Software as a Service Seen Driving Faster Implementation and ROI across the Enterprise

Aberdeen research on 631 companies shows expansion of SaaS across five application areas; CIOs appear to be embracing on-demand model

Boston, MA — August 22, 2006 — Software as a Service (SaaS) is gaining traction in a number of enterprise application areas and making quick believers out of previous skeptics, according to new Aberdeen research.

Also known as on-demand or hosted applications, SaaS is changing how companies pay for, implement and run their software applications, according to Aberdeen. The analyst firm said that its research of 631 companies conducted from March to July 2006 verified that the SaaS model is driving faster implementation times and quicker return on investment.

Aberdeen's findings across five applications areas included:

• Customer Relationship Management (CRM): Implementation in less than two months and ROI in less than six months;


• Supply Chain Management: Implementation in less than three months and ROI in less than one year;


• Sourcing and Procurement: Implementation in less than two months and ROI in less than one year;


• Financial Management: Implementation in less than three months and ROI in less than six months;


• Product Lifecycle Management: Implementation in less than six months and ROI in less than one year.

Despite these findings, Beth Enslow, senior vice president of enterprise research for Aberdeen and author of the report, warned that while the value proposition of SaaS is seductive, companies considering SaaS need to educate themselves on a number of factors to make a solid buying decision. "First, realize that all SaaS is not created equal," she said, adding that there are five primary types of SaaS, with differing value propositions.

The Aberdeen report, "The Software as a Service Buyer's Guide," documents the current usage of and interest level in SaaS across the major enterprise application areas and provides advice on which companies should consider SaaS for each application area and which will be better off with an on-premise solution.

The report also provides an SaaS evaluation framework to help enterprises make sound SaaS decisions.

The report is available at http://www.aberdeen.com/summary/report/benchmark/RA_SaaSBuyerGuide_BE_3305.asp (registration may be required).

---

Additional Articles of Interest

— Looking to build the case for technology to enable S&OP excellence? Read the SDCExec.com exclusive article "Integrated Business Planning" for insights and analysis from Aberdeen Group analyst Nari Viswanathan.

— America's aging transportation infrastructure can't keep up with relentless world trade growth, and if it isn't overhauled, consumers and the U.S. economy will pay a steep price, warns APL President John Bowe. Read more in this SDCExec.com story.

• More articles about Aberdeen.

---