Friday, February 27, 2009

The benefits and risks of implementing software as a service

The benefits and risks of implementing software as a service
By Andrew Hartshorn, partner and head of the ICT practice at law firm Shakespeare Putsman, and member of the Federation Against Software Theft’s Legal Advisory Group

Published: February 27 2009 09:33 | Last updated: February 27 2009 09:33

Software as a service is growing apace. It has moved from revolution to mainstream – McKinsey predicts that SaaS will represent 35 per cent of annual software budgets by 2011. Whether Charles Black, Nasstar’s chief executive, will be proved correct in his prediction – that by 2013 web-based applications in the workplace will make IT departments redundant – is yet to be seen.

However, in the current climate, SaaS is seen as a way to reduce costs and allow future growth without capacity constraints.

My view is that customers should see the SaaS model as being more akin to a managed service or an outsourcing contract than the traditional software licence model. In a managed service model, while the customer might develop their own business requirements and specifications which are priced and delivered by a managed service provider, with SaaS the provider has pre-developed the specification and the software and the opportunity for customisation is limited. As with any system implementation, businesses still need to understand their own processes to ensure that they can map to the SaaS service and gain full value from the implementation.

In the SaaS model, a software application (and particularly complex software such as Customer Relationship Management, HR and accounting packages) is hosted by either the software vendor or a third party and the use of the application is provided remotely to the customer over the internet. The host is responsible for the operational environment including the software and hardware, dealing with upgrades and patches and data storage.

The customer accesses the application using a client side application which may be bespoke or a standard web browser.

Rather than undertaking expensive and time-consuming software development projects, its proponents say that SaaS is ready as an off-the-shelf solution. The standard pricing model is based around annual fees either on a per-user or an enterprise wide basis which enables budgets to be managed on an annual basis without the need for major investment in the initial implementation.

Pricing models vary however with some providers charging for additional storage capacity over a particular level. Training may also be a chargeable item as may any specific configuration requirements of the customer.

With SaaS, the customer is not tied to particular hardware platforms for its installation of the software – instead the provider manages the hardware. If the customer wants to add a raft of new users, it merely ups the user numbers and pays the additional annual fees. Active monitoring of users’ requirements for the software is important to avoid spiralling costs for users who don’t need to use the software.

With the provider responsible for looking after the system, the customer does not need to worry about managing patches and upgrades.

With web access, many SaaS applications are always available from any location where internet access is enabled. Clearly in an era where many businesses are looking to empower mobile working, the provision of remote access to business critical applications such as CRM can be a valuable business tool.

The fact that the provision of a SaaS service does not require the physical presence of the provider at any particular location enables the development of market specific applications. Thus an Australian SaaS provider could develop a CRM application that is particularly suitable for, say, media companies. UK media companies would be equally able to access this application from Australia as they would a UK based application.

However, the benefits SaaS offer can also be interpreted as risks for businesses.

One challenge is the ceding of control to the SaaS provider. By asking the SaaS provider to manage the system, the customer loses control over the system. The customer is reliant on the SaaS provider to respond to faults and to decide when and how to implement upgrades.

In weighing up the pros and cons of adopting a SaaS approach, a customer must understand (as with a managed services contract) the fix times (and consequences of not meeting these fix times) offered by the provider. The customer will have no ability to manage the fix itself.

Nor is the customer likely to have any say over the functionality of new versions of the software implemented by the SaaS provider. With the standard software licence model (and even in managed services contracts) the customer would expect some degree of control over the timing of the implementation of new versions and could decide for itself whether the functionality provided by the new version merited an immediate upgrade or whether to continue on the current version. As with any business change, there are costs other than the pure IT costs of implementation of a new version of software.

A major consideration for any business considering implementing an additional or alternative software application is the cost of integration of the application into the existing ICT infrastructure of the business. This is no less true for SaaS solutions.

The integration may require use of specialist third party SaaS integration tools or the development of a bespoke solution.

SaaS providers also control the timescale for release of upgrades and new versions of their product. While reputable providers of SaaS solutions are likely to consider backwards compatibility, there is no guarantee that newer versions of SaaS applications will not require further implementation work for customers.

