Hi tech whitepaper_augmenting_value_saas_changing_business_eco-system_09_2010
- 1. Despite all the current challenges concerning the acceptance and adoption of on-demand, Software-as-a-Service (SaaS) solutions, TCS firmly believes that SaaS has the potential to be an increasingly viable alternative to traditional, on-premise software applications. Rapid changes in business dynamics and competitive landscape have enabled the SaaS way of IT deployment with global prominence and acceptance. Global players are steadily warming up to the paradigm shift that SaaS has to offer in the way business applications are developed,deliveredandconsumed. Moreover, SaaS’s market adoption is only bound to increase as the technology matures and the market broadens over time. Based on thisperspective,TCSoffersastrongvaluepropositionthrougharange of SaaS offerings to customers, including advisory services that help customers identify opportunities SaaS implementation as part of their application portfolio towards achieving economies of scale. Customers the world over have realized that SaaS is a potent tool towards reducing operational costs and improving sales and delivery efficiency. This paper outlines key business challenges and obstacles faced by SaaS Providers as well as Consumers and will examine how TCS can help overcome such challenges. It also emphasizes the different ways in which TCS can assist businesses/clients of all sizes in enhancing their SaaS capabilities to achieve lower TCO, quicker ROI, increased agility and an optimal subscription-pricing model. Considering the fact that a SaaS execution model poses significant business challenges for SaaS customers and partners, this paper also emphasizes key SaaS drivers/accelerators directed at addressing thesechallenges. This whitepaper is intended for all business domains irrespective of applicationportfolios. Augmenting the Value of SaaS in a Changing Business Eco-system
- 2. 1 Augmenting the Value of SaaS in a Changing Business Eco-system AbouttheAuthor JitendraMaan Jitendra Maan is a versatile IT professional with over 14 years of experience in the course of which he has successfully delivered solutions for a globally distributed clientele spanning various technologies. Jitendra, whose other interests include SaaS and Cloud Computing, is currently associated with theTCS HiTechTechnology Excellence Group, and furthers the group’s continued focus on various niche technologiessuchasmobileplatforms andRFIDtechnologies throughtheNTDGCoE. Jitendra holds a Masters degree in Management and Systems awarded by the Indian Institute of Technology, Delhi, and is certified in Project Management (CIPM) by the Project ManagementAssociates(PMA),India.
- 3. 2 Augmenting the Value of SaaS in a Changing Business Eco-system Table of Contents 1. Introduction 3 2. SaaS market penetration on the growth path 4 3. Key SaaS Challenges Faced by Customers and Vendors 5 4. Key Drivers for a Sustainable, Cost-Effective SaaS Model 7 5. Considerations for SaaS Partners or Vendors 9 6. Technical Considerations 12 7. Key Accelerators for SaaS Customers 12 8. How TCS SaaS Offerings Solve Customer Issues 13 9. Next Generation SaaS 15 10. Conclusion 16
- 4. Introduction In the face of an economic meltdown, ensuring capital savings, realizing faster time to market and reacting to changes in businesses (for example, the need for new offerings, threat from new competitors, and mergers) are the key challengesthatmostcompaniesseektoaddresstosustainandremaincompetitive. Fundamentally, Software-as-a-Service (SaaS) constitutes software delivered and consumed as a hosted service, accessed over the internet and managed by a SaaS solution partner. It offers an entirely new means of service delivery thatcaninitiateandsustainaparadigmshiftinthewaybusinessapplications(“Services”)aredeveloped,delivered,and consumed. Adoption of SaaS is on the rise across businesses of all sizes with both small and mid-sized businesses and large enterprises embracing the SaaS model. It is also gaining traction in new enterprise areas such as compliance management,securitymanagement,servicemanagement,governance,inadditiontocoreenterprise markets suchas Human Capital Management (for example, performance management), CRM (for example CRM-on-Demand), HR, Collaboration, Enterprise Integration (for example, Integration-as-a-Service) and others. The organizational role and significance of SaaS is constantly changing — many businesses now depend on IT to integrate their various SaaS solutionswithin-houseapplications. The true winners in the SaaS market will be those Vendors who deliver cost-effective solutions, spanning a hybrid environment involving both on-premise and on-demand applications/servicesthat can not only accelerate their time- to-marketbutminimizetheirtotalcostofownership(TCO). An interesting trend being observed currently is that established large enterprises have started to replace on-premise applicationswithon-demandapplicationsthatarebasedonSaaSprinciples.CIOswithavisionforthefutureviewSaaS as an enabler in the organization. Today, companies continue to increase their usage of SaaS across multiple applications,largeruserbasesandmission-criticalapplications. 3 Augmenting the Value of SaaS in a Changing Business Eco-system
