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Adapting to software as a service (SaaS)

 With software-as-a-service contracts, the IT department gets to move away from the drudgery of application maintenance and support. Yet your team needs to figure out how to evaluate and manage these new arrangements.

In Summary

When a midsize business considers whether to rent its next software application, IT must get involved during the decision-making process.

Your team should evaluate the service provider on everything from performance metrics to security best practices.

Sketch out a plan in advance for bringing the application back in-house. If the application is a success, you may want to eventually manage it yourself.

So, your next big software project is on the horizon, and your business managers are leaning heavily toward business process outsourcing, i.e. renting, rather than owning, the application. As an information technology (IT) manager, you may be tempted to relax. After all, renting the software as a service from a third party means one less application for IT to babysit, right?


Part of the attraction to software as a service (SaaS) is that it lightens the load on a midsize company's often overstretched IT department and it can save an organization a lot of money on IT support and maintenance. However, do not hand off the application to a vendor without first doing your due diligence on the service and terms of the business process outsourcing, as well as coming up with a plan to manage the relationship long term. This might even require reorganizing your IT department or training your people for different skill sets around vendor and contract management. Having a well-defined SaaS management plan will also help if you decide to bring the application back in-house later.

As a partner with the business, IT can provide helpful counsel on SaaS decisions. In some cases, the best strategy for business process outsourcing is a phased approach. "The right long-term strategy might be to have an on-premise solution, but for rapid deployment reasons [a company] might decide to go with an on-demand solution in the near term," says Kevin Faulkner, product marketing manager for Microsoft Dynamics CRM in Redmond, Washington. "Microsoft offers the best of both approaches [with its Microsoft CRM product]: Rent with the option to buy. That combination is pretty attractive to midsize businesspeople."

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