Consider Total Costs When Purchasing Software as a Service

By Mark Clark posted 02-07-2023 11:24 AM


Software as a Service or (SaaS) offerings can provide organizations with point solutions to address needs in their enterprise, or a specific portion of the organization needing something above and beyond the functionality provided by Oracle solutions. 

Salespeople for these SaaS providers often deal directly with the prime consumers of the functionality at an organization, often leaving IT out of the discussions until after the contract has been signed, and promises made to stakeholders on a fast and easy rollout since the functionality exists in the cloud. Unfortunately, most of the time, an enterprise level discussions and decisions were not made. 

Sales, Service, Finance and Accounting, Project Management, Tax, Procurement and more areas of the organization are all eager to take advantage of functionality that seems to be an improvement and readily available to the consumers and stakeholders. If their part of the organization lived in a vacuum, these goals would likely come to fruition. Most of the time however, the implementation and lifetime cost of ownership is much more complicated than the subscription prices. Implementations tend to be understaffed, based on promises made by the sales team. 

One of many challenges is these systems are almost always expected to communicate with the existing Oracle systems. Those SaaS salespeople will even tout the fact that they have other customers that use Oracle; leading to a false sense of security and confidence in a flawless and easy implementation. 

Sometimes these systems allow for a transaction or data state to take place that is not allowed in Oracle. What may be a normal transaction in that system turns into an error in Oracle that must be resolved after things have already taken place. The processor may not even be a part of the enterprise. They could very well be suppliers, customers, contractors, or some other type of third party. These SaaS solutions are often shared with a large number of companies or organizations, so customization can be extremely limited and most often not an option. 

The inverse is also true. Sometimes something you need to do in Oracle which is perfectly allowable, would not be supported by the SaaS solution.  Integrations can often turn into two way integration where considerable logic must be used to handle discrepancies or timing issues. Sometimes organizations will end up customizing Oracle just to prevent future errors. This then causes challenges for patching and upgrades. 

Master data can often get out of synch when these type of solutions are introduced, with logic being required to enforce one system or the other being the system of record. In some cases, test systems are unavailable for these SaaS offerings, or if they are available, they come at additional cost. 

One of the perceived benefits of SaaS solutions is that they are constantly being enhanced incrementally, negating the need for large test efforts. While there is benefit to this approach, often a new feature will break an integration, without it being readily apparent. One of our customer’s applications was enhanced with a new field being made available. They didn’t want this field, so it was disabled in the SaaS offering. Unfortunately, the packaged nightly feed included logic for this field, which moved the expected locations of data, causing more errors to occur. 

In addition to the new features being introduced into the SaaS solution, Oracle patching and Oracle Upgrades become more complicated with additional testing required for any touch points. 

We would like to point out that we aren’t opponents of these types of solutions. Many times these solutions provide functionality that isn’t configured or licensed in the Oracle platform. In some cases, they deliver functionality that just isn’t available in Oracle.  However, we just caution any group looking at SaaS solutions to include IT and any solution architects into the early discussions with the vendor. Often they will ask the questions that the business may not have thought of, or may not have felt comfortable asking the sales people. 

Whenever new functionality is enabled, whether it be on premises or in the cloud, a holistic analysis must take place across the enterprise. 


About the Author

Mark Clark is Senior Partner at O2Works. As systems integrators, O2Works is often involved in the enablement of SaaS solutions; collaborating, designing, building, and testing logic to get these solutions to work together with Oracle Applications.