- 5. SaaSMarketPenetrationontheRise Asa competitive and agilebusiness environment continues toforceorganizations tooptimizetheir IT investments and address the challenge of achieving more with less capital, the demand for SaaS is only likely to increase. SaaS, which primarily is an on-demand software delivery model, is a marked departure from the erstwhile industry standard: the time-sharingmodel. Generally, an organization’s IT department is under tremendous pressure to reduce costs to remain competitive. Acceleratedglobalizationinalmosteveryindustrysector—whichonlyservedtoincreasethispressure—furtherpoints totheneedfortransitioningallnon-mission-criticalapplicationstoSaaS-deliveredlow-costplatforms. ListedbelowaresomeofthebenefitsthatorganizationscanrealizeusingtheSaaSmodel. lReduceinitialcosts,inadditiontoongoingmanagementcoststhroughSaaS’ssubscription-feemodel. lLowertotalcostofownership(TCO). lRealizeshorterdeploymentcycles. lLowertheimpactonITresources. lReduceITcomplexityandoverallrisktobusiness. lRealize faster return-on-investment (ROI) through the adoption of industry-best practices enabled by a guided choiceofthebestSaaSsoftware,SaaSpartners/enablers,and/oracombinationofboth. lAchieve business agility through a flexible, scalable, multi-tenant architecture based on Service-Oriented Architecture(SOA)principles. lEnablequickerandeasieraccesstonewproductfeaturesandupdates. TCSbelievesthatthesuccessofSaaSofferingsdependsonhowearlysoftwarecompanieswouldchangetheirstanceon development and, by extension, their delivery platform. Cost being a key business driver, it is not surprising that companies, especially those operating in the Hi-Tech industry, have started offering a combination of full-service offeringsandmodular,small-scaleofferings Organizations, both large and small, are increasingly turning to the SaaS model for their business applications, since it offers time-to-value and platform independence; the latter feature of SaaS offerings are especially attractive to those customersthatplacegreateremphasisonsecurity,customization,andminimalintegrationchallenges. For SaaS, customer success is of paramount importance, since the popularity and proliferation of SaaS primarily depends on the degree of its adaptability to business needs.The means and ways to ensure customer success must be wovenintotheveryfabricofSaaS. 4 Augmenting the Value of SaaS in a Changing Business Eco-system
- 6. KeySaaSChallengesFacedbyCustomersandVendors The new, emerging SaaS market is an exciting opportunity for entrepreneurs and established software vendors. At the sametime,theSaaSmodelalsoposessignificantbusinesschallenges. lIncase of the SaaS subscription model, major challenge in the customer camp lies with revenue recognition. It is necessary tounderstand the matricesaround annual recurring revenue so that the true annual contract value may berealizedformulti-yearcontracts. lThe ability of IT departments to support business needs has become more challenging while the complexity of business application and the underlying infrastructure at each layer has increased exponentially. The real bottleneck lies in the fact that the current infrastructure supported at the customer’s end is not designed to scale welltosupportSaaSapplications. lDespite all the benefits of SaaS, integration seems to pose a major challenge to companies that plan to integrate SaaS applications with their in-house applications. It may not be much of a concern when choosing standalone SaaS applications, as they do not interact with other applications or back-end databases of the company. For example, a standalone on-demand CRM application will enable sales personnel to view and manage their day-to- day activities, but the major challenge lies in enabling the Sales Manager to establish a relationship between the sales staff data and orders/invoices entered in the core ERP applications. Integration is the source of most of the value when SaaS application is transformed into a company’s strategic asset. SaaS is not a permanent replacement to on-premise departmental applications but acts as a bridge to on-premise deployments for other applications, suchasHRsystems,legacycallcenterapplicationsorsupplychainmanagementsystems.However,insomelegacy environments, integration demands customization to the very core applications that can act as a disincentive to a customer. A more viable solution is