Saas is Software as a service. Wikipedia define Saas as “Software as a Service is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own web servers or download the application to the consumer device, disabling it after use or after the on-demand contract expires. The on-demand function may be handled internally to share licenses within a firm or by a third-party application service provider (ASP) sharing licenses between firms.”
To understand the concept just imagines using licensed software through internet without paying any license fee. It is a low cost way for doing business and obtains the same benefits of commercially licensed, internally operated software without the complexity and high initial cost (license Cost).
Saas applications are developed specifically to leverage web. The application are priced on a per-user basis, and often charged with additional fees for extra bandwidth, storage or other options. They give users an opportunity to upgrade their account in accordance with specific needs they might have in future.
The Speed of Deployment is also very fast. The application is already up and running on the vendor’s servers so you just have to get your data into the system. The control over the data is however the main reason of concern. Data is stored on the vendor’s servers. Reputable vendors back up their data and store backups in a secure location. Most vendors also provide you with ways to export your own data.
Benefits of SAAS
Cost Savings: Buying the Patented product from a firm is generally associated with huge license fees. A normal software installation is a very big and cumbersome process which involves experienced IT people and also engage various employees at different levels. The real cost of implementation normally exceeds cost of software itself.
Save Time: Because you eliminate many of the typical implementation tasks associated with licensed software and because the software is already up and running on the SaaS vendor’s data center, deployment time tends to be much shorter with a SaaS application than a traditional one.
Immediate Access to Innovation: Every new version of licensed software is costly and complex to update. With a SaaS subscription, on the other hand, you benefit from innovations on an on-going basis. As soon as a new or improved feature appears in the application, you can begin using it.
The main Reason Saas applications are catching up with the industry is because SaaS is an excellent operational model. It frees up resources and allows organizations to concentrate on their core competencies.
Monday, July 27, 2009
Friday, July 10, 2009
History of Purchasing
History of Corporate Purchasing started in late 1890s purchasing was rarely used as different department except some railroad organizations. Even during early 1900s purchasing was considered to be a clerical work. During World War I and World War II purchasing function increased due to the importance of obtaining raw materials, supplies, and services needed to keep the factories and mines operating.
During 1950s and 1960s purchasing continued to gain stature as the techniques for performing the function became more refined and as the number of trained professionals increased but still purchasing agents were basically order-placing clerical personnel serving in a staff-support position.
In the late 1960s and early 1970s, purchasing personnel became more integrated with a materials system. As materials became a part of strategic planning, the importance of the purchasing department increased.
In the 1970s the oil embargo and the shortage of almost all basic raw materials brought much of business world's focus to the purchasing arena. The advent of just-in-time purchasing techniques in the 1980s, with its emphasis on inventory control and supplier quality, quantity, timing, and dependability, made purchasing a cornerstone of competitive strategy. Various different questions became the order of the day for a buyer like
Are we buying at right cost?
Supplier is producing it at right quantity or not?
Whether supplier Is producing the right product or not?
Whether material will come at right time or not?
Whether buyer is buying for the company or for personnel gain?
During Early 1990s, Value Proposition in purchasing increased. People realized that by letting purchaser negotiate and ask for discount bring lots of cost reduction. COST SAVINGS become a buzz word and ofcourse control over the buying process remains one important function of purchasing.
During Late 1990s the purchasing evolved into strategic sourcing. Enterprise wide process that continuously improves and re-evaluates the purchasing activities of a company. More emphasis on supplier data base begun. Contracts were sourced for long term basis to have better cost. Supplier relationship building and supplier management started.