Whilst SaaS is sold as deployed offsite, it is sometimes necessary for the customer to concern themselves with deployment or upgrade of packages such as Java or other “add-ins” to ensure the smooth operation of the SaaS software. The customer will also need to ensure that they are using a consistent and supported version of their internet browser.

As with any offsite managed service, the customer in a SaaS service is reliant on the application provider to manage data security. While a SaaS provider is unlikely to leave a laptop with the customer’s data on the train, both the protection of a business’s reputation and data protection laws require customers to understand exactly how the provider will manage all aspects of data security.

Many of the cost benefits of SaaS are predicated on a “one size fits all” approach and there is likely to be little opportunity to require the SaaS provider to move to a data security regime different from its standard offering without pricing implications. Indeed, for smaller customers, the offering is likely to be on a take it or leave it approach.

As a minimum, the following aspects should be documented:

● Back-up processes

● Any ability of the SaaS provider to send data overseas

● Disaster recover procedures

● Exit provisions (see the section on exit below)

As with an outsourcing, the customer is at risk of diluting the skill set of its in-house team. However, unlike outsourcing, it is unlikely that any employees of the SaaS provider will move to the customer on termination of the SaaS contract, potentially leaving the customer with a skills deficit.

While customers may ask for support on exit (see below), as outsourced customers have sometimes found this does not necessarily equate to in-house expertise. While there is always a challenge and cost of moving applications, the loss of in-house expertise may add to the problems faced by a business looking to migrate away from a SaaS provider.

With a standard licence model exit should not be an issue – the customer is in control of the implementation and data and can carry out all tests that it considers appropriate to provide comfort that, once it switches over to the new application, it will not suffer any unmanageable teething problems. This is not the case with an outsourced service as the customer is reliant on potentially two competing third parties to assist in transition.

Any managed services contract should therefore deal with exit. A SaaS contract is no different. Whether the exit is planned or forced, the customer needs to know that the transition away from the incumbent provider to the replacement (whether in-house or third party) will be seamless and with as little interruption in service as is practicable. It is important to ensure that the SaaS provider is not able to switch off access resulting in the loss of business-critical systems before the business has an alternative solution.

The exit provisions need include the ability of the customer to recover its own data. While one would expect this to be a given, certain SaaS provider terms explicitly deny this right to customers in the event of non-payment by the customer.

Clearly there can be benefits of adopting the SaaS model. The pricing model offered by the SaaS community is clearly articulated and may, on the face of it, provide a clear saving over the equivalent in-house licence model. Some of the obvious benefits of SaaS (such as simple remote access) may also be persuasive.

As with any investment decision, however, businesses need to understand the total cost of ownership including the medium term costs and potential disadvantages such as loss of in-house skills. Understanding the risk allocation in the contract clearly forms a part of this decision.

Copyright The Financial Times Limited 2009

Thursday, February 26, 2009

Information is power in closing the energy gap

Information is power in closing the energy gap
By Joe Hemming, chief executive of Logica UK and a member of Logica’s executive committee

Published: February 26 2009 09:52 | Last updated: February 26 2009 09:52

We believe we have just 11 years to revolutionise the way we satisfy our energy needs – or we could be experiencing black-outs in the UK between 2015 and 2020.

As part of this process, the government said in October that all 47m meters in 26m homes and more than 2m business meters will be exchanged for smart meters by 2020.

Smart meters already exist and work well. They allow consumers to see exactly what energy they are using and manage their consumption intelligently. Suppliers get detailed insights into their customers’ behaviour and can offer tailored tariff packages. The suppliers most adept at using meter information will win market share by adding value to their offerings – and many people will try to save money by curtailing energy consumption and using appliances at different times.

Smart meters are a classic example of the power of information.

Information from smart meters and the communications infrastructure behind them could notify of boiler breakdowns, tell carers if a vulnerable person’s energy use changes or could turn on heating remotely. This new set-up will also underpin the shift to power from distributed microgeneration – such as solar panels, wind turbines and ground and air source heat pumps – back into the network, helping to cut the energy shortfall even further.

The sticking point for mass introduction is setting and co-ordinating smart meter communication standards, to ensure that barriers are not created to entry for potential energy suppliers, strangling competition or preventing consumers from changing suppliers quickly and easily.

We need a central body to agree an open information standard, so that the various ways smart meters talk to suppliers and consumers – by broadband, text message, radio or another technology yet to be invented – is irrelevant.

