BrainTrust Query: Is Software-as-a-Service the next step for the intelligent enterprise?
Lets face it: retailing is a tough business. The multi-channel world has provided customers with more shopping flexibility than ever before - not only with alternate ways to make a purchase, but high levels of product and price information for comparison shopping.
As a result, the customer has been put in charge of his or her own destiny, and no longer must accept shortcomings that result from retailers' internal struggles. These challenges, such as multi-channel inconsistencies, inadequate customer service levels, and out-of-stocks are closely scrutinized - and poor performance brings the immediate punishment of lost sales. Retailers of any size must now reconcile a dilemma: better customer service and cross-channel consistency, versus the pressures from top management and Wall Street to keep prices down and improve store execution.
Small- to mid-size retailers, due to a lack of IT resources, have a particular challenge in this area. But, according to industry research, these retailers may be taking to heart the concept that maximizing the customer experience does not have to come at a high cost to the enterprise.
One possible answer that's emerging is on-demand, Software-as-a-Service (SaaS) IT processes. According to research group IDC, key characteristics of the SaaS architecture include:
- Network-based access to, and management of, commercially available software (i.e., not custom)
- Activities that are managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the web
- Application delivery that typically is closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics
Traditionally, IT management has been plagued with difficult to understand IT software, and a hard-to-quantify return on investment. This has lead many IT managers to half-jokingly proclaim their desire for an "on-staff PhD" to make heads or tails of existing processes. The SaaS model, however, seeks to change this paradigm. Gone would be the days of "power users" charged with helping the organization digest new software processes. The SaaS model delivers an on-demand, web based atmosphere accessible to all parts of the enterprise. This allows for the management of a single set of data, customized at the user-level.
Software-as-a-Service can be employed in many places throughout the enterprise. One of the most effective places for on-demand solutions, however, is within business intelligence processes. Industry research has shown that only 20 percent of small- to mid-size retailers have any sort of business intelligence processes at all. This is attributable to the fact that business intelligence solutions require lengthy deployments, and a complicated, multi-tiered architecture. As a result, retailers, consumer packaged goods manufacturers, and others are struggling to centralize data analysis solutions within their organization, extend analysis functionality to all ends of the enterprises, and allow users the flexibility to customize their own reports.
There is no clear, end-all solution to solving the traditional retail conundrum of high touch versus high efficiency. What there may be, however, is a way to think differently about how IT operates within an enterprise. Does IT drive business processes, or do business processes drive IT management? If the answer for an organization is the latter, then IT must respond to the needs of the customer. Software-as-a-Service may be just the tool retailers need to manage this response, while still preserving crucial company resources.
Discussion Questions: What does the future hold for on-demand, Software-as-a-Service IT? Is this technology likely to take off, or is it just another IT fad? Does your organization currently use on-demand technology, and how has your experience been with the technology?