A common sales pitch for software as a service (SaaS) is that it puts business people in charge of IT: armed with a credit card a HR director can buy the SaaS payroll management service they want cheaper and faster than going through IT.
But this idea of new technologies putting business users in charge isn’t novel. We’ve been here before and it didn’t pan out well, warns Dr Will Venters, lecturer in information systems at the London School of Economics.
The same rhetoric about giving business power over IT was used to sell PCs to firms in the 1980s according to Venters, who was speaking at the Efficient ICT 2012 last week. At that time PCs were being sold as a low-cost alternative to the IT-operated mainframes and mini-computers that dominated business at the time.
“Back in the 1980s the humble PC was sold on the basis that it challenged the relationship between the business executive and the IT department,” he said. For the first time, Venters said, the business executive had the power to buy a computer and put it on their desk: “It had better applications and they could procure the applications cheaply and easily themselves without needing IT executives to provide them.”
But what happened next is a cautionary tale to any IT chief struggling against a proliferation of SaaS within their organisation, said Venters.
“What we ended up with was a confusion of poorly connected, uninteroperable networks of these things,” he said.
Everyone had bought PCs at huge cost said Venters - leading to a glut of siloed PCs running a different platforms, the likes of CP/M, Unix, MS-DOS and OS/2, that were “costing a fortune” for the business to use and maintain.
“It led organisations to have to invest in IT departments to wrestle back control. I think that’s a salient lesson for us as we start signing up for SaaS and PaaS systems in the commercial market,” he said.
The dangers of staff using unsanctioned cloud services, so called shadow IT, are rightly a concern for IT teams said Venters. He reminded the audience of the ripple effect from SaaS purchases, how a decision to a simple SaaS purchasing decision could end up dictating corporate strategy.
“With SaaS you are signing up to someone else’s strategic agenda for how IT will develop,” he said.
He gave the example of a sales director who signs up to use a SaaS sales support system, which is then adopted by the rest of their team.
“If the sales director loves it and thinks it’s fantastic, all the sales people start using it and love it - you’re not going to persuade them to change it,” he said.
But if that sales support system starts offering social networking, for example, and the sales people like it, this could lead to them signing up for social networking, which then proliferates inside the organisation.
“Now strategically a decision about corporate communication infrastructure has now been made by a sales director,” Venters said.
The difficulty for the IT director is in communicating the long-term risk that comes with letting business people choose the cloud services they want.
“As an IT director how are you going to sit and discuss at the board level meeting the fact that the sales guys shouldn’t pay $10 to provide social networking across the whole organisation? It’s a complicated challenge.”