Evaluate the tradeoff between fast implementation and the long-term cost of software acquisition. When in-house IT staff resources are at a premium, SaaS can be an opportunity enabler.

Business opportunities can be fleeting and fickle. Nimbly addressing the shifts and fluctuations in market demands can make or break a quarter, a year or a company. On-premise software efforts can take six months to a year to implement, while SaaS projects can be running in days and fully implemented within weeks. If the opportunity is short-lived, SaaS might allow a company to ride part of the wave with minimal investment. If the effort proves unsustainable, jettisoning SaaS-based projects can be easier and less costly than killing projects based on licensed on-premise software.

Grocery retailer C&S Wholesale, which uses acquisition as a growth strategy, had a data center relocation project waiting in the wings, and multiple internal sales and productivity efforts in place. It needed a comprehensive way to manage these projects, and quick.

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C&S, a privately held company with revenue exceeding $20 billion a year, considered an on-premise project portfolio management software package, but found that it required a minimum two-year commitment and a 180-day implementation cycle. The retailer instead selected a project portfolio management package from on-demand provider eProject. The application was in operation within six weeks, providing immediate dividends in improved efficiency, C&S Director of IT Madeleine Kerr says. "The timeline for implementation was crucial," Kerr says. "Within a couple of months we identified projects that had slipped to the bottom of the pile that needed attention, projects that weren't as important as we had originally believed, and a tremendous amount of time and energy spent in doubling planning activities."

Getting that immediate insight let C&S salvage some projects that would not necessarily have failed without the eProject software, but would have failed to achieve the ongoing attention necessary for optimum success, Kerr says. And, she estimates, bringing the same functionality in house would have cost twice as much as the SaaS solution.

Cost also was a factor in promotional products distributor Gemline's decision to use SaaS to manage the assets at its Lawrence, Mass., headquarters, its manufacturing facility in southern China and its mobile salesforce. "We've seen very rapid growth the past few years, but like any midsize company, we don't have an abundance of resources," says Director of IT Ben Messar. "There are some top-of-the-line products that have their place, but they are pricey and I didn't have the resources to dedicate someone to learning and running one."

Gemline installed Everdream asset management software in phases, starting with asset tracking to get comfortable with the platform, and progressing to software distribution, patch and antivirus management, and online backup.

The company will be able to implement the enterprise resource module as soon as it can document its technology resources across all its facilities. Messar estimates the Everdream SaaS-delivered software cost less than half the on-premise solution from Symantec subsidiary Altiris he'd priced at $50,000 plus the salary of an administrator to manage the installation.

Like Gemline, Gevity, a publicly traded company, has limited IT resources. The human resources services firm with 2006 revenue approaching $648 million must comply with regulatory requirements such as Sarbanes-Oxley as well as internal policies and procedures. Gevity sought an IT package to control and document the rollout of policy training particularly as it relates to antifraud measures. Gevity wanted a fast implementation without impact on existing IT demands. Though an SaaS solution seemed logical, company executives expressed concern about placing critical operations in the hands of a relatively unproven company, according to Gevity Vice President and General Counsel Eddie Hightower.

Gevity opted for Axentis on-demand governance, risk and compliance management software hosted by IBM, an arrangement Hightower says increased his confidence in the application's reliability and security. The Axentis software deployed within 30 days. Gevity began with policy, training and certification functions, and later expanded to include compliance tracking and regulation. "It is important under federal guidelines that the company not only talks the talk but walks the walk when it comes to compliance," Hightower says. "Not only do we now have a way to push out the information and training programs, but also a fully auditable trail to prove compliance."

The key component of the effort was to improve communication within the organization about new policies and requirements, providing a tool for organizing and distributing related information. The software also tracks end-user delivery to provide an audit trail.

Sometimes companies have little choice but to employ SaaS. Take, for instance, online advertising facilitator LinkShare. Its homegrown e-mail management system failed sporadically in early 2006, and in July, it was down for 18 days. A system replacement hadn't been budgeted, and the increasing frequency of outages threatened LinkShare's service levels. An on-premise package would take months to implement, and would only provide a return on investment after seven years, says LinkShare Director of Affiliate Services Avik Mohan, citing a LinkShare analysis.

Using funds from a contingency budget, LinkShare did a two-and-a-half-week pilot run with Kana's on-demand e-mail management software; implementation took a mere five days.

ASK YOUR CFO:
Can SaaS purchases be made from the operating budget or a discretionary fund rather than the capital budget to accelerate deployment?

Ask Your Department Heads:
Are we passing up opportunities because we don't have time to deploy adequate supporting IT resources?