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Challenges of deploying SaaS

Although the cost reduction arguments of SaaS are persuasive, what are the disadvantages 

of this approach? (The pros and cons are similar to the ‘make or buy’ decision discussed in 

Chapter 12.) SaaS will obviously have less capability for tailoring to exact business needs than 

a bespoke system.

The most obvious disadvantage of using SaaS is dependence on a third party to deliver 

services over the web, which has these potential problems:

● 

Downtime or poor availability if the network connection or server hosting the application 

or server fails.

● 

Lower performance than a local database. You know from using Gmail or Hotmail that 

although responsive, they cannot be as responsive as using a local email package like 

Outlook.

● 

Reduce data security since traditionally data would be backed up locally by in-house IT 

staff (ideally also  off-  site). Since failures in the system are inevitable, companies using SaaS 

need to be clear how back-up and restores are managed and the support that is available 

for handling problems, which is defined within the service level agreement (SLA).

● 

Data protection – since customer data may be stored in a different location it is essential 

that it is sufficiently secure and consistent with the data protection and privacy laws dis-

cussed in Chapter 4.

These potential problems need to be evaluated on a case-by-case basis when selecting 

SaaS providers. Disaster recovery procedures are particularly important since many SaaS 

applications such as customer relationship management and supply chain management are 

 mission-  critical. Managers need to question service levels since often services are delivered 

to multiple customers from a single server in a