Friday, June 20, 2008

Thinking about outsourcing some IT functions? SaaS is a big option.

Source : Click

CHARLOTTE, N.C. – So is contracting for outside applications such as e-mail, data management and sales through software as a service the right decision for your company?

Gary Griffiths, former president of WebEx which is now part of Cisco, offers succinct advice in answering that question – with a couple of key questions of his own:

“What is your company’s key competencies?

“What do you need to do in order to succeed?

“Once we’ve answered those questions, then let’s talk about how to off-load some of your distractions.”

Griffiths led a panel discussion Wednesday about SaaS in the second of two programs put on by WRAL Local Tech Wire in partnership with the Carolina SaaS Users Group. Against the backdrop of the field at Bank of America Stadium, Griffiths and representatives of five SaaS providers explained to a crowd of nearly 200 people the risks and rewards of outsourcing IT functions.

In addition to letting another firm managed “distractions,” be it sales force management or e-mail, Griffiths noted that executives also must deal with control issues.

“There is a fear of letting go,” Griffiths said of customers whose IT departments or c-level leaders. “The decision often comes down to control. Every SaaS vendor has faced that challenge to varying degrees, and there’s no question that these are relevant concerns.”

SaaS vendors don’t have all the answers, he added. In fact, to make a sale SaaS vendors must do their homework on potential clients then work with the buyer “to articulate what their needs are. Successful SaaS providers can put to rest customers; concerns.”

Both the customer and the SaaS provider also need to acknowledge a key fact if a relationship is to succeed, Griffiths added.

“You are buying a relationship, a partner” he said. “Typically, there is a long sales cycle for a SaaS customer, and a good part of that time should be spent on building that relationship.”

Panelists included Jane LeClair, a former director of Wachovia’s human resources support center, Igor Jablokov, CEO of voice-to-text technology startup Yap, Scott Schubert, CEO at AMT direct, Pete Mann, senior vice president at Authoria, and Corey Burnett, vice president of business development at Biopop.

Burnett echoed many of the points made by Griffiths. Biopop focuses on targeted bi-directional mass messaging, such as emergency alerts. Since the Georgia-based firm deals with life-and-death information, Burnett said client concerns about security and reliability have to be addressed in addition to control.

“You do see people who want their hands on everything,” he said. To help address those concerns, Biopop developed a service that includes locating gear at a customer premise.

Once concerns are dealt with, a SaaS provider then can drive home a sales closer: price.

“When a customer sees the costs involved with a SaaS project,” Burnett said, “the argument often turns in our favor.”