Objectives of knowledge management

Part 1
Introduction
‘
Web services
’ or ‘Software as a Service (SaaS)’ refers to a highly significant model for man-
aging software and data within the digital business age. The web services model involves 
managing and performing all types of business processes and activities through accessing 
web- based services rather than running a traditional executable application on the processor 
of your local computer.
Benefits of web services or SaaS
SaaS are usually paid for on a subscription basis, so can potentially be switched on and 
off or payments paid according to usage, hence they are also known as ‘on demand’. The 
main business benefit of these systems is that installation and maintenance costs are 
effectively outsourced. Cost savings are made on both the server and client sides, since 
the server software and databases are hosted externally and client applications software is 
usually delivered through a web browser or a simple application that is downloaded via 
the web.
In research conducted in the US and Canada by Computer Economics (2006), 91% of 
companies showed a first- year return on investment (ROI) from SaaS. Of these, 57% of 
the total had economic benefits which exceeded the SaaS costs and 37% broke even in year 
one. The same survey showed that in 80% of cases, the total cost of ownership (TCO) came 
in either on budget or lower. There would be few cases of traditional applications where 
these figures can be equalled. Read Mini case study 3.4 for details on the benefits of a SaaS 
implementation and how the concept of service usage can also be applied to hardware 
infrastructure.
Web services
Business applications 
and software services are 
provided through Internet 
and web protocols 
with the application 
managed on a separate 
server from where it is 
accessed through a web 
browser on an end- user’s 
computer.
Web services, SaaS, cloud computing and service- oriented 
architecture (SOA)
Focus on
Mini Case Study 3.4
CIO (2010) describes how Intel built an intranet for its research and development group. Its aims were to 
reduce the cost of operations by making more use of existing infrastructure and making users of comput-
ing services aware of the cost of their utilisation. Das Kamhout, the project lead, explained the benefits as 
follows:
Overall, this represents a dramatic change in mindset. On‑demand self‑ service allows IT to get out of the 
way of the business so we can up‑level IT and be a strategic business partner. And with transparent costs, 
departments across Intel now know what they’re costing and what they’re consuming.
This approach to server utilisation is known as