Chiquita CIO on business case for SaaS

May 15, 2010 | By Caron Carlson

When Manjit Singh, CIO at Chiquita Brands International, was trying to explain to company stakeholders the benefits and risks of using software as a service, he compared it to leasing a car: By leasing software (or a car), you don't have to worry about depreciation, ongoing investments or a big replacement cost down the road.

One of the greatest challenges in moving some IT functions to SaaS providers is providing a persuasive business case to your top decision makers. In a lengthy piece at InformationWeek, Singh walks through the key initial benefits of SaaS--ongoing upgrades, low cost of entry--and he suggests ways to explain the long-term benefits as well. When discussing ROI, for example, it is important to include the opportunity to shift internal IT resources to projects that directly aid business initiatives, he advises.

When Chiquita was considering a SaaS provider for its HR system, stakeholders around the company raised concerns about data privacy compliance, data security and vendor stability. Singh describes how his team addressed each concern.

Regarding worries about the viability of the vendor, it is best to address them head-on, he says: "[W]rite into the contract specific language regarding performance service-level agreements, source-code escrowing, data ownership rights, data backup procedures, and auditing rights. In this regard, be sure to write tight language that ensures you can not only recover your data, but potentially also recreate the associated application environments should the vendor go out of business."

For some additional pointers on how to sell top executives and the board on SaaS, take a look at an article by InformationWeek's John Soat. Soat spells out five steps, beginning with managing expectations: Cloud computing has been so over-hyped that it's time to take a more measured approach and focus on the business problems that SaaS can address, he writes.

For more:
- see Manjit Singh's article at InformationWeek
- see John Soat's article at InformationWeek