Wednesday, 3 September 2014

Why Do People Get So Hung Up about SaaS?

As my blog title implies, I work in the Fusion Applications world.  We've done numerous implementations of Fusion HCM now, and all of them have been in the cloud.  We are convinced that cloud services are the future and have staked the bank on it!

I study the various debates about SaaS (or cloud services) and find myself time and time again coming back to this simple view of why people choose a SaaS service over an on-premises application.  Some of the more technical questions like "is it true SaaS?" often don't really mean much to a customer.  If it's not on-premises it's SaaS (see previous blog).

To me the answer's simple... you buy SaaS because the hard work has been done for you by the service provider (like buying the hardware, maintaining the software, data compression, encryption and a whole load of other stuff I don't need to understand etc.).  You buy SaaS because it's simpler than doing it in house, and should be cheaper.

But another argument I see more and more is that if the "Service" you subscribe to doesn't do exactly what you want and you can't "customise" it.   Well, that's a whole different topic (don't get me started) where the SI's value to their customers is about product knowledge - or should be, to maximise the system's capabilities through configuration.

But, back to the topic in hand... when choosing systems we get hung up about the trivial and don't place enough emphasis on the important.  For example, maybe my payroll system calculates everything I need to pay people, but for some reason doesn't have the capability to automatically produce a payslip in the format I want.  Is that a showstopper?  Probably not, because I can extract my data and format it using another tool.  Not perfect, but it works.

OK, so let's look at this in a different way.  Let's think about something which may be more relevant to our daily lives than purchasing subscriptions to cloud services - buying a car.

When we buy a car, we usually do some research, maybe put together some requirements for the vehicle - model, engine size, colour, interior styling, sat. nav., tyre size, A/C etc.  Then we go to the dealer and take a test drive and find out how much it's going to cost us.   Some things will be more important to us than others.  Maybe leather seats are a 'must have', but a 12 speaker surround sound system or a cigarette lighter isn't so important.  But, ultimately we buy the vehicle and it probably doesn't have everything we wanted and it certainly has stuff we don't want in it!  So what!  We just don't use what we don't want.  But we do still pay for it and it's there if maybe one day we might want to use it.

So, why do people get so hung up about the software they purchase (or rather, subscribe to)?  In the car analogy, I get most of what I want in the car, a lot of what I don't want, but ultimately it does the job for me better than any other vehicle within the parameters of my original requirements and my budget.  What's more, it comes with a 3 year warranty so I don't have to worry about anything going wrong.

I think subscribing to a SaaS service should be looked at in the same way as the car purchase.  Go for the best fit to your requirements (I challenge you to name me any system that meets everything you wanted) and don't worry about the extras that you won't use - although they are there if you change your mind later.

Worry about the important things, and don't get hung up about the trivial things that don't really matter - like the cigarette lighter.

Just a thought...  I like keeping it simple.


  1. Hi Tim,

    We are planning to migrate our HR system from SAP to Oracle Fusion HCM. Can you please guide me to the list of migration methods available. I am new to FUsion HCM. Please help me.


  2. Hi Nelson, sorry for the delay in responding. I was at OOW14 and just catching up with the blog now. Please drop me an email on and I'd be pleased to advise.


  3. Hi Tim,

    It was interesting to read your analogy and views on SaaS and how it is THE future! I am completely aligned with you, and to be frank most of consultants would be.

    However, I just want to play devil's advocate here and ponder over some questions which we should all give a proper thought about.

    The analogy of SaaS to a car is nearly right but not completely. The ability to run a business smoothly (at least with basic requirements, if not all) can be compared to a car running smoothly on

    the road. But, your example of the car cannot be compared only to SaaS as a whole. May be, SaaS is one unit of the car (we might want to call it "Engine"). But an engine needs to integrate and gel

    well with all the other components of the car to make it run smoothly on road. An Engine smoothly operating on-its-own without giving proper torque to the wheels is no good as wheels needs to roll

    (and they need to roll smoothly!).

    My point is that customers do not see SaaS as an independent component. They expect it to integrate it with other applications seamlessly and without any ifs-and-buts. They expect it to be online

    and real-time without any manual interventions. The problem with the current version of SaaS applications (in this case, Fusion HCM) is that its a baby which has been delivered before its due date.

    There are numerous functionalities that the product still has to offer and there is a long way to go. For ex:

    1. The payroll solution is not for all localizations. 99 out of 100 times, customers stick to their existing payroll system hoping that the cloud Fusion HCM would seamlessly integrate with it to

    work without any challenges. However, most of my implementations have seen issues in interfaces not justifying an independent HCM system integration with payroll system.

    2. There is no recruitment system solution making it another interface with either Oracle Taleo or other 3rd party applications. The interface has challenges in terms of real time data

    import/export. Plus, there is no solution for salary breakup functionality in Taleo Recruitment. If recruitment is compared to wheels, salary breakup functionality would be the indicator to them to

    avoid bumps and thorns. Without its availability, the driver needs to tirelessly keep a microscopic eye on road to avoid punctures.

    3. There is no availability of training and development system. This again needs to be integrated to Taleo Learning and 3rd party applications. And the worst part is that the SI still does not have

    any control on these interfaces and only the product owner can help develop the interface. To add to the pain, there is no seamless business process flow between Taleo Learn and Performance

    Management in Fusion making it almost an age-old system (as compared to eBusiness Suite). There are no real time interfacing capabilities to make customers get the seamless integration of

    performance management with training and development (an obvious requirement).

    If we try to understand from client perspective, the following are the components in their order of priority:

    1. By switching over to the new system (SaaS, in this case), are my bare minimum (basic) business process flows (which are my bread and butter) running smoothly and all requirements are catered to.
    2. Is the new system addressing most of the pain areas of current system (if not all).
    3. What additional things can this new product offer.

    Please note that the last component is the least of customer's worry when they are launching the new system as their confidence is low initially. It will eventually grow but not at the cost of

    basic business process compromise. Your sentence "but ultimately it does the job for me better than any other vehicle within the parameters of my original requirements and my budget" needs to be

    carefully assessed customer-by-customer and cannot be a generic statement for all cases.

    I am not trying to argue with you here :-) Just wanted to put forward certain points from customer perspective.