Software-as-a-Service (SaaS)

In document Introduction to Supply Chain Management Technologies (Page 78-81)

The robustness of today’s networking technologies have spawned a new industry directed at relieving companies of the cost and organizational burden of imple-menting cutting-edge software and network-building by providing major business system applications and technical infrastructure for a subscription fee. Computer systems, application software, networks, the Internet—all are fundamental tools that every business must utilize. Maintaining these tools, however, are normally outside the core competencies of most businesses. What SaaS basically does is pro-vide companies with the ability to lease software over a secure Internet-accessed network. Often there is little or no up-front investment required by participants.

The subscriber does not own, license, or even keep a copy of the software on its in-house systems. Rather, the SaaS company hosts the software and the related IT services, including upgrades and maintenance. In addition, the SaaS company can provide the network linking the client’s offices, homes, and operating locations to the data center. Finally, the SaaS company provides the licenses, implementation, training, system management, and user support necessary to ensure the subscriber receives the anticipated value. In return, the SaaS company determines payment on a subscription basis for an agreed upon period of time [11].

A new development in SaaS is the concept of cloud computing. While the ultimate definition of cloud computing has yet to be determined, there is little doubt that it represents the next major business shift in the IT industry and business computing.

In addition, according to the Aberdeen Group, cloud computing is emerging in con-junction with green IT and sustainability as major corporate strategies [12]. The idea, basically, is to realize the possibility of enterprise IT organizations meshing seamlessly an internal network “cloud” of applications with a public “cloud,” hosted by an inte-grator that charges on a pay-as-you-go basis [13]. This concept has been defined as

a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. [14]

Salesforce.com, a billion-dollar-a-year company, provides an excellent example of SaaS cloud computing capability. At the center of its cloud strategy is Force.com, the platform where Salesforce hosts its own sales force automation, customer service, and other applications, but also where subscribers can build their own applications using Salesforce’s programing language, APIs, and custom interface framework offered through the Salesforce online store, AppExchange. Since so much of the basic code for a needed application is already running on Force.com, it has become easier for developers to customize existing apps and write small, limited-function apps of their own. [15]

ERP: Going Mobile Today’s ERP systems are leveraging

communications technologies to allow users access to their ERP systems from anyplace, at any time. CDC sofware, a supplier of enterprise software appli-cations sells a new mobile application enabling users to perform real-time ERP inquiries via their Blackberry devices. The application helps increase the productivity of sales professionals and others by allowing them to obtain up-to-the-minute information regard-ing the status of customer accounts. It also allows executives to monitor the

progress of key accounts remotely.

Information that can be accessed via the Ross Mobile application includes: customer details, sales orders, sales pricing, accounts receivable aged summary, accounts receivable detail inquiry, current inventory, projected inventory, and order and shipping status.

Source: Renee Robbins, “Real-time

The range of EBS applications offered by SaaS companies varies and can range from companies like Salesforce.com (see Figure 2.4), which specializes in sales and customer relationship applications, to SAP and Oracle, which offer their entire suites of software products via the Internet. The decision to choose using a SaaS supplier requires companies to seriously think through issues such as business applicability, security, and cost. Historically, according to Murphy [16], transpor-tation management has been a significant user of SaaS, where companies need to stay connected to a complex network of carriers. However, other supply chain func-tions, such as demand planning, forecasting, collaborative planning, forecasting, and replenishment (CPFR), and GTM are being transferred to SaaS. Still, there are risks involved when using a SaaS company. One is the fear that vital company data will be lost or compromised. Then there is the issue of loss of control and possible system downtime. Still another is the IT effort necessary to integrating SaaS appli-cations into the company’s existing system model.

Companies looking to implement a cloud solution are confronted with several challenges. Foremost is understanding the scope of the business requirements, fol-lowed by assessing project ROI, overcoming a lack of internal expertise, and simply understanding with cloud computing actually does. In selecting a SaaS solution companies should use the following touch points:

Determine Requirements.

◾ What are to be the outsourced application(s)? How many users and locations will there be and what level of performance and support is needed?

Determine Technical Environment.

◾ What types of network connections and

client devices are needed? Is there any integration required with existing sys-tems and applications? What implementation and integration services will be necessary?

Evaluate SaaS Vendor.

◾ Evaluate potential partners with regard to their strate-gic direction, experience, technology infrastructure, depth of customer base, cash flow, and investors.

Evaluate Level of SaaS Services.

◾ Is the SaaS vendor certified, and does it have a

track record in the desired applications? What types of services are provided, including remediation policies for downtime, quality of security, network and bandwidth options, and backup and recovery capabilities?

Figure 2.4 Salesforce.com Web site.

Determine Level of Technical Support.

◾ Are there limits on the number and

type of support calls? What is the SaaS’s escalation policy? What are the days and hours of available service?

Evaluate Scalability and Control of Assets.

◾ Can the SaaS provider respond to

periods of peak load? Does the SaaS provider have control over its own assets, and if not, what guarantees does it offer? Does the SaaS have the potential to grow along with its clients?

Validate the SaaS provider’s Strategy.

◾ Assess the SaaS’s overall sales and service

strategy and commitment to the industry.

Some definitions of commonly used services to user. The organization owns and controls its infrastucture and appli-cations, which run behind a corporate firewall. The IT organization managers the virtualization tools, policies and workload deployment.

Hybrid cloud computing: A mix of public and private virtualized infrastructure and applications where work loads shift in and out of each sphere, in an automated way or not based on policies.

Public cloud computing: Infra-structure—including computers, storage and operating systems —and applications offered as services on a subscription basis. For example, Amazon.com Inc’s Elastic compute cloud service offers virtualized serves that users rent to run work-loads over the internet. The public cloud provider controls where the workloads execute.

In document Introduction to Supply Chain Management Technologies (Page 78-81)