Business Strategy: How to Evaluate New Software Systems for Your Organization
In essence, you have three choices when selecting software:
1. You can upgrade your existing applications.
2. You can replace all of them with new software that provides better integration of what you have and need, and adds functionality.
3. You can replace some of your software and upgrade other parts, creating a hybrid.
You can do this in two ways:
1. Develop the software in-house or outsource it to a firm with expertise in your type of business.
2. Buy the software from a vendor.
Purchasing software once was fairly simple—you purchased an application, and it was installed on an in-house server and managed by your IT staff. There was a time in the not-too-distant past when software was not locally installed, but used on a large, central server as a “time share” that accepted certain code strings to retrieve the information. Today, time share has morphed into an acronym SaaS—Software as a Service. In essence, it means that your new software no longer resides on-site, but rather in a vendor-hosted environment. That does not, by definition, imply the host server is in the vendor’s office (which can happen and which is not good), but in a highly secure data center linked to your site via the Internet.
The option to migrate your business applications to SaaS has the following pros and cons:
• A lower cost of entry and initial ownership.
• Less overhead expense, as new hardware need not be purchased and older hardware need not be upgraded.
• SaaS systems are always on the latest version—to avoid upgrade headaches.
• New functionality is available when it is introduced by the vendor.
• Backups and business recovery are the vendor’s responsibilities.
• IT support is mitigated by not having to install and manage infrastructure.
• SaaS vendor security and service may not provide rock-solid recovery in case of failure.