BPM and SaaS: Tips for a more perfect union

Editor's Note: The union of BPM and Software as a Service (SaaS) offers attractive benefits for businesses, but the approach faces significant challenges on the road to widespread adoption. Part I of this special report explored concerns and risks involved in combining BPM and SaaS. Here, Part II offers expert advice for combining BPM and SaaS.

Software as a Service (SaaS) BPM can be implemented in two ways, says Sandy Kemsley, an independent BPM consultant with Kemsley Design. The first is the process-modeling side, which was the first to get traction in the market. The second—and, in Kemsley's view, "more interesting"—is the collection of BPM SaaS variants that allow you to execute on the Web.

In either form, SaaS BPM is worth looking at, Kemsley says. And for most organizations, the opportunity to offload hosting responsibilities represents an opportunity. "People make a big deal of it when a SaaS company has down time, but internal data centers aren't up 100 percent of the time, either," she notes.

The economics are compelling, too: "It's the same as any other software market. The cost of SaaS is lower, especially for small and medium-size businesses," she says. What's more, small and midsized businesses often couldn't afford BPM at all before SaaS became an option. Of course, she acknowledges, if you really grow usage, at some point the subscription costs of SaaS will become oppressive, meaning that it may make more sense to bring BPM in-house.

Advice for avoiding SaaS anxiety

"Many organizations are just plain nervous about SaaS," Kemsley says. However, SaaS companies base their reputation and business models on keeping customer data safe and secure. For publicly held companies, she says, there's little danger of one individual taking steps that would endanger the company's ability to meet its commitments. If you're looking for a gradual ramp-up to BPM, you may want to consider a company that offers both hosted and non-hosted SaaS BPM.

Also, look closely at service-level agreements (SLAs) and other agreements. Some SaaS BPM agreements are month to month, but some involve longer-term arrangements. "Be sure you understand the terms and how those terms might change if the company is purchased," Kemsley advises. And, she adds that if you find a SaaS company with a good reputation, you probably don't need to worry much.

Jeff Kaplan, managing director of the THINKstrategies consultancy, agrees that the decision is mostly a matter of sourcing. "There is a proliferation of players and vendors trying to jump in," he notes.

Crucial considerations for BPM and SaaS

IT and business decision-makers need to think about three things, Kaplan says. First, they must consider the fundamental functionality that they need. Second, they must consider different vendors and specific application areas. It's important to make sure vendors have the basic capabilities they need and the financial viability to survive, because evolving markets often go through a shakeout. Finally, he says, they should see how far the SaaS vendor has gone in terms of having the vision to understand the future benefits that SaaS can deliver.

To that point, Kaplan delivers a warning: Make sure the application is built for SaaS. "Many established software vendors have been bastardizing SaaS by simply hosting their apps in a single instance approach," he says. However, that approach means it may not scale economically. As a result, every time the vendor rolls out enhancements, it must adjust every customer. In addition, he says, "they aren't going to be able to reap the additional benefit of being able to aggregate data across the customer base."

The result? "Those companies are going to suffer and fall further behind while those SaaS BPM vendors that have architected a more robust approach, a multi-tenant architecture will be in the best position to capitalize on this," Kaplan says.

Forrester Research analyst Clay Richardson believes that most organizations should expect to end up with a mixed on-premise/off-premise model. "With some processes, it makes sense to go to the cloud, but others you will want behind the firewall," he says. That model gives IT a lot of leverage, because IT team members aren't on the hook to deliver--they just need to provide the guidelines. "In the long run, beyond three to five years, we see companies overcoming the perceived risk of SaaS BPM," Richardson predicts. But for now, he says: "It's best to take a segmented approach."

Part I of this special report explores concerns and risks involved in combining BPM and SaaS.

About the Author

Alan Earls, a journalist who specializes in writing about technology and business, is based in the Boston area.

More by Alan Earls, ebizQ Contributor