Incorporating SaaS applications into an enterprise’s business processes can offer a number of advantages, including:
- focusing internal resources on core strategic strengths instead of infrastructure services
- being able to pick the best fit from a variety of mature low-risk best-of-breed applications
- lowered internal IT hardware and support costs
- well-defined costs
But as always, nothing comes for free and the cost of individual applications adds up quickly. For example, assuming a sales and development SME on a growth track with 100 employees, including a 10-person sales team, a couple senior admin/HR roles, consolidated project management across the organization and a product engineering team who working with part numbers and bills of materials, and using the following SaaS applications:
- Taleo Recruit for talent recruiting – $500/month (Taleo Business Edition Recruit module, 5 users)
- Saba People Cloud for basic talent management – $500/month (based on competitor Kapta pricing of $5/person/month)
- Salesforce for customer relationship management – $1250/month (Enterprise version, 10 users)
- KnowledgeTree for document management (engineering, legal, administration, etc.) – $2000/month (100 users)
- Basecamp for project management – $99/month (100 projects, 40 GB storage)
- Aligni for engineering to manage parts and bills of materials – $199/month (< 10,000 parts)
The total is $4,548/month, and doesn’t include an ERP system for managing financials – which could add another $3,330/month (for either a basic system with limited extensibilty, or the base price for an extensible system before add-ons and customization).
Now, I’m not saying this isn’t money well spent, and for many organizations it is. But bear in mind it’s cash off the bottom line and attention (a rare and precious commodity) taken away from something else in order to learn something new. Carefully consider the complete value – and the complete cost – before signing up for another monthly payment on a credit card, because that’s the easy part.