The Challenges and Rewards of Enterprise SaaS

A new study identifies key trends in the enterprise Software-as-a-Service space, and how CIOs are adjusting to the fast-changing environment.

Over the last few years, organizations have turned to enterprise Software as a Service to address an array of challenges and drive greater agility and cost efficiency throughout the business. However, the path to results has been paved with more than a few challenges, including systems integration, data migration and security.

A new report from QuinStreet Enterprise (the parent company of CIO Insight) examines a variety of issues related to SaaS adoption, including the type of enterprise applications organization are using and how organizations of different sizes approach the issue. The study, which includes responses from 314 IT and business leaders (with nearly three-quarters holding titles of manager or higher within their organization) also found that several features appeal to organizations of all sizes.

One of the most revealing findings from the report, “2015 Enterprise Applications Outlook: To SaaS or not to SaaS,” was that organizations and CIOs are struggling to cope with the fast-changing environment. Big data, mobility and an overall acceleration of digital technology present new opportunities and roadblocks–and IT and line-of-business leaders often view things differently. While the former see it as a way to improve efficiency and take on a more strategic role, the latter view enterprise SaaS as a way to reduce dependence on IT and plug in technology in a faster and more flexible manner.

Not surprisingly, data management is a critical issue for everyone. The study found that organizations–despite a general enthusiasm for cloud–are generally slow to move data-centric applications and those holding a lot of historical data into the SaaS environment. Part of the reason is the complexity of data migration. Consequently, only 29 percent have migrated database and master data management into the cloud; 27 percent have tackled governance, risk management and compliance; and 22 percent have moved finance and accounting applications into the cloud.

On the other hand, newer applications that contain less legacy data are more popular choices for the cloud. The ability to start from scratch and avoid potentially complex system and data conversions is attractive to both IT and business leaders. For example, only about 43 percent of survey respondents are using an enterprise mobile device management application but more than one-half of these rely on the cloud. Other popular areas for enterprise SaaS include: CRM and contact centers (49 percent), marketing and sales (41 percent), enterprise resource planning (ERP) and supply chain management (35 percent).

Larger enterprises and SMBs approach enterprise SaaS differently. In almost every category, QuinStreet found that large firms lead in cloud adoption. For instance, the top three enterprise cloud applications for large enterprise were CRM and contact centers (63 percent), mobile device management (61 percent) and business analytics and big data apps (58 percent). SMBs, within the same categories, checked in at 46 percent, 36 percent and 35 percent. The biggest gaps exist in ERP and supply chain management (48 percent versus 22 percent) and governance, risk management and compliance (48 percent versus less than 20 percent).

Finally, the report found that organizations large and small are attracted to enterprise SaaS for the same basic reasons: ease of use for end users (84 percent), attentive customer service (81 percent), easy implementation (78 percent), an emphasis on application security (78 percent) and the ability to easily integrate an enterprise cloud application with existing solutions (78 percent).

Leading enterprise application vendors in the SaaS space include: Microsoft (84 percent), Oracle (64 percent), IBM (56 percent), Salesforce (51 percent) and SAP (49 percent).

QuinStreet editors offered advice to IT leaders on managing enterprise apps at a Google Hangout.

This article was originally published on 02-10-2015
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