Open standards will transform the energy industry, allowing it to change at the fast pace of the communications industry. It will cease to be a commodity market and instead use meter information to tailor packages to suit the lifestyles of its customers, in the same way that telecommunications companies bundle services today. Energy packages will reflect the way we live and reward changes in consumption behaviour.

To meet the 2020 deadline, the central body will need to be up and running by around 2010, with full support from across the industry – generators, distributors and suppliers. The central function will be an efficient and effective way to focus co-operative efforts and free businesses to compete on value, as past examples ranging from financial clearing systems to the electricity industry’s own balancing and settlement body, Elexon, show.

We fully expect that when the Department of Energy and Climate Change (DECC) publishes the revised benefits case for smart meters, the numbers will prove to be compelling.

Consumer acceptance is not a problem. A Logica survey published in October 2007 shows that 77 per cent of Britons say smart meters are a good idea and 72 per cent would reduce their energy consumption if they knew how much they were using.

If the results of an initiative in Växjö, Sweden using Logica’s web-based technology are replicated, people mean what they say. There, 20,000 people use smart metering of electricity, water and heating. Personal web pages show consumption by the hour, comparing this with neighbours’ and other properties of similar size. Among those taking full advantage of the information they now receive, household energy use has fallen by up to 30 per cent. People are just as comfortable – but they have lower bills.

If, by 2015, around 30 per cent of consumers have committed to taking advantage of what smart meters offer, there will be a sufficient decline in demand to bridge the coming energy gap, to reduce carbon emissions and minimise dependence on foreign energy.

It’s no longer enough to turn down our thermostats by a degree or feel virtuous in the eerie glow of subsidised energy-efficient light bulbs. We need smart meters as a self-sustaining homeland insurance policy.

As national priorities go, few could be more important. We need to establish the central body for smart metering now.

Copyright The Financial Times Limited 2009

Tuesday, February 17, 2009

Krönung für das SAP NetWeaver Portal

Die e-Spirit AG stellt zusammen mit ihrem Partner HLP Informationsmanagement GmbH auf der CeBIT das zertifizierte Business Package for FirstSpirit vor (Halle 6, Stand J35). Der Vorteil besteht in dem vollständig integrierten Redaktionsprozess, der Redakteuren von der Content-Erstellung bis zur Publikation eine benutzerfreundliche Datenpflege erlaubt.

Einfache Datenpflege: Redakteur ohne SAP Know-How

Ein Redakteur kann sich auf die reine Erstellung und Pflege seines Contents konzentrieren, ohne irgendein Portal-Know-How mitbringen zu müssen. So erfolgt beispielsweise das Setzen eines Links auf andere Seiten bequem und komfortabel über einen Baumauswahldialog, selbst wenn im Hintergrund technisch komplizierte Portal-Verweise daraus erzeugt werden. Die Einbindung von Inhalten in die Portaleigene Navigationsstruktur ist vollständig gewährleistet. FirstSpirit unterstützt weiterhin das Rechte- und Rollenmanagement des Portalservers, indem die bestehende Berechtigungsinfrastruktur wiederverwendet wird. Damit wird es möglich, dass Redakteure Leseberechtigungen für ihre Inhalte festlegen, während der Portalserver die Einhaltung der Berechtigungen zur Laufzeit für jeden Anwender prüft. Um Arbeitsprozesse und redaktionelle Inhalte optimal kombinieren zu können ist es dem Portalredakteur nicht nur möglich herkömmlichen Redaktionsinhalt zu erstellen und zu pflegen, sondern gleichzeitig zuvor vom Portal-Administrator freigegebene Anwendungen (iViews) direkt mit FirstSpirit an beliebigen Stellen im Portal zu positionieren und zu konfigurieren.

Erweiterungen für das SAP NetWeaver Portal

HLP stellt auf der CeBIT zudem Erweiterungen für das SAP NetWeaver Portal vor, die die Funktion des Portals als zentrale Anlaufstelle mit rollenspezifischen, unternehmensweiten Informationen und Anwendungen unterstützen.

