Want SaaS? Get Integration First!

Software as a service (SaaS) is one of the fastest maturing segments in the IT sector. According to analyst firm Forrester Research, SaaS adoption grew more than 50 percent from 2007 to 2008. SaaS offers simplicity of software management, reduces capital and operating costs, and offers access to a broad range of value-added services. It is therefore no surprise to anyone that SaaS is rapidly being adopted as the preferred software delivery model.

In fact, industry watchers like Gartner, IDC, and Saugatuck Technology forecast:

• By 2010, 65 percent of all businesses will have at least one SaaS application deployed-enterprise clients will deploy an average of seven (Saugatuck)
• Ten percent of the enterprise software market will be pure SaaS in 2009 (IDC)
• Twenty-five percent of enterprises will be SaaS in 2010 (Gartner)

The benefit of SaaS applications is based on their ability to deliver immediate value through quick and easy deployment. SaaS customers expect speed and quick time to production. However, this is exactly where a cloud looms over SaaS.

In order for SaaS to live up to its true potential, seamless integration with existing technology investments and databases is critical. But in reality, this is often not the case. As a recent survey by Forrester showed, 65 percent of IT managers recognize integration issues as the top barrier for SaaS adoption. IT departments expect seamless integration with existing solutions, but SaaS vendors do not have the tools necessary to meet expectations.

Partnering with an on-demand integration provider delivers the most ROI possible for SaaS investments because it removes the need to create new application silos, redundant data stores, or hard-wired connections. On-demand integration services take integration objections off the table, allowing SaaS vendors to address the question completely while remaining focused on their core business offering. From a business point of view, integration makes sense because the speed and simplicity with which a vendor is able to address the integration question ensures that it will stand apart from other competitive offerings, creating a true differentiator and competitive advantage. This ensures faster sales cycles and a better customer relationship, as well as the ability to deepen existing relationships over time.

However, integration has its own pain points. Often integration providers offer simplified mapping that does not reflect the complexity of business processes or the uniqueness of each interface. For true integration and partnership with SaaS vendors, it is necessary to go beyond the simplified do-it-yourself technology for building connections or costly installed software packages or hardware appliances. Rather, integration providers need to:

• Take on a full service approach. Integration needs to be delivered as a service that requires no additional investment in staff, resources, or technology. The integration solution must simplify the process by eliminating costly hardware and software expenditures and reducing the amount of IT staff needed to manage the integration infrastructure, allowing the SaaS application vendor to focus on core business.
• Provide full integration no matter the SaaS offering. Companies understand the importance and value of aligning SaaS applications with their existing business systems and processes. Customers often find out after sealing a deal that integration costs an additional percentage of the entire deployment budget. As a result, customers are increasingly becoming keen to understand how SaaS vendors can tap into key systems, such as CRM, inventory, or accounts receivable, to seamlessly integrate into existing systems. In addition, customers frequently ask to see the SaaS application working with their internal data in the proof of concept phase, necessitating the need for pre-planning.
• Provide true connections vs. pre-configured mapping. SaaS integration needs to manage and maintain multiple connections as business processes and equipment change. At the same time, integration should ensure seamless connections despite incompatible formats, multiple firewalls, and disparate IT systems.
• Allow for rapid integration. The deployed solution needs to be future-proof. Integration services should scale to meet growing business needs that allow for system upgrades and new integration practices without internal system upgrade hassles or having to train staff.
• Allow for fast on-boarding of customers. As enterprises grow and take on new clients, fast on-boarding is vital to business success. Synchronizing and validating data in real time, managing ongoing changes without disruption, and addressing the variability that comes from integration is of the utmost value and should be part of the offering.
• Allow for unique real-time business processes. Providers should be able to enable real-time business processes, special handling requests, bi-directional information flows, as well as any and all exceptions that customers may require.
• Remove manual processing. The deployed solution should be automated, eliminating the need for one-off or ad hoc point-to-point integration efforts that are distractions from the core business.

True business connections unlock the full potential of SaaS integration, creating deeper integration among customers and trading partners. As a result, SaaS providers can say "yes" to their customers despite disparate business processes or incompatible IT systems. It's time that SaaS vendors seriously consider the importance of removing data integration barriers to tackle the Achilles heel of SaaS.

About the Author

Robert Pease is vice president of marketing for Hubspan, a B2B integration services provider. For more information, visit http://www.hubspan.com.

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

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