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Posted by Liz Herbert on November 9, 2009
Sourcing executives are setting their strategic direction for 2010 and beyond and increasingly asking: “What role should we play in SaaS buying decisions?”
Many sourcing executives see SaaS coming into their firms under the radar screen, through divisional, try-and-buy style purchases, often low-cost enough to go largely undetected – at least in their initial phases. However, they also see SaaS’ growing importance as a key strategic initiative in their firms and the trend towards SaaS becoming ubiquitous in the larger software market. Therefore, they want to better understand existing SaaS solutions that are being used in their firms today – where, when, why – and also understand when it makes sense to proactively push SaaS as the best overall solution based on factors such as TCO, flexibility, usability, IT staffing considerations, and upgrades.
Key considerations for sourcing SaaS include:
Maturity of the application area. Some areas do not yet offer mature SaaS solutions. Some application areas – like ERP and supply chain suites – do not offer comparable functionality as SaaS to what firms can buy on-premise. Significant gaps exist in areas like feature/function, customization/platform, and vendor maturity/vendor viability. This means firms may deploy point solutions in silos of functionality in these areas but are a ways off from being able to buy full suites from leading applications providers.
In 2010 sourcing executives will take a more active role in SaaS: harnessing existing SaaS contracts, actively investigating where SaaS should make in-roads for their organization, and working with business units to ensure SaaS makes business sense – for the short- and long-term – when it is brought in. Key areas of focus will include SaaS vendor viability assessments, security guidelines, and templates for assessing ongoing SaaS solution value.
Liz Herbert, Senior Analyst
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