In the past decade of 2000s Purchasing evolved from a myopic view on cost to much broader terms. Some of the new developments which are widely used now are:
Assessment of a company's current spend (what is bought where?) – SPEND ANALYSIS
Assessment of the supply market (who offers what?) –LOW COST COUNTRY SOURCING
Procurement Technology Evolved - (SAP, ERP)
Procurement Outsourcing Evolved - (P2P Model)
Total cost analyses (how much does it cost to provide those goods or services?) – TCO
Identification of suitable suppliers. – SUPPLIER MANAGEMENT
Development of a sourcing strategy (where to buy what considering demand and supply situation, while minimizing risk and costs) – ADVANCE STRATEGIC SOURCING
Negotiation with suppliers (products, service levels, prices, geographical coverage, etc.) – Data Mining and Benchmarking
Implementation of new supply structure – Lean Purchasing
In future Purchasing will continue to evolve with more focus on complete supply chain. Even purchasing at Tier I and Tier II will be looked in much more minutely. Suppliers will be key business partners driving new technological breakthroughs to drive cost down. Also Technology in Purchasing is evolving very fast and will redefine the way we procure and source currently. Purchasing is now recognized as a major function whose importance is immense and amount of value it brings to an organization is huge.
Friday, July 3, 2009
Outsourcing Industry: Factors of Growth
Following up on my earlier blog highlighting challenges for outsourcing industry however the industry is showing lots of resilience and as a whole it will bounce back from the lows to period of double digit growth again.
There are few factors which make the industry growth in future very much possible:
Business Expertise: Organizations has gained lot of expertise in handling outsourced work since it started in last decade. Now organizations have matured in handling the business process of identifying opportunities to reduce waste and streamlining the process in an efficient way. In short they have moved from being the fresher in the business and doing the work assigned to them to subject matter expert and now doing not only the work assigned to them but also with their past experience telling clients how to do business more efficiently. Now they have set examples of managing outsourced work. It’s a remarkable achievements and this opens the door of bigger and better future for the industry.
Globalization is still on: The Recession has been very severe but still globalization is the buzz world and if I say it is the key to make your company stronger in recession. Organizations with excellent global delivery model in outsourcing are still the easiest way for organizations to outsource. Outsourcing though doesn’t cover the complete globalization but still provide an excellent start for the companies willing to go global and is also cheaper and now more reliable way for companies to achieve their global expansion plans.
Technology and Skills: It is ironical that outsourcing companies like Wipro and Infosys are now developing technologies that can challenge the best in the business to collaborate or compete directly. Recent example is Wipro tie up with Oracle with which Wipro will deliver PeopleSoft HR to various client bases using Wipro BPO model.
Pressure from Competition to reduce operating costs: Outsourcing saves money is still true and if your competition is saving money more then you then you have to find ways to reduce yours. Finding the right outsourcing partner, finding the right outsourcing process and doing it at the right time are the three keys. Outsourcing decisions can still provide lots of cost down and bring in better process control if done correctly.
In all Outsourcing is still a concept very much viable and Outsourcing organizations are becoming smarter and efficient and are now offering better quality, process, technology and cost optimization. So future of the industry looks secure and growing.
There are few factors which make the industry growth in future very much possible:
Business Expertise: Organizations has gained lot of expertise in handling outsourced work since it started in last decade. Now organizations have matured in handling the business process of identifying opportunities to reduce waste and streamlining the process in an efficient way. In short they have moved from being the fresher in the business and doing the work assigned to them to subject matter expert and now doing not only the work assigned to them but also with their past experience telling clients how to do business more efficiently. Now they have set examples of managing outsourced work. It’s a remarkable achievements and this opens the door of bigger and better future for the industry.
Globalization is still on: The Recession has been very severe but still globalization is the buzz world and if I say it is the key to make your company stronger in recession. Organizations with excellent global delivery model in outsourcing are still the easiest way for organizations to outsource. Outsourcing though doesn’t cover the complete globalization but still provide an excellent start for the companies willing to go global and is also cheaper and now more reliable way for companies to achieve their global expansion plans.
Technology and Skills: It is ironical that outsourcing companies like Wipro and Infosys are now developing technologies that can challenge the best in the business to collaborate or compete directly. Recent example is Wipro tie up with Oracle with which Wipro will deliver PeopleSoft HR to various client bases using Wipro BPO model.
