Imagine that you want to build a house according to a specific budget and time frame. You have no construction experience, so do you hire an experienced contractor with a successful track record of building houses on budget and on time or do you forge ahead by yourself? Most people would choose the former option.
When it comes to deciding between implementing a software application in-house or using an on-demand service provider many organizations would follow the same rationale. In fact, research from analyst firm IDC predicts that spending on software-as-a-service will reach $10.7 billion by 2009.
This is a logical trend. In recent years, IT budgets have shrunk while demand for new business applications and network processes have continued to increase. Many organizations have chosen to outsource business functions to on-demand service providers that deliver state-of-the-art applications managed by subject-matter experts.
Questions to Consider
An on-demand solution has many benefits. It allows a company to rapidly deploy a software solution, expertly address business issues and realize fast return on investment.
But how does an organization go about selecting an on-demand service provider? Here are some tips:
1) Is there a clear cost/benefit advantage to using an on-demand provider versus doing the project in-house? You should expect an on-demand vendor to offer lower costs and better benefits (and risk mitigation) than an in-house project could provide. The potential for improved revenue, lower cost or better use of assets should be understood from the start.
2) Do you know what you are getting and when you are getting it? There should be a project road map that clearly describes deliverables and timelines.
3) Is there a single point of contact who has the authority to deploy any skill set needed to solve any issue (IT, technical, business)?
4) Is it a full-function or a limited solution? Make sure that rich function interfaces are deployable to the user locations where they are needed.
5) Can the on-demand solution handle different types of users? Business users are generally the focus. However, in the long term, you will probably find that you need ad-hoc or analytic functionality to provide continuous learning for technical users.
6) Does the vendor support a collaborative learning approach so that you can continuously improve your business/technical understanding?
7) Is the on-demand capability available as production software? Can you bring it back in-house if desired?
8) Can the on-demand solution change with your needs? Can you ask for customizations?
9) Does your on-demand provider have a service- level warranty that meets your business needs?
10) Does the on-demand vendor support industry-recognized security standards (Systrust, SAS-70) to assure customer data protection?
An on-demand solution should deliver intelligence to drive an organization’s business without the headaches and expenses often associated with the implementation of in-house applications. If an on-demand vendor cannot guarantee its services, then maybe it’s time to move on.