to move such applications to SaaS and then integrate them with other on- premise applications. Recognizing integration as a major barrier to SaaS adoption, companies must consider alternatives by exploring products and solution accelerators currently available in the market that are tailored specifically to SaaS and legacy integration and are closely aligned to the SaaS business model. SOA based integrationsolutionsalsoaddresschallengesofthisnature. lIt is not an easy task to manage phases of the customer life cycle through an on-demand deployment. Traditional on-premise enterprise applications are likely to be hosted in their native customer environments. The overall customer life cycle is governed by services running outside their core applications (for example, CRM, ERP, SCM or SAP).InthecaseofSaaS,thereexistchallengesinhandlingsuchservicesaspartofenterprise businessapplications while each such service becomes an important touch point in the customer life cycle.Therefore, it is necessary that theenterpriseapplicationstrategyisdesignedtotargettheusagephaseofthecustomerlifecycle. lAnother major challenge toSaaS adoption is scalability of applications. Manysoftwareservicesare being designed as quick-turn projects, without sufficient to long-term maintenance and these services scale to handle a large number of customers and support more complex feature sets in the long run. Such problems have been experienced by various SaaS organizations in terms of data losses, unpredictable outages that are fundamentally not acceptable to business end users. Simply, scaling the application means maximizing concurrency and using application resources more efficiently. The most important challenge that an architect needs to deal with is the 5 Augmenting the Value of SaaS in a Changing Business Eco-system
- 7. need to offer flexibility in application architecture to meet SaaS business user needs. Sometimes, it is customary to scale the applications or products to improve overall availability and performance.The need of the hour is to offer anenterpriseprovensystemthatissufficientlyscalableandsecureformostmission-criticalbusinesstasks. lEach enterprise market that has adopted SaaS may have variations in their functionalities. Simultaneously, each company has variations in their requirements due to the nature of their businesses. In such scenarios, a one-size- fits-allapproachmaynotbeapplicable.Hence,managingvariationswhilehostingmultipleclients(Akatenants)on a single instance becomes challenging for SaaS partners/enablers. It is necessary to assess the degree of configurability andtheadequatelevelofcustomizationthatusuallybecomesabottleneckifnotaddressedintime. Forexample,severalsuchvariationsarelistedbelow. - Differentlookandfeel - Differentworkflows - Differentauthorizationschemes - Differentdataformatsanddatastructures - Differentdatasourcesandunderlyingdatabases lLack of meaningful, relevant service levels that are enforceable and measurable. There are scenarios where IT business processes are managed by multiple service partners, so it becomes even more challenging to define and measure the health of business processes using service levels. Sometimes, customers do not have stable business processes.Aslightchangeinthebusinessprocesswillhaveanenormousimpact. 6 Augmenting the Value of SaaS in a Changing Business Eco-system
- 8. 7 Augmenting the Value of SaaS in a Changing Business Eco-system KeyDriversforaSustainable,Cost-EffectiveSaaSModel UndertheSaaSumbrella,thereisafundamentalchangeinsoftwarebusinessparadigm,spanningcustomerrelationsto revenue recognition to rollouts. SaaS customers and service partners need to understand the new set of fundamentals inordertobesuccessfulindrivingacost-effectiveSaaSModel. DescribedbelowareafewguidelinesforcustomerstoensureasuccessfulSaaSstrategy: ChoosingtherightpartnerforSaaSenablement For seamless and smooth SaaS enablement, companies should recognize a partner, not a vendor, with the right set of skills and domain expertise. Moreover, the partner must be willing to understand the customer’s business dynamics so as to offer the right mix of functionality and features through SaaS offerings, and then build additional value around it with complementary features or components. Often, SaaS partners can achieve this through synergistic partnerships with other SaaS companies to deliver on complex integration (for example, multi-enterprise integration), data migration and on-demand infrastructure requirements (“cloud computing”) of the customer. Most often, complex services are not always an area of expertise for traditional software vendors. For instance, traditional software vendors may not adept at offering SaaS-powered hosting capabilities, large-scale data center economics, SLA enforcement, on- going application administration and monitoring, service