 Despite companies like Salesforce.com having paved the way for vendors offering various hosted applications for the enterprise, the misconception that a Software-as-s-Service deployment is for a divisional deployment or the SMB market and not for a large enterprise still persists. This couldn't be further from the truth.
The value proposition of CMS is based on eliminating the cost of lost or misplaced work, cycle-time acceleration, workflow integration, collaboration and maintaining brand integrity. Using the SaaS model for CMS, customers not only get the above mentioned benefits and, in some cases, faster than through an installed deployment, but are also able to free-up valuable internal IT resources to do other productive tasks. Extensive Service Level Agreements and negotiated contracts also ensure continued stability of the business process with guaranteed up-time and the ability to bring the solution in-house if needed. Software updates are also provided on a continuous and iterative basis.
These factors have helped propel the CMS as SaaS market to grow at much faster growth rates than installed solutions. Tight economic times require companies to use their resources carefully. The ability to free up IT resources while spreading the sticker shock of the investment over 12 months has struck a chord with many technology purchasing executives. Many RFPs now specifically ask vendors to demonstrate a SaaS strategy. The SI community has also jumped on to the opportunity, creating hosted facilities where they have the ability to provide a partner OEM CMS solution as SaaS.
The ROI for any CMS solution, ECM, DAM, Document Management and others, is now well-proven. Even at the most micro level, the savings are evident using the rule of thumb that deploying CMS can save one hour per day per power user. Putting that in a quick equation:
# of users x 250 (days worked each year) x fully burdened average cost per hour (salary, benefits, overhead) = $$$$ in yearly savings
For example, a graphic designer in Boston costs $200 per hour, fully burdened. Saving one hour a day results in:
1 x 250 x $200 = $50,000 in yearly savings
And that is for just one knowledge worker for one function, without counting the 250 hours a year that can now be used towards more productive tasks.
Adding the benefits of a SaaS deployment and letting the vendor worry about the integration points, building the APIs and customizing the solution, companies can start looking at not only deploying CMS at divisional levels but also scaling that up to the enterprise with a business case based on incremental costs, saved resources, higher productivity and rapid payback, especially in tough economic times.
Market evolution aided by infrastructural and technology advancements in storage, security, bandwidth, Rich Internet Applications and Web Services have created a landscape that puts customers in a situation that they never were in before: They have choices.
Mukul Krishna is global director, Digital Media Practice, at Frost & Sullivan. Visit www.frost.com for more information.
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