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| Home - Industry Article - May 07 Issue |
SaaS – Relegate RFPs to the Trashcan |
By Justin Benson, Senior Vice President of Business Development, Sales & Marketing, Intraware
On-Demand applications have changed the way we think about implementing and managing our infrastructure. Many organizations that adopt hosted applications cite the benefits of time to market, reduced internal IT resources, alignment of costs with benefits to the business, and the ability to easily add new users or even business units. However, has your organization tapped into the benefits as it relates to purchasing new technology?
It’s well known by now that “On-Demand” applications are implemented and managed in a very different manner to licensed or boxed product software. Many organizations that adopt hosted applications cite the benefits of time to market, reduced internal IT resources, alignment of costs with benefits to the business, and the ability to easily add new users or even business units. The list of benefits goes on and on.
Yet one of the biggest benefits of “On-Demand” applications is still being ignored – the ability to implement the service and fully understand what you’re getting before signing up for big six, seven or eight figure purchases. To put it another way, the benefits of these applications should reach all the way into the pre-sales arena. Yet, they often don’t and won’t until purchasers begin to rethink the way they procure software.
One of the challenges facing an organization is that for any particular business problem they’re trying to solve there might be ‘blended’ offerings. Company A’s solution is only sold as a hosted application, Company B offers only a licensed or boxed product and Company C says they do both. If in doubt – go to the trusty RFP process.
Yet RFP’s are expensive and time consuming for a potential buyer. Worse perhaps, they were designed to somehow try and soften the blow of committing to very large software transactions – a concept we noted above is now no longer needed. So, when presented with an admittedly troubling ‘blended’ market, CFOs and procurement groups fall back on a dated process that won’t allow them to take advantage of the new rules.
Many organizations realize that a critical component of success for any project is how well the internal organization adapts to the change accompanying any significant purchase. For example, Salesforce.com isn’t going to solve poor forecasting if the sales team simply refuses to forecast or update data because they aren’t held accountable. Given that many competing solutions provide similar functionality, the benefits of implementing a solid hosted offering within a confined set of parameters can be extremely helpful. It will help shine light on the internal challenges to success that in the past weren’t realized until it was too late.
Despite all the hype, most buying organizations are still sitting on the fence when it comes to purchasing licenses or on demand applications. We’re not saying ‘No’ and we’re not saying ‘Yes’. Without a strong philosophical belief in the benefits of one over the other they fall back on the outdated, incomplete processes historically associated with procuring technology.
One last thought – be wary of those companies that offer both a hosted and licensed offering. It’s tantalizing to have both. It’s very hard to do both well. It’s telling that some of the greatest success stories such as Salesforce.com don’t try. Also, some very large and well-funded companies such as Siebel couldn’t do both. Often the hosted version is a “teaser” for the full product. It might help to sign up for the teaser per my comments above. However, if ultimately you have to buy the licensed product to meet your goals, a hosted solution tells you nothing about how the product will integrate and run in your environment.
So challenge yourself and your buying practices. Move from “theory” (RFP) to “practice” (hosted offering). Get past the compelling (or bad) salesperson and meet the project management, account managers that will be there for the long run. Find out how often the service is running at less than optimum and how they handle it when it is. Just a little more insightful than, “Please list three compelling reasons for why you believe your product is superior to your competitors.”
Justin Benson is Senior Vice President of Business Development, Sales & Marketing for Intraware. In this role, he is responsible for developing Intraware’s go to market strategy for applying Intraware's existing technology to new vertical markets. In addition, he is also responsible for developing the SubscribeNet service customer base, oversees the company’s corporate and product marketing programs, and also holds responsibility for the development of the company’s strategic alliance relationships. Justin is originally from Australia and now lives in New England with his wife and two children. For article feedback, contact Justin at
Justin.benson@intraware.com
 
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