Wednesday, October 14, 2009

SaaS - New Arsenal for the Line of Business Owner - NO Internal IT Chargebacks!!!

This was a wonderful post by the National Accounts Sales Manager from a reseller of CAPSYS that is noteworthy of posting.  The bottom line, two significant lessons were learned here with this reseller and his customer:

1) Internal IT costs that are typically assessed to the Line of Business Owner with traditional CAPEX purchases of Global 2000 corporations are becoming increasingly challenging for line of business owners to justify implementing any IT solution. Let's face it...we are all plagued with budget crunches.  In this example, SaaS is a genius maneuver by the Line of Business CAPEX means no IT internal charges. Now that is real tangible savings a Line of Business Owner can bank on!

2) Get Business Done NOW rather than Later!  The SaaS alternative continues to provide a unique way of getting business today rather than waiting for strigent CAPEX budgets to get approved any time soon...seemingly an impossible task in today's economic climate. Get the job done immediately using the "SASSY alternative"...or forever wait...this Global 2000 client decided that NOW was the better option and SaaS was the only way to do it.

Read the enlightening story below I received from the National Account Manager for IDT:

by Michael F. Nolfo - National Account Manager, IDT

I work for a Content Management & Capture Reseller that provides the traditional capture on-premise solutions as well as CAPSYS CAPTURE. The CAPSYS SaaS offering in particular has recently provided a breath of new life into two of our existing document capture clients. For both clients, sales growth was stagnant. These clients were not expanding their capture systems and were struggling with the increasing cost of capture in light of declining revenue, internal IT resource cut-backs, etc. Both customers were struggling to justify renewing their annual capture maintenance renewals. Basically their business needs changed and the capture solution, that we originally sold them years ago, no longer met their needs. As a solution provider, it was our obligation to present another way of doing business that could meet these challenges.

For the first client, the overall scanning volume was declining (do to a move to electronically generated records) but there was a new requirement to expand capture to new remote locations. The problem was the current capture software manufacturer’s licensing model was costly, inflexible and could not meet their changing business needs. This client also had to pay annual IT charge-backs to maintain the multiple servers environment needed for their capture application. The cost to maintain the server infrastructure for their capture environment was increasing and was nearly double the cost of the annual software assurance renewal. In short, it was becoming too expensive to maintain scanning technology. By introducing the CAPSYS SaaS option our strategy was simple- remove the datacenter, infrastructure and ongoing professional services costs to upgrade & maintain the capture software by moving the customer to a hosted capture solution. After proving that the CAPSYS software had all of the necessary functionality (bar-code recognition, page separation, zonal OCR and the ability to generate fully searchable PDFs) they then analyzed the total cost of ownership for Capture SaaS. Once the business factored in their infrastructure costs we were able to reduce their costs in half with the SaaS model; all while expanding capture to two additional remote sites through the CAPSYS web client. The customer can now expand capture to new departments and add scanning volume at no additional cost. Furthermore they can add users & new areas of the organization for a small monthly incremental cost. This has allowed us to once again grow our capture solution in the organization.

 Here are the actual cost savings the customer realized:

Actual Total Cost of Ownership FY2010/11 for Global 2000 Customer

Existing Legacy Capture Annual Software Assurance  $26,845.00

Hardware Server Cost for Legacy Capture System (1 physical server and two virtual servers)  $  3,700.00

Annual Internal IT Chargebacks  $20,000.00

Professional Services to Upgrade  $  8,000.00

Total  $58,545.00

CAPSYS Monthly SaaS Fee   $18,792.00

Server Costs  $  -  

Annual IT Costs  $  -  

Professional Services for routine Upgrades, Patches, etc.  $  - 

Total  $18,792.00

Total Annual SAVINGS  $39,753.00

The second client drastically reduced their IT staff and was unable to effectively manage their current software applications. To meet this need they decided to move to a SaaS model for their content management solution but did not know what to do with their on-premise capture system. By providing the CAPSYS SaaS option, we were able to provide a completely integrated hosted capture & ECM solution. This move freed their remaining IT resources to tackle their main line of business projects (e-commerce initiatives) that is essential in running their business and generating revenue. They have since expanded this hosted solution to capture data from their remote field offices for their property management business. Users can now capture content from a laptop and small portable scanner and have no need to be located at a scanning facility. This keeps their workforce mobile and the cost of business down.

While these are only 2 examples there are other good business cases that we have since identified. While SaaS is not for everyone or every situation, it should be strongly considered when analyzing how to best meet your clients needs. For us, it has provided us new growth opportunities that simply did not exist with the traditional capture players.

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