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Issues you need to know about software-as-a-service

Issues you need to know about software-as-a-service

12 things to think about before choosing a software-as-a-service application

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10. Is that "throat to choke" virtual or human?

Find out before signing up whether an application is "self-supported" via the Web or if the vendor makes live customer service reps available to users. "Some of the more simple, straightforward applications . . . where software is relatively intuitive, there may be minimal tech-support services available. Therefore, there could be a lag in response times," Kaplan says.

11. You still need in-house support.

Software-as-a-service expenses are often justified by vendor promises to deliver better services than customers receive with traditional software. But to get the full benefit of improved services, IT shops must match service-level guarantees and make internal commitments to business users and their own customers.

"For example, if a software-as-a-service vendor guarantees a service level on invoice-processing speed, the IT department must ensure the availability of the purchasing department's infrastructure system that supports this function," the McKinsey report states.

12. Size matters -- sometimes.

Software-as-a-service is often billed as a good solution for small- and medium-size businesses (SMB) who want to control costs and lack extensive IT staff. But many proponents that companies of any size can benefit.

"When you put software up on the Internet . . . who will use it depends on what the software does, how good it is and what it costs. The size of the company doesn't actually enter into the equation," Wohl says.

But software-as-a-service-shopping SMBs face a different decision process than large enterprises, one that should favor application suites rather than individual tools.

"NetSuite is very much of the belief -- and we agree with them -- that the suite-oriented approach for an SMB customer makes a lot of sense," McNee says. "SMB customers don't have a lot of IT staff, they don't have a lot of time and expense to integrate all these applications."


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