There has been little doubt about the short-term cost benefits to software-as-a-service. Now, Forrester Research has shown there are long-term benefits as well.
In a paper called “The ROI of Software-As-A-Service: A Total Economic Impact Analysis Uncovers Long-Term Value in SaaS,” Liz Herbert and Jon Erickson found that there, indeed, is long-term value.
They said that based on the growing size of deployments and the tendency for users to view SaaS more strategically than they had originally, “SaaS has grown far beyond its early roots of popularity” in applications such as Human Resources and Customer Relationship Management and has gained acceptance in a broad range of business and IT applications.
To determine if and when SaaS should be adopted for a particular solution, Forrester has developed a Total Economic Impact model that looks at the benefits, cost (hard costs and resources) and risks of deployment.
It’s quick. No doubt about that. SaaS allows companies to deploy faster and get users running more quickly than licensed software and the software doesn’t sit in the IT storeroom waiting to get loaded for each user. SaaS users also get upgraded more quickly and get access to new features on demand. This short time-to-value is one of the primary short-term benefits to SaaS that can continue to be improved over time as new features and capabilities are rolled out more easily.
What users, and Forrester, have learned over time is that SaaS versions of applications are easier to use partly because the Web interfaces are more familiar. This increased adoption can also be tracked, meaning companies can eliminate seats that aren’t being used, whereas they are stuck with the licenses they bought.
Technical support and other IT staff have been redeployed or reduced for most users surveyed by Forrester.
While SaaS costs are recurring, most licensed deployments have recurring costs in maintenance and support as well. Forrester found that SaaS is many cases in up to one-fifth less expensive.
Not all SaaS applications are created equally and risk remains as in any deployment. Forrester said not every package in a SaaS environment is one-to-one match that lets companies eliminate their own systems. Sometimes they must maintain these systems for certain special features or functionality. And because applications differ in the number of users to which they apply, the cost savings may not be as big for specialized apps used by small numbers of users.
