Dispelling SaaS Myths
February 26, 2009
Many builders realize that now is the most opportune time for technology, as it is going to allow for more work to be done with fewer backoffice employees; create transparency and visibility into projects that may need to be monitored under new stimulus legislation; and help manage energy-efficient new homes or renovation projects.
While a plethora of reasons exist for builders to look to new technology now, many builders may find in-house platforms have high initial costs and take longer to implement. Many vendors recognize this concern and are pointing to the SaaS (software-as-a-service) model as the solution.
According to Larry Fiorino, president, Builder1440, www.builder1440.com, Baltimore, Md., builders need to focus on what they do best—building homes—and everything else can be outsourced. SaaS is one way to outsource technology, and Builder1440 offers its CRM (customer-relationship management) software, Sales1440, as a service.
For builders, this means no client or server software needs to be downloaded or installed in the home office. The software provider will manage and handle all the technical aspects of the software.
MARK SYSTEMS, www.marksystemsusa.com, Mount Holly, N.J., recently released IHMSWeb, which will bring enterprise capabilities to the Web in a SaaS delivery model. According to Don Scattergood, vice president, MARK SYSTEMS, the new product has the exact same functionality as its enterprise software, but builders don’t need to manage the technology infrastructure.
There is no doubt one of the biggest advantages of this model for builders is outsourcing the technology pain points to a service provider. But what is the pricing model? How long is the implementation time? And can it be integrated with other applications?
In a recent report, Gartner, www.gartner.com, Stamford, Conn., looks at SaaS assumptions with regards to pricing, setup time, and customization.
Looking at the pricing model, Gartner says SaaS is less expensive for the first two years of deployment since the applications do not require large capital investments for licenses or support for the technology infrastructure, but argues in-house technology offers a better long-term investment. Also, despite common assumptions, most companies must still commit to a contract in the SaaS model, according to Gartner.
Outlining the implementation timeframe, Gartner says the SaaS method offers quicker setup of simple requirements, but as with any delivery model it will still take a bit longer to do more customization, configuration, and integration.
Contrary to popular beliefs, SaaS can integrate with other data sources in two primary ways—through batch synchronization and through Web services. Also, in spite of misconceptions, SaaS can in fact offer highly configurable capabilities, but some gaps still remain for complex end-to-end workflows.
This model offers a less expensive option for the first two years of deployment and quick setup of basic requirements. For builders that are interested in more customized solutions, this model can still offer integration and custom options, it just might take a little bit longer to deploy.
The key for builders when looking at the different delivery models is to first determine their business process needs, and then choose the technology solution that best meets those needs. In this economic climate, the solution might be a SaaS delivery model.