5 Things Large Enterprises Need To Know About SaaS

Next week I’m heading down to L.A. for the annual InformationWeek500 conference. Sony Pictures, H.B. Fuller, and Flextronics will return this year to participate on a Workday customer panel, and Valspar will make its debut on the panel. Last year’s panel was a success, with IW500 attendees packing the room to ask our customers about their decisions to go with SaaS for their core HR systems.

A main reason the panel was popular, I believe, is that the three panelists were from large, multinational companies. For companies with more than 5,000 employees and operations in multiple countries, the requirements for core enterprise systems delivered in a SaaS model are different than those for a SaaS that’s an add-on to a core system. And their concerns are universal: analyst Brian Sommer captured the questions large companies ask in a blog entry, and these could have been a transcript of the questions last year’s IW500 attendees asked our customers.

For large, global enterprise deals, customers need answers. Based on customer discussions and what I’ve learned in my role as CTO at Workday, I’ve developed my own list of five key areas (some similar to Brian’s list) that a SaaS provider should be able to discuss with confidence:

  • Integration. A core system delivered as SaaS will need to integrate with many applications. Large enterprises are acutely aware of the high cost of building and maintaining integrations, and they’re not sure whether cloud computing makes the issue better or worse. A SaaS provider worth talking to has worked through the issues and offers more than just an API and consulting services to support enterprise integration.
  • Performance and Scalability. Global enterprises bring a high level of complexity to this requirement. With a workforce spread throughout countries around the world, a SaaS vendor must account for performance outside the walls of its data centers and beyond regional high-bandwidth connections, to encompass performance across the global deployment. A SaaS provider should be able to explain to prospects and customers how the system it demos in San Francisco will behave when it is accessed in production by workers in Beijing.
  • Local Data Processing and Data Privacy Regulations. Security is always the primary concern in SaaS conversations, but for larger multinational firms the discussion goes beyond data security to include the SaaS vendor’s ability to understand varying local data processing and privacy regulations, and assist customers with complying with these regulations wherever they do business.
  • Configurable Business Processing. Large enterprises need to know that they can configure process automation to fit their business. Business processes can vary by organization or by geography in a big company, so it’s not good enough for a SaaS provider to merely change a standard process once for the customer. And, it should explain how it can deliver this configurability without breaking the SaaS model.
  • IT Involvement. For core enterprise systems, a large company’s IT department needs to be involved and in control of the deployment. Even though SaaS moves mechanical maintenance responsibilities to the vendor, the IT department retains the role of data controller. If the SaaS is too much of “black box” solution, IT can’t retain this ownership.

At last year’s IW500 conference–thanks to our customers’ honest answers to audience questions—I believe the panel’s audience members left realizing that Workday understands these five critical areas and has answers for them. Eyes were opened to the viability of SaaS for large firms–a huge step forward for the Workday message.

While we expect to hear some of the same questions about SaaS selection for this year’s panel, we hope to focus the discussion on living with SaaS after the selection. Over the past year, H.B. Fuller and Flextronics have expanded their global rollouts while participating in three Workday updates. Sony Pictures went live last year and has gone through two Workday updates, supporting 5,300 employees in 17 countries. Valspar has just gone into production with Workday for 4,000 employees. While these customers showed how SaaS is viable for large enterprises last year, this year they’ll show how they’re using SaaS to adopt new functionality at a pace that is unthinkable in the world of on-premise ERP.

Large enterprises face a higher bar to making SaaS work. A SaaS provider that demonstrates it can clear that bar is one worth talking to.