desks, backups, and disaster recovery and data protection capabilities. TCSbelievesthatitisnecessaryforenterprises tounderstandtheSaaSarchitecturalmodels(on-premise,pure&hybrid) thatofferaright-fitsolutiontotheirbusinessneeds. Enforcingasubscriptionmodelbasedonusage:TruevaluepropositiontoBusiness SaaS service delivery employs a subscription/utility pricing model rather than term licensing. It offers immediate value to customers through“value first pay later”or“pay as you go”pricing models.The subscription pricing model should be designed in such a manner that it creates a win-win proposition to both the customer and the SaaS partner, since the customer pays on a per-use basis or for subscription-based usage metrics rather than access.This dramatically reduces the cost per user.They may disengage with SaaS services if they are not satisfied. Consequently, customers can ensure thattheyarenotstuckwith“shelf-ware.”Thisclearlymeansthatnewcustomersarenotrequiredtomakeahugefinancial commitmentupfront. On-premise application deployments typically require greater upfront costs, especially when comparing license fees with subscription fees. On-premise deployments typically also require hardware maintenance, upgrades, and support costsontopoflicensefees,whilemostSaaSdeploymentsbundlealloftheseintothesubscriptionfees. Negotiatingcontractualtermstoavoidunexpectedcosts It is not an easy task to build a contract for the SaaS delivery model. In SaaS deals, contractual terms are different from traditional on-premise perpetual licensing. Various hidden costs must be understood to negotiate deals with predictable costing terms. One key to success in this regard is to establish the right contractual terms with the SaaS partnerfocusingonthekeycontractualelementslistedbelow. ConsiderationsforCustomers
- 9. 8 Augmenting the Value of SaaS in a Changing Business Eco-system lSecurity,dataprotectionprovisions,andregulatorycompliance lPerformance,availability,anduptimeservice-levelsagreements(SLAs) lBusinessviability lIntegrationwithlegacybusinessapplications lDisasterrecoveryprovisions lExitclauses For example, emerging SaaS vendors such as Salesforce.com, Right Now Technologies, Oracle (Siebel’s CRM OnDemand) and NetSuite have relatively similar subscription fees for their CRM SaaS offerings, but widely different termsandcostsforuptimeguarantees,sandboxing,administration,andmaintenance. In a nutshell, a due-diligence study on key contract terms (as described above) should be carried out upfront to avoid anyadditionalunexpectedcosts. Evaluatingdifferentbusinessmodels:Anopportunityforrecurringrevenue In some cases, it is possible that a combination of the two models, that is, subscription-based services and a one-time license fee offers the best model for businesses.This can be an easy change to make, without significant impact to the software business plan unless vendors have committed to provide a certain level of value addition to the customer in termsofadditionalcontinuedsupport,ongoingconsultingorcustomization,frequentcomponentupdates,andsoon. Another approach is to restrict services to a license-fee model in addition to offering a menu of smaller offerings where components are individually priced and licensed. If the menu of options is sufficiently large, with frequent changes or updates, this can provide vendors with recurring revenues without any substantial changes in the software developmentbusinessplan,customerbase,orsalesstrategy. Ensuringsecurityanddataprivacy Adequate security safeguards are of paramount importance to customers when applications and underlying data are hosted by SaaS partners. In this regard, due-diligence by customers is necessary to ensure that the requisite security and privacy policies are being enforced by the SaaS partner. Customers need to ensure that critical data is protected from unauthorized access/use and that third-party data hosting centers provision world-class security at every level – physical, personnel, network, application, and data security (including authentication, encryption, firewall, and passwordtechnologies).Inshort,customersmayaddaprovisioninthecontract tocertifythesecuritycomplianceorto audit the SaaS partner for security compliance and data protection laws incase data is hosted in multiple geographic locations. LeveragingtherelationshipwithSaaSpartners Duringbusinessuncertainties,itisimportanttobuildandleveragetherelationshipwithexistingSaaSpartnerswhocan alsobeengagedinstrategydiscussionsandplanning. Ensuringlowertotalcostofownership(TCO) TCS believes that a typical SaaS solution should be flexible to accommodate the dynamic nature of business requirements and reduce recurring cost to clearly demonstrate SaaS’ advantage in terms of lower total cost of ownership(TCO).Accordingly,SaaSvendorswillneedtoensurecost-effectivenessoftheirsolutions.