Darüber hinaus ist der IT-Dienstleister bekannt für seine zertifizierten SAP NetWeaver Add-ons bekannt, darunter das Business Package for Confluence Wiki (Unternehmens-Wiki für Collaboration), das Business Package for Portal Analytics (qualifizierte Benutzeranalyse im Mitarbeiterportal) sowie Portal Layout Tuning (zur optimalen Darstellung, Performance und Benutzerfreundlichkeit des SAP NetWaver Portals).

Referenzen

Das Business Package for FirstSpirit wird als technologisch führende CMS-Integration in SAP NetWeaver von zahlreichen renommierten Kunden eingesetzt, z.B. Bosch, Linde Gas Deutschland, Stadt Hagen, Wagner Tiefkühlprodukte, Merz und Knorr-Bremse.
17.02.2009, e-Spirit AG

Thursday, February 12, 2009

Information overload: moving away from the wisdom of crowds

Information overload: moving away from the wisdom of crowds
By R Lemuel Lasher, chief innovation officer for CSC

Published: February 12 2009 17:45 | Last updated: February 12 2009 17:45

We have gone from a world of information scarcity to a world of information surfeit. Valuable information gets lost in the noise of an increasingly crowded digital world in which everyone has more information than needed and, therefore, an urgent need for a point of view on what the information means.

I subscribe to only a small number of all the possible blogs and media websites configured for RSS feeds, and I receive more than 3,000 updates daily. How can I possibly manage to take advantage of all of this information wealth?

While I am an avid user of Amazon.com for all of my book purchases, I never rely on the book reviews for choosing a title. Anyone can post a reader rating for a book. I don’t know their background, qualifications, education, intelligence, or motivation, so how can I trust them?

I need a filter, and not a technological one. I mean a “conceptual” or “value” filter that acts as my trusted advisor. How do I know who to trust, and what is the basis of that trust?

The answer lies in an exploration of the philosophical principles that underpin much of what occurs online. Those principles can be characterised as democratic, communitarian, libertarian and millennial:

● The internet is democratic in the sense that it is assumed that the wisdom of the crowds will level archaic hierarchy and established institutional structures, by allowing a very personalised self-selecting inclusiveness to set new patterns of social, political and economic order.

● It is communitarian in the sense that the ethos of its “community”, non-economic contribution trumps the ethos of individual economic gain.

● It is libertarian in the sense that all progress is evaluated within the context of maximising “freedom” of choice, and “liberating” the individual from organisational and social constraints.

● It is millennial in the sense that a new world order is being ushered in through the revolutionary and broad-based product, service, social and political innovations that are enabled by web-based technologies. There is an abiding faith that this new world order will be an entirely different and better one than the world today.

These philosophical principles shape how we see events, and do reflect a dimension of what is going on; but seen without the proper context, they confuse the means with the end and ignore a dialectical view that will enable us to see more clearly what is going on and what the future may hold.

The basic construct of the dialectic includes three elements: a thesis, antithesis, and synthesis. The thesis is the established order, the antithesis is the force(s) for change, and the synthesis is the result.

A thorough review of history will demonstrate that this view, properly applied, is a much more reliable way of correctly observing current events, than seeing the antithesis, and confusing it with the synthesis. This is a mistake that has been made throughout history, particularly by individuals who are passionately participating as agents of the antithesis.

There is currently a bias towards an online democratisation as a source of wisdom, and trusted sources of insight are not clearly identifiable. We are in the nascent stages of this dialectical evolution, which will eventually produce a more traditionally structured digital world and evolve towards more traditional hierarchical models, with a representative democracy of elite and proven sources.

Instead of a pure manifestation of democratic vox populi in an uncontrolled blogosphere, might not the future be more like a representative democracy, with editors and peer reviewers filtering content for us?

The editors and peer reviewers will gain credentials through societally sanctioned processes and organisational filters, but they will all have one thing in common: they will reflect a more elitist or even aristocratic representation of wisdom instead of the chattering of the crowds. The current difficulties experienced by the established media have more to do with the betrayal of their brand and role as trusted advisors, than with the “end of journalism as we know it”.

The internet has provided a platform for the emergence of a highly democratised world, and far from having reached the end game, we are seeing the beginnings of a dialectical process. This is certainly something the US Founding Fathers would recognise, who feared and eschewed the wisdom of the crowds and much preferred the wisdom of the ages.

Copyright The Financial Times Limited 2009