The Internet has changed the way businesses are constructed: vertical integrations and home-grown systems are being steadily replaced by off-the-shelf solutions, SaaS integrations, and web-based workflows. Documents are no longer stored on a file server halfheartedly maintained by your IT department, they’re centralized in a document-storage site like Dropbox or Box.com. Productivity software is no longer something that lives on your desktop computer in your office, but rather on the cloud using Google Drive or Office365.
As the small, everyday tasks of business move to the cloud to improve the productivity of workers and IT departments, large everyday operations are also moving to the cloud to improve the efficiency of the business as a whole. Salesforce.com is the most obvious example of this, granting sales-focused companies access to world-class CPQ and lead management software at a fraction of the cost of having a system custom-developed, and without the costs of internal maintenance or IT departments.
By “outsourcing” functionality to SaaS-based companies, the focus can remain on what a business actually does well. There’s no reason for a company that manufactures and sells widgets and sprockets to spend time, money, and human resources on problems not related to their core business.
The continued growth in the popularity of SaaS has encouraged the development of entire new industries like SaaS-based billing. However, the nature of SaaS-based services is that the truly successful ones are purpose-built for integration. Salesforce.com wouldn’t be nearly as successful if it were difficult to push completed orders out of the software and into an order fulfillment or billing system. Google Drive wouldn’t be as successful if it couldn’t accept Microsoft’s proprietary file formats, take data from Wikipedia automatically, or export to machine-readable formats. Similarly, an enterprise SaaS company wouldn’t be successful if the product they sold was unable to integrate fully with other systems necessary for their client’s business to function properly.
Of course, some SaaS software isn’t mature enough for quick, easy integrations, and some companies just don’t have the time to do it for themselves. The SaaS middleware industry has sprung up to take advantage of this gap. It can be daunting to integrate multiple SaaS-based products with each other, keeping them all in sync and ensuring each system always has the data it needs to properly operate. Products like Boomi and Mulesoft exist specifically to address this concern.
Because enterprise SaaS companies take to heart the idea of focusing on what they do best, a SaaS services approach is often a double-edged sword. For instance, Salesforce.com doesn’t have any purpose-built software for physical order fulfillment despite the fact that they provide complex sales processes that result in a need for complex order fulfillment. However, no decision-maker worth their salt would see that statement and disqualify Salesforce.com from a selection process for CPQ and sales support systems.
The ability to focus on a specific vertical has vastly improved the potential quality of each piece of software. No longer does “best of breed” refer to megalithic software that performs a million tasks. Now, a “best-of-breed” system can simply be the best streaming music player, or the best CPQ system, or the best billing system.
The specialization of SaaS software needs to be in the forefront of any decision-maker’s mind when drafting requirement documents for new systems. It’s certainly possible that the current system does CPQ, physical fulfillment, billing, AND powers your web front-end. However, it’s unreasonable to expect an off-the-shelf SaaS solution to do all of those things. Remember, all these systems are designed to be interoperable. Because they won’t run on your servers in your datacenter next to your database, SaaS software by its very nature requires integration with other systems in a fluid and flexible manner. This should be the first, not the last, thing in any decision maker’s mind when attempting to replace or augment existing legacy systems. To be continued. . .