Forrester: Sourcing departments fear loss of control with SaaS

Businesses’ traditional sourcing departments fear a loss of control of software-as-a-service systems, Forrester analysts have warned ahead of a major conference next week.

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Businesses’ traditional sourcing departments fear a loss of control of software-as-a-service systems, Forrester analysts have warned ahead of a major conference next week.

Vendor management needs to be transformed to cope with the vast changes brought about by SaaS, the analysts warned.

Liz Herbert, a principal analyst at the company who will speak on day one of Forrester’s Sourcing and Vendor Management Forum in London, said sourcing and vendor management teams were struggling to cope with user self-provisioned technology – including SaaS and Web 2.0.

Herbert told Computerworld UK that the teams had “less experience” in these areas, in spite of the technologies’ growing popularity.

The major challenge was