption of Software as a Service (SaaS) has seen a phenomenal growth of USD 80 million in 2005 and is expected to grow to USD 501 million in 2008, according to Springboard Research. And the primary driver for SaaS adoption cost benefits, ease of use and business benefits.

According to another study by Aberdeen Research, SaaS, also known as on-demand or hosted applications is gaining traction in a number of enterprise application areas and making quick believers out of previous skeptics. The firm said that SaaS is changing how companies pay for, implement, and run their software applications.

According to Aberdeen research of 631 companies conducted from March-July 2006 verifies that the SaaS model is driving faster implementation times and quicker return on investment (ROI).

Aberdeen lists the implementation and the ROI time on the following sectors:

Customer Relationship Management (CRM): implementation in less than 2 months and ROI in less than 6 months
Supply Chain Management: Implementation in less than 3 months and ROI in less than 1 year
Sourcing and Procurement: implementation in less than 2 months and ROI in less than 1 year
Financial Management: Implementation in less than 3 months and ROI in less than 6 months
Product Lifecycle Management (PLM): Implementation in less than 6 months and ROI in less than 1 year

Microsoft said that it has seen a spurring strong demand for service providers forMicrosoft hosting solutions, driven by the advancement of the software as a service (SaaS) application delivery model.

According to another research by consulting firm Saugatuck, Small and mid-sized businesses (SMBs) are nearly twice as likely to use software-as-a-service (SaaS) for business-critical operations than large enterprises. The firm said that SMB executives are embracing SaaS as a business-critical, strategic investment at a much greater rate than are executives of larger enterprises.

The benefits of SaaS to SMBs, according to the firm, are:

Outsourcing expensive skills necessary for development, deployment, and maintenance of key applications
Provision of key infrastructure and capabilities as well as maintenance and upgrades without significant capital expenditure
Reduction of operating expenditures through flexible billing and payment

Beth Enslow, senior vice president of enterprise research for Aberdeen warns that the companies need to educate themselves on aspects on SaaS before implementing it.

"Although the value proposition of SaaS is seductive, companies considering SaaS need to educate themselves on a number of factors to make a solid buying decision," says Beth Enslow, senior vice president of enterprise research for Aberdeen and report author. "First, realize that all SaaS is not created equal."


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