Why SaaS is Good for IT vs. Why SaaS Isn't Good for IT

I've heard this argument back and forth from a number of people, so it is worth commenting on, particularly as related to business intelligence systems. That is data warehouses and the like.

Here's the positive themes: cost savings, freeing up resources for other strategic projects, improved quality of BI information and improved distribution of BI information, improved coverage of business units.

Here's the negatives: risk of reduced budget, risk of career disruption/change.

The net is that IT folks have to view SaaS as "good" for them because (a) it is good for the business (b) it is inevitable.

Let me elaborate.

The basic argument for SaaS in general is just the Adam Smith economic division of labor argument, i.e., you should make use of services instead of being self-sufficient for the same reason you buy food at the supermarket instead of farming your own - it is more efficient for a specialized producer to do it than for individuals to each do something they do not have the specialized skills for. That efficiency is returned to us in lowered cost, and increased reliability of supply. For IT systems this argument is presented really well in The Big Switch, which I highly recommend.

Contrary-wise this implies that if you have computing needs for which services aren't available, then by all means you should do those in house. This goes all the way down to writing your own software if software isn't available to do what you need. This is where the "good" part of the SaaS trend for IT comes from. It's the ability to refocus efforts on things that are strategic, not commodity.

For SaaS BI, more specifically, well it is good for the business because it saves cost over doing it in-house, and in most cases we at Oco can do it far better than an in-house project would be able to do. The cost reduction can actually enable BI to be available for the first time at many businesses which could not afford to do it before on the price scales that larger enterprises have been paying.

However, for businesses that replace an in-house effort with SaaS BI, whether it is "good" for IT depends on what is done with the savings. If these are re-invested in other strategic IT projects then it creates ongoing career opportunities for IT folks. However, if those savings are just used to increase profits and/or pay dividends to shareholders, then this good for the business is at best neutral for IT folks working in the trenches, and possibly very negative. Change can be opportunity, but always presents challenges.

If a new IT technology is good for the business, then strategic IT departments have to find a way to embrace it and make it successful for the business. It's untenable for an IT department to push back on important technology for "turf" reasons alone.

The career plans of people that are vested today in in-house creation of BI/DW systems clearly need to evolve to match the new reality. E.g., if you are an IT leader who wants a successful DW/BI deployment on your resume as part of your career plans, well you have to consider whether it would look better to have a SaaS deployment of BI on your resume instead. A SaaS BI deployment should save your organization lots of money, so perhaps you would also be able to feature the other projects you can now afford to do with the budget savings.

If you are a data analyst, then by definition your company already sees the importance of having data analysts, and having a SaaS BI deployment should just let you move up the value chain to deliver the BI information that goes beyond what you can get from your Oco system, or which explores the directions for enhancements of your SaaS-deployed BI solution. 

If you are an IT worker in the trenches, such as a DBA or systems administrator hoping to work on a DW/BI deployment, then there certainly is a risk of a disruption of your plans due to SaaS. I'm not sure I can sweeten this for you. As IT switches over to services and away from in-house deployments, then your job and role is going to change. You really do have to read The Big Switch, and should consider looking for employment on the services side, that is with the service providers. If you stick within your existing business/employer, you should look for something you can work on that is more strategic, i.e., that is related to a system that is very specific to your business, and not common across that business and many others. I can't find the origin of this quote, but the point bluntly is to "get strategic or get outsourced".

There's another way in which an inevitable change can be "good" for IT. The inevitability is basically saying that since it's coming, it's "good" to be a thought leader and embrace the change and get some advantage from it before everyone else has those advantages as well, at which point you are just playing catch-up. This argument is also known as "the best defense is a good offense".

The alternative is to fight the trend, rather than switch, but this is just burying one's head in the sand, to mix in another metaphor.

Comments

[jeff]

This is quite an interesting post, even for a guy, like me, who's been away from IT for a number of years now. Back in the 1990s, points being made about Object Orientation sounded eerily similar to those you speak of with SaaS.

[Tony Zuanich]

Well written. Proctectionizm is a natual human behavor, but for IT departments holding on to the old will just eventually leave you in phone support.