I took a fascinating briefing today from a vendor that has announced a SaaS-based Order Management offering. I took the briefing in order to discover how the vendor had solved the problem of integrating the use of master data across the enterprise firewall; this has to be an issue for any user of SaaS-based business applications since some master data will have to be exchanged between the applications behind and in front of the firewall. Salesforce.com has to synchronize customer master data between its own applications and those used by its customer behind their firewall. For me, the key questions for any SaaS offering that purports to re-engineer a process:
a) where is the master data mastered? Has this location moved?
b) Is the business process different, or is SaaS simply being used to move the boundary of application interchange across the firewall?
So far, all SaaS offerings I have seen really only move the boundary of the processes, and as such, the “what” moves across the firewall changes. The business process itself is virtually unchanged.
Secondly, where the master data is mastered has also not changed. For most firms, though not all, master data is viewed as sacrosanct and is mastered – and protected – behind their firewall. Only subsets of master data are exposed in any B2B fashion (think of what content goes into an EDI transaction) and there are strict controls over what is hosted or managed outside the firewall.
If the user is not willing to accept the change in costs, both in terms of organization and technology, associated with the movement of master data mastering, and if the processes remain pretty much the same and the boundaries are just moving around, the SaaS offering itself is pretty much a waste of time. And this last point was the most interesting for me: I represent business users who talk about business process and execution of same; and the knowledge of MDM exposes to me some major issues and challenges with SaaS; yet technologists that are into architecture, SaaS and cloud computing hype, would argue that such (new) applications are “awesome” and “new” and “innovative”. They may by – but I challenge vendors to explain to business users what is the material benefit to the business in deploying SaaS offerings.
By the way, Happy New Year to you!