- 10. ConsiderationsforSaaSPartnersorVendors SomekeyconsiderationsforSaaSpartners/vendorsdescribedbelow. Deliveringauniqueuserexperience:Barometertohighcustomersatisfaction A rich and unique user experience demands a distinct look and feel that is consistent with the branding needs of the organization. Availability of business applications and underlying systems play a vital role in delivering unique user experience. In the event that applications are unavailable to business users, their Business-as-Usual (BAU) is impacted, which in turn impacts their SLAs. Such a scenario can be a loss-loss situation for everyone involved. On-demand SaaS enablesthehighestlevelsofservice. Howtoensurehighcustomersatisfaction? There are various factors that contribute to achieving a high level of customer satisfaction in a SaaS project. Some of themarelistedbelow: lDeliverrichend-userexperience(understandend-usermetrics) lSetupacost-effective,responsivetiered24/7support lDeployskilledvendorsupportstaffwithdomain-levelexpertiseandproblem-resolutionskills lEnsureservicedeliverythroughbrandedvendor lEnsuresecureaccessanddataprivacy lAddressavailabilityandmanageabilityrequirements lRealizetherightbalanceofcustomizationv/sconfigurationprovisions lOptimizeperformanceandmanagescale Given the expansion of SaaS, TCS perceives that it would necessitate a radical change in current business model to deliverauniqueuserexperiencethatallowsbusinessuserstohavebettercontroloverIT. Settherightexpectations SaaS vendor partners need to set the right expectations at the very onset of the engagement. This can be easily achieved if the SaaS partner has a good understanding of the application portfolio. Sometimes, it is not possible to address complex value propositions over the web.Transparency, in such matters, builds the level of trust between the customerandSaaSvendorpartner. Stayfocusedoncoredeliverysolutions SaaS partners should primarily focus on core delivery solutions by recognizing the fact that SaaS is only a delivery mechanismthatservesasameanstotheend.Coreproductsorservicesshouldbesufficientlyfunctionalsoastoobtain repeat business or sustain existing contracts. It should be noted that standalone features and functionalities may not always be sufficient to ensure customer satisfaction and that it is the right mix of features and functionalities that the customerexpectsfromtheSaaSpartner. Managescaleandoptimizeperformance Scale and optimization depends on the nature of transactions/interactions. In the event that the SaaS partner faces a lack of skill sets pertaining to these requirements, it is feasible for the partner to outsource scaling and optimization needs to another partner/vendor. Moreover, the data center should be architected for maximum flexibility and 9 Augmenting the Value of SaaS in a Changing Business Eco-system
- 11. 10 Augmenting the Value of SaaS in a Changing Business Eco-system segregation to provide secure scalability on demand. SaaS partners can come under enormous pressure to ensure that applications scale to handle increased customer demand and ensure customer satisfaction. With this perspective,TCS hasaggressivelyrevampeditsSaaSofferingswiththreekeycharacteristics-performance,availability,andscalability. Onaccountoftheradicaltransformationofproductsandservicesfrombeinghostedonon-premiseplatforms tobeing offeredthroughhosteddeliveryservices,serviceproviderswillhavetoassumetheadditionalresponsibilityofensuring adequateperformanceandavailabilityoftheseapplications. Ensurethedesiredlevelsofcustomizationandconfigurability Withtheincreasingability ofSaaStosupportapplicationcustomizationandintegrationinSBMbusiness,itisimportant tocarefullyidentifyandassessthescopeofcustomization(howmuchandwhen)inconjunctionwithtimeandresource constraints. Offerflexiblepricingmodels SincecustomerscanchoosefrommultiplevendorstowardsadoptingSaaSofferings,vendorswillneedtoofferflexible, multiplepricingmodelstoensurethatthecustomerisretained. Enforcesecurityanddataprivacy The SaaS partner/vendor should explore all possible on-demand security solutions to safeguard each customer’s vital data and information. The SaaS partner or vendor should ensure that customer data is separated and secured. In the SaaS framework, there are different perspectives on security in the enterprise. Each of these perspectives is described below: lControl application access (who can access the tenant and where is the end user information stored and maintained,andsoon) lControlrole-basedaccess(whocanaccesswhichfeatureswithinanapplication) Fromthecustomer’sstandpoint,anon-demandSaaSdeliverymodelshouldideallyofferthefollowing: lScalable and robust multi-tenant architecture based on SOA principles (key decision point on designing enterprise businessapplications) lStandards-basedsolutionswithintegrationflexibilityorprovisions lAbility to support degrees of configurability and an adequate level of customization - collect, collate and configure meta-dataateachlevel lDatasecurity–fine-grainedrole-basedaccess lUniqueuserexperiencethroughrichUIandpersonalizedlookandfeel lTenantprovisioningthroughvirtualportalinstance lDataisolation-Keepingcustomer/vendordataseparatedandsecured lAdherencetoregulatorcompliance,securitystandards
