Abstract
In today's competitive business environment, information systems are not a luxury; rather they are vital for survival. A new generation of ISs has been established on cloud capabilities. Moving toward software as a service is not the goal in a business, and if not implemented properly, competitive advantage may even suffer. Managers and change agents should undertake deep study over SaaS implementation before migration. In this chapter, the main elements and features in which CEOs and IT managers should consider in evaluating the SaaS migration option will be provided, and enterprises may be acquainted with the concept, goals, and theoretical foundations of SaaS as a main cloud-based service in the business environment. On the other hand, businesses should undertake some necessary changes in the operating circumstances which are utilization of a proper and modified business models established over a knowledge base strategic movement. This will lead enterprises to achieve the main goals of migrating to SaaS and cloud platforms (i.e., agility, competitive advantage, and innovation).
TopIntroduction
Information Systems as Carr (2004) states appear to be like electricity. Publicity and essentiality of electricity forced managers not to depend on electricity for their strategic decisions, and so is true for ISs. Carr argues, “When a resource becomes essential to competition but inconsequential to strategy, the risks it creates become more important than the advantages it provides” (2004, P.11). Traditional desktop ISs are more or less known for more than three decades, and managers are following new routes to the quality, timeliness, and effectiveness of information flow for gaining competitive advantage. The main disadvantages of traditional desktop ISs are high costs, implementation difficulties, and information blockage. The arrival of the Internet has extended the way ISs can perform, however network-enabled Information Systems have been in use for more than two decades. Now there is no need to pay heavy costs for Information System implementation and license purchases. “Cloud Computing” emerged a new generation of ISs, i.e., “Cloud Information Systems (CISs)”. With this new phenomenon as Martin (cited by Geelan, 2009) explains, there is no need for new IT structures, user training, or licensing procedures; on the other hand and at the same time the company will benefit from increased IT capabilities and capacities.
NIST’s1 definition of Cloud Computing (2011) implies that every application that uses the internet as a tool for enabling “ubiquitous, convenient, on-demand network access” (Mell & Grance, 2011) to shared computing resources, data, information or services, can be grouped in the Cloud Computing Model. To name a few Cloud Computing services offered since far, we can point to Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). These so-called Cloud-models have moved business IT to a new era, which is based on hybrid and virtual worlds. This chapter attempted to guide managers and change agents through choosing and using the SaaS model in the new Cloud-era. Feasibility and suitability of SaaS and CIS will be studied in different business environments, and SaaS business maturity models will be explained. Change as a vital element of implementing the SaaS model will be described and few delivery methods to SaaS implementation challenges will be offered as well. Thus, this chapter can be a guideline toward SaaS-migration.
Importance of SaaS
SaaS has been modified, explained and defined by almost any expert in the field. However, the most known definition of SaaS explains that any application running on the cloud platform enabling consumers to run the program on a thin-client (Internet browser) or a program interface can be known as SaaS (D. C. Chou & Chou, 2008; Mell & Grance, 2011; SIIA, 2001). Others defined SaaS as a software in which the application is based on the Internet and is available via network and can be accessed remotely (Churakova & Mikhramova, 2010). In SaaS, the operation is executed on the host’s server and databases are saved on the virtual space owned by the SaaS provider. Application operation, safety, security and storage may not controlled by the consumer.
Rapid growth of IT technologies bring advantages for companies, although at the same time it creates certain risks and challenges. Reacting to these changes is paramount for the companies to take advantage and to counteract threads of this new digital-cloud-era (SIIA, 2001). SaaS mainly provides cost savings, resource utilization, application access scalability, and global outsourcing possibilities for the organization (D. C. Chou & Chou, 2008) along with many other advantages such as opening the global information flow to the company’s management layers, using up-to-date IT expertise, and bringing core competency to the enterprise. Lynn Elwood, the vice president of OpenText (a known cloud solution enterprise) claims cloud based services and software as a service solutions will bring businesses better agility, flexibility and insight (2016) however on the other hand she suggests those who want to consider cloud options first should ensure if the cloud and SaaS will bring benefits or not and this is the time, some questions will rise: how would a manager understand the suitability of the SaaS model for the business, and why should a change agent offer SaaS as a strategic movement?
Key Terms in this Chapter
CIS, Cloud Information System: Briefly is a kind of Information System which is placed on the Web rather than on a physical server in client’s site. Many Pros and Cons have been illustrated for the CIS since far.
SLA, Service-Level Agreement: Is a kind of agreement between the customer and SaaS provider in which the level of cooperation, terms of services, and many other SaaS agreement conditions has been established in. SLA is vital for both client and provider to illuminate the coming horizons of their business views.
ASP, Application Service Provider: Any company or contractor who offers software as a service like Amazon’s AWS or Google’s cloud.
SaaS, Software as a Service: Is both a phenomenon and a new model to offer application to the customer far different from the old application packaging era. In this model software is not sold as a good, rather it is offered as a service with a long service agreement, backup, and maintenance.
Business Agility: Is the level of business tolerance toward changes and circumstance. The more agile a business is, the better it can be matched to ever-changing business circumstances of this tech-era.