Pressure from Competition to reduce operating costs: Outsourcing saves money is still true and if your competition is saving money more then you then you have to find ways to reduce yours. Finding the right outsourcing partner, finding the right outsourcing process and doing it at the right time are the three keys. Outsourcing decisions can still provide lots of cost down and bring in better process control if done correctly.
In all Outsourcing is still a concept very much viable and Outsourcing organizations are becoming smarter and efficient and are now offering better quality, process, technology and cost optimization. So future of the industry looks secure and growing.
Wednesday, July 1, 2009
OutSourcing Industry: The Challenges
Outsourcing industry has been steadily growing since past decade. After becoming the toast of the discussion in every big and small company during last decade the things are coming to somewhat slower growth in these recessionary periods. There are many experts who are now looking at the whole outsourcing model with skepticism and predicting a slower growth with more focus on near shore sourcing.
Outsourcing mainly started with the concept of lower labor cost in countries with abundance and untapped human resource. The benefits outsourcing brought for organizations were huge in terms of cost. Same work can be done far more cheaply at remote location the world. This changed the way businesses were done globally. Each
Organization moved from an in-house model to a hybrid model of strategic in house work and non strategic work outsourced. The hybrid model was huge success and outsourcing industry registered huge growth in last decade due to it. The world has become a global place where everyone is connected and companies are present around the globe.
The hybrid model received the most severe test now in this recession. There were few reasons
1. The cost benefit of moving non critical business outside has been long utilized and the cost advantage of the organization has been largely negated with the fact that every competitor is following the same model.
2. There were some inherent inefficiency in the system due to the fact work was done outside the organizations and there were always stuff lost in translation. However these inefficiencies were either too meager (in terms of cost advantage) or were handled well that nobody counted it in the issue list.
3. The cost of doing the work near shore has dramatically increased with high unemployment rate resulting in cheap labor and more near shore facilities available now.
4. Huge Fluctuations in Dollar and other currency in past few years have affected the bottom line of most of the Organizations. The outsourcing model is well built to manage some small fluctuations but kind of fluctuations seen in last few years are hurting the model a lot now.
5. There is huge internal social pressure also for organizations cutting cost and jobs and moving them to different country.
These issues had lead to considerable slow in outsourcing industry. But with these negatives there are a lot of strong points also which will ultimately decide the future of this industry going forward. I hope to highlight those points in my future blogs.
Outsourcing mainly started with the concept of lower labor cost in countries with abundance and untapped human resource. The benefits outsourcing brought for organizations were huge in terms of cost. Same work can be done far more cheaply at remote location the world. This changed the way businesses were done globally. Each
Organization moved from an in-house model to a hybrid model of strategic in house work and non strategic work outsourced. The hybrid model was huge success and outsourcing industry registered huge growth in last decade due to it. The world has become a global place where everyone is connected and companies are present around the globe.
The hybrid model received the most severe test now in this recession. There were few reasons
1. The cost benefit of moving non critical business outside has been long utilized and the cost advantage of the organization has been largely negated with the fact that every competitor is following the same model.
2. There were some inherent inefficiency in the system due to the fact work was done outside the organizations and there were always stuff lost in translation. However these inefficiencies were either too meager (in terms of cost advantage) or were handled well that nobody counted it in the issue list.
3. The cost of doing the work near shore has dramatically increased with high unemployment rate resulting in cheap labor and more near shore facilities available now.
4. Huge Fluctuations in Dollar and other currency in past few years have affected the bottom line of most of the Organizations. The outsourcing model is well built to manage some small fluctuations but kind of fluctuations seen in last few years are hurting the model a lot now.
5. There is huge internal social pressure also for organizations cutting cost and jobs and moving them to different country.
These issues had lead to considerable slow in outsourcing industry. But with these negatives there are a lot of strong points also which will ultimately decide the future of this industry going forward. I hope to highlight those points in my future blogs.
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