- 12. 11 Augmenting the Value of SaaS in a Changing Business Eco-system Given that the current market is highly competitive and turbulent, the time to market and reliability are critical differentiators.There are numerous vendors in the SaaS offering space that claim to offer approaches/techniques that can employed at various stages of a typical SaaS maturity model to help organizations achieve faster time to market whileensuringhighquality. TCS,inparticular,hasforgedstrategicallianceswithindustryleadingSaaSproductvendorsandoffersSaaSsolutionsas aconsultingtoolkitwiththefollowingobjectives. lUnderstandandarticulatethekeyvalueofSaaSenablementinbusinessprocessesandsubprocesses lPerformduediligencetoevaluatetheneedforSaaSadoptioninbusinesses lAssessdifferentproductsandfeaturefitmentforSaaSenablement lRecommendthestrategyandoverallSaaSenablementroadmapfulfillingconsultingneeds - Lower Total Cost of Ownership by shifting ownership - Lower Capital & Operating cost - Reduce Time-to-market cycle and better ROI (Return On Investment) - Development-as-a-Service - Centralized authentication system - Reduced business risk - Reduce IT complexity - Pricing based on usage - Uptime as a key factor - Multi-tenancy based architecture - Democratized configuration - Integrated Service delivery Model and quick rollouts - Rapid Deployment cycles - Greater Flexibility & Ease of use SaaS Delivery Model
- 13. TechnicalConsiderations KeyAcceleratorsforSaaSCustomers Multi-tenancyefficientarchitectureisanimportantrequirementforweb-deliveredSaaSsolutionsaswellasenterprise- proven on-demand applications for customers/employees/ partners. However, building multi-tenant solutions requires that several technical challenges be addressed following which service providers can build and deploy scalable,customizable,manageable,andcost-effectivemulti-tenantsolutions. Multi-tenancyisultimatelyameansofachievingcostefficiency,giventhatitisprimarilyintendedtoreducethenumber ofdeployedinstancesandtoalignthenecessaryschema.Multi-tenancyensuresthatitischeaperandeasiertomanage a deployed instance and also minimizes the number of administrators required for the deployment. Consequently, differentlevelsofmulti-tenancycanbeviewedasarealizationofdifferenttrade-offpointsonthecostcurve. Aneffectivemulti-tenantarchitectureisdrivenbythefollowingfactors: lThetypeofcustomers lVolumeofdatapertenant lProjectedvolumeoftransactionspertenant lTypesoftransactionsthatthetenantswillgenerate(%Readvs.%Write) lCustomer-specificsecurityrequirements(dataisolation) lBIandreportingmodel lTenant-pricingmodelanduptimeSLAs Although the SaaS market is at its fledgling stage, it is nevertheless experiencing rapid changes. Considering the alienationoftechnologycompaniestowardsSaaSsolutions,suchsolutionsshouldbebasedonthefoundationofnext- generation web services and SOA to better address mass-customizable requirements from the customer. It facilitates businessagilityandbringsuniquenessataveryeconomiccost. There is a paradigm shift in the way software products or services are sold in the market; the entire focus has shifted from the sale of product/service to continuous delivery and deployment model. Since the internet is the underlying medium for delivery of mission-critical services, there are a number of important considerations that technology companies, especially those in the Hi-Tech industry space, will need to envisage before proceeding with enterprise- wideSaaSimplementation. lMeaningfulSLAstomeasurequalityofservicewithun-interruptedusage lSecurityandcompliancetoregulatoryandnon-regulatoryrequirements lAssessmentonwhetherend-userneedsarefulfilledonserviceusage/consumptionbarometer lRAS(Reliability,AvailabilityandServiceability)requirementsareaddressedupfront lAbility to support business needs by simplifying processes/tasks/functions at each layer of the infrastructure and businessapplications. 12 Augmenting the Value of SaaS in a Changing Business Eco-system
- 14. HowTCSSaaSOfferingsSolveCustomerIssues TCS believes that it is uniquely positioned to play a major role in SaaS Consultative Services and ensure that customers are ahead of the curve through its Cloud Computing focus and Co-innovation Network (COINTM).TCS COINTM is built on a strong foundation of TCS Innovation Labs, Technology Excellence Groups, anchor clients and strong strategic alliances. AtTCS,SaaSisoneofthefoundationalabstractionlayersoftheoverallCloudComputingTaxonomy. One of TCS’ Centers of Excellence has developed a comprehensive SaaS offering consulting toolkit that provides techniques/approachesapplicabletovariousstagesofatypical SaaSmaturity modelthatcanhelporganizationsbring applications to market faster while retaining high quality. This, along with our reusable components, helps accelerate thedeliveryprocess. TCS’ValueProposition TCS unique valueproposition lies with its SaaS consultingservicethatanalyzesthe“as-is”state of business applications, integration needs and underlying infrastructure with the objective to understand, analyze and articulate the key value of SaaS enablement in businesses and