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Government CRM Software


PUBLIC SECTOR SAAS (continued)

By Paul Greenberg
customer relationship management

SOFTWARE AS A SERVICE (SAAS)

Once the value of CRM to the public sector becomes clear, its time to see why using SaaS as a platform choice makes sense.

What Is It Again?

At its simplest, it’s a web-based hosted solution with, typically, a single code base that can be individually customized without any effect on the fundamental code. It also has a single architecture and a single data model, though this is being challenged in 2007 by several competitors claiming that separate instances of the application services can be called on demand (another name for SaaS) also. At this juncture, the more commonly accepted model is multi-tenant – multiple client implementations on a single instance of the services.

Back in the late 1990s and early part of this millennium, there was a different hosted model. Companies like Surebridge would provide a data center that would provide CRM applications – but actually the licensed on premise version that is typically installed on the site of a client. The pricing model was actually onerous. Not only would you pay for the appropriate licenses for each user or server but you’d also pay monthly (or quarterly or yearly) fees for essentially what was maintenance and operations.

This model was very costly, and not all that effective. It basically said, rather than buy a license and own that licensed instance, I’d buy one and then let someone else control it. While there was some overhead relief, you were paying for the license and the costs of maintenance that were typically more than maintaining it on premise. Your presumed benefit was that you weren’t responsible for the in-house maintenance and could free up your staff to handle “core competencies.”

At the end of the 1990s, that hosted services model became nearly obsolete with the advent of the subscription based (either per user or per server normally) pricing of the software as a service model. The license and maintenance was now included in the monthly fees – which, since they are consistent month over month, are also manageable because of their predictability. Finance officers love that. There are no real hidden costs either, because, if the customer has been smart, there is a service level agreement (SLA) that spells out the specific coverage and commitments they get for their monthly subscription price, including the remedies for problems when they occur.

The ability to manage this is increasingly interesting to federal agencies especially and several of them notably; the Commerce Department, the Military Health Service and The Defense Information Systems Agency (DISA) have adopted SaaS and have been vociferous public supporters.

But all in all, this is no longer just suited for courageous early adopters. In fact, according to marketing research firm, Input, in a 2007 study, the fastest growing segment of the federal outsourcing market is business process outsourcing and application services – the category that suits on demand services precisely – which is expected to grow 5.9% a year from $13.3 billion in 2007 to $17.7 billion in 2011. Couple this with a 2007 Cutter Consortium study that shows the 31% of all private sector companies are using SaaS and 43% more are at least considering it. The combination shows that SaaS is now not only a mainstream option for IT consideration but might even be THE mainstream option – for both private and public sector institutions.

Why CRM and SaaS Work So Well Together

CRM was the first program and system that SaaS was associated with because of the ability of SaaS to provide effective management especially in sales. Sales is where SaaS and CRM first mixed because sales is ideally suited for the on demand model because of a salesperson’s copious and immediate need for data as they travel to do their – which is to engage the customers and prospects that the company needs to continue to survive and grow. What SaaS was able to provide were multiple platforms to access that data ranging from competitive intelligence to customer records and order history.

SaaS’s big picture concept is providing what Jeff Kaplan, a senior consultant at the Cutter Consortium called, “functionality without the technology…and SaaS is increasingly making that happen.”

“Functionality without the technology” was reinforced in an article in Federal Computer Weekly on April 16, 2007 which took a somewhat different look at it. Mike Goodrich, the director of administration for Arlington County, Virginia’s Economic Development Dept., followed a similar train of thought, “We don’t have to spend a lot of time engineering it. We simply use it.”

What makes this remarkably valuable to CRM and all other IT related programs is that the time and budget that is traditionally spent on IT maintenance can be reallocated to other departments or programs. And that’s a good thing, isn’t it?

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