SMEs ideally suited for adopting SaaS applications

SaaS as a business model and not just delivery model is catching up. While many people agree to the fact that SaaS has a lot on offer, there are many skeptics too who argue that it is yet to prove its mettle in a few areas like security, customization possible etc.

A different point of view would be to look at the target customer segment and see who is ideally suited to adopt this model. While some large organizations in different domains own and manage their own software, this is a trend mostly on the decline. Most of these organizations are seeing the benefit of outsourcing IT maintenance to established players who are best suited to do this while these organizations can focus on their core activity.

At the other end of the spectrum are the very small companies which can’t afford to own an IT department of their own, nor can they afford to invest huge sums of money upfront in acquiring software licenses. Even if they acquire a software for automating a particular business functionality, there are always other areas within the organization that are left out of the purview of automation. Often they are forced to buy different softwares that serve different purposes – one for accounting, one for their payroll, one for their email needs etc. The real problem starts here. These different softwares which are bought from different vendors have no integration whatsoever. The company is forced to hire an IT person(s) who can do the job of feeding the data into these applications as also extracting data from them. This IT person would then need to take the help of spreadsheets to prepare the reports that are needed for the management since these disparate applications from different vendors are not integrated. Often, this is a cumbersome exercise, most of the time leaving half-baked information on the CEO’s table while at others, providing wrong information.

Then there are periodic upgrades and patches to be applied to these softwares. All of these need a well trained and established IT department that can keep the information flow within the organization smooth, while having to grapple with software from different vendors and spreadsheets for collating and consolidating this information. All this leaves the organization grappling with problems that are outside their core activity.

This is where SaaS model takes the burden off the shoulders of the organization. There are no upfront costs involved in acquiring hardware and software licenses. They just have to subscribe to applications and start using them over the internet. While people who make use of these applications within the organization still need to understand the usage of the software being subscribed to, this is a lesser problem compared to maintaining a full fledged IT department. The role of the IT person also shifts from maintenance to that of strategic management of information flow and understanding the information needs of the organization.

Though, SaaS, just like any other technology which disrupts the market, could be received with some skepticism initially, the adoption rate is only going to increase in future. While, this is already evident in the way a lot of organizations are leveraging the power of SaaS based applications, SMEs certainly need more education and information dissemination to drive home the point.

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