carry out a due diligence study to evaluate the need for SaaS adoption in businesses. TCS provides a variety of SaaS Customer Relationship Management (CRM) solutions based on flexible technology architecture, industry-best practices and business metrics. TCS onDemand CRM Solutions range from strategy to implementationtoapplicationmanagementtoservicesandsupportfunctions.Inaddition,TCScanevaluateandassess different products and feature fitment for SaaS enablement and offer recommendations on the “go-market”strategy andoverallSaaSenablementroadmapfulfillingconsultingneedsofITdepartments. TCSbelievesthatSaaSisanewcapabilityandadeliverymodelthatcanhelpcustomersindefiningtheirITroadmap.TCS’ expertise ensures that customers are delivered an end-to-end framework comprising SaaS enablement service offerings and also provides techniques/ approaches at every stage of a typical SaaS maturity model that can help bring applicationstomarketfasterwhileretaininghighquality. 13 Augmenting the Value of SaaS in a Changing Business Eco-system Domain Components ? Widgets, Mashups ? Dynamic Domain Engine ? Domain Specific environments Enablers & Frameworks lDomain agnostic Platform lCloud aware tools lIntegration and lData Migration Business Models ? Owned vs. Shared ? Pay-as-you-use ? SaaS Enabler Maturity Model ? Single vs. Multi-tenant Solution Delivery ? Cloud delivery Services ? Global Network Delivery Model ? Shared Services Support Model On Demand Presence ? IT-as-a-Service (Service Model for SMBs) ? SaaS CRM Solutions ? SaaS Platform BPO (Horizontal/Vertical Apps) TCS SaaS Model Characteristics
- 15. 14 Augmenting the Value of SaaS in a Changing Business Eco-system TheuniqueadvantageofferedbyTCS’SaaSconsultingservicesaredrivenbythefollowingcapabilities:- lSaaSConsulting:Thisspansactivitiessuchasperformingafeasibilitycheckoftheexistingproductarchitecturefor SaaS enablement, prototyping, and formulating the road map for a successful transition. TCS SaaS consulting services would help businesses/clients of all sizes in capitalizing the value of SaaS model driven by lower TCO, quickerROI,increasedagilityandameteredsubscription-pricingmodel. lArchitecture Definition Roadmap: This lays down the foundation for a robust architecture for a successful SaaS applicationthatisscalable,multi-tenantandconfigurabletoachievetheeconomyofscalecustomersareaimingby transitioningtoSaaS. lEnriched User Experience: This focuses on building visually rich, intuitive SaaS applications by employing industry-bestpractices. lDevelopment: Backed by TCS’ pioneering experience in adopting Agile Methodologies in a distributed environment, TCS’ SaaS solutions efficiently reduce customers’ time-to-market and shorten release cycles to enhancethevaluethattheydelivertotheircustomers,partners,andsuppliers. lSOAIntegration:IntegratingSaaSapplicationswithcustomers'otheron-premiseandSaaSapplicationsisalwaysa challenge, since they reside across a firewall.TCS has developed strong capabilities in buildingWeb-Services based integrationsolutiontoovercomesuchchallenges. lTesting: This includes validating the solution using experienced test engineers to ensure that the SaaS-based applicationisreadytomeetperformanceandsecuritydemandsofgeographicallydistributedusers/teams.
- 16. NextGenerationSaaS New delivery models based on SaaS platform, platform-as-a-service (PaaS), and other cloud-based delivery models, havebeengainingtractionontheirownmerit. TCS believes that delivering a credible set of SaaS-based offerings to enterprises will require collaborative innovations acrossdomain-specificplatforms,re-usablebusinesscomponentsandapplicationportfolios. In short, there has been a fundamental shift in the software consumption model: there is nowmore focus on outcomes throughcapacityrealizationandvalue-basedservicesarenowdrivingbusinesses. Blendofon-premiseandoff-premisecomputing A pragmatic approach involving a combination of on-premise and off-premise computing will ultimately prove to be themostlikelyscenarioformostlargeandmid-sizecompanies.SpecificallyintheCRMsolutionspace,SaaSpartnersare addressing customer requests with a variety of“on-Demand”deployment models like multi-tenancy, private hosting, hybrid deployment. Vendors like Salesforce.comTM, RightNow® Technologies, NetSuite® have been pioneers in the SaaS pure play market while traditional CRM vendors offer their own SaaS-based versions such as, Oracle® CRM On- Demand,SAP®CRMon-demand,Microsoft®DynamicCRMonline,andsoon. Various SaaS businesses involve widely different technology requirements, and sales and marketing programs.This is a compelling reason for customers to be hesitant when it comes to building a hybrid model of on-premise and SaaS offerings.Ahybriddeploymentscenarioisdepictedinthefollowingfigure. 15 Augmenting the Value of SaaS in a Changing Business Eco-system While adopting SaaS, companies should follow a modular and incremental approach to minimize the possibility and extentoffailure. Organizationsaremostlikelytodeployacombinationofoptionswhenitcomestosoftwarehosting: lHostedatthecustomer’spremisemanagedandrunbythecustomer;or lHostedbyaparticularvendorandaccessedviatheinternet MostSaaSprovidersshareacommonnotionthatonlinepresenceisnotpossibleforbusinessusersatalltimesandhave begundeliveringofflinevariantsoftheirapplicationstack. TCS believes in delivering on-demand business capability through“IT-as-a-Service”model, with an integrated suite of hardware, network and software solutions. More importantly, all the required technical, business and consulting services are provided in a “build-as-you-grow” or “pay-as-you-use” model through a combination of on-premise and sharedserviceshostedplatforms. Perpetual licensing Flat-fee based Metered subscription/ term-based licensing Isolated instance Per tenant Single instance multi-tenant Shared, multi-tenant, scalable, configurable Traditional Delivery Hybrid Pure SaaS
- 17. 16 Augmenting the Value of SaaS in a Changing Business Eco-system KeyFutureChallenges Someofthekeychallengesthatenterprisesaregoingtoface,aregivenbelow: lSaaS-basedapplicationsthatcanprovideafullyintegratedviewofbusinessapplicationsandsystems lCloud-baseddevelopment lMatureofferingsprovidingadvancedanalyticscapabilities lPersonalizationandcustomizedworkflow lBusinessProcessManagement Clearly,SaaSasadeliverymodelisfastsheddingitsnascentimagewithmanyorganizationsexaminingthepossibilityof employing SaaS for operational agility. Adoption of a cost-effective SaaS model is on the rise across businesses. Using SaaS, it is extremely easy to create an entirely new breed of products and services that deliver previously unheard of value to customers and this capability has been one of the significant pointers to the relevance, effectiveness, and sustainabilityofSaaS. TCS believes that Cloud-based SaaS offerings would play multiple roles in IT modernization efforts. Although the current challenges being faced by SaaS seem daunting, it can mature into a future-ready, on-premises application or a permanentreplacementforlegacysoftwareapplications. TCSforeseesmanyopportunitiesbasedonSaaSofferings,especiallyinthePlatformBPOSaaSspacethatoffersservices- based usage, instead of the usual number-of-seats-based costing terms characteristic of traditional BPO offerings deliveredtosmallandmediumbusinesses. TCS believes thatCloud-based SaaS solutions will cometobe recognizedas an increasingly viable option for enterprise IT. In the current market scenario, even though the benefits of early SaaS adoption are well understood, there still exist numerous reservations pertaining to SaaS’s capacity to support business needs, applications and underlying infrastructure. EarlyadopterswiththeinsighttoaddresssuchreservationswillreapSaaSbenefitsinthelongterm. TCS has launched a Cloud-based SaaS initiative to address such issues and has built a credible set of service offerings related to SaaS enablement. Further, it has also started engaging with its customers taking into consideration their strategicgoalsandobjectives. Conclusion
- 18. All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / information contained here is correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright, trademark and other applicable laws, and couldresultincriminalorcivilpenalties. Copyright©2010TataConsultancyServicesLimited About Tata Consultancy Services (TCS) Tata Consultancy Services is an IT services, business solutions and outsourcing organization that delivers real results to global businesses,ensuring a levelof certainty no other firm can match.TCS offers a consulting-led, integrated portfolio of IT and IT-enabled services delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development. A part of the Tata Group, India’s largest industrial conglomerate, TCS has over 160,000 of the world's best trained IT consultants in 42 countries.TheCompanygeneratedconsolidatedrevenuesofoverUS $6.3 billion for fiscal year ended 31 March 2010 and is listed on the NationalStockExchangeandBombayStockExchangeinIndia. Formoreinformation,visitusatwww.tcs.com. www.tcs.com To know more about how we help companies in the High Tech Industry overcome their challenges to achieve real business results, Contact: hitech.marketing@tcs.com Subscribe to TCS White Papers TCS.com RSS: http://www.tcs.com/rss_feeds/Pages/feed.aspx?f=w Feedburner: http://feeds2.feedburner.com/tcswhitepapers TCSDesignServicesM0810 About TCS HiTech Industry Solution Unit TCS’ HiTech Industry Solution Unit comprises of Semiconductors, Electronics, Computer Platforms & Services, Software industry and Professional Services. At TCS, we leverage our experience in EngineeringServices,BusinessProcessTransformation,end-to-end IT Solutions and Infrastructure Services to provide comprehensive solutions that will help the High Tech firms and manufactures accelerate product innovation, achieve operational excellence, attaingreaterprofitabilityandmaintainmarketleadership. Ourprovenconsultingcapabilities, Extensiveengineeringexpertise, and in-house innovation labs provide breakthrough transformation of product and service portfolios. Our recent investments include dedicated labs and infrastructure in support for convergence solutions, embedded printer solutions, storage optimization and High Tech Center of Excellence based in Eindhoven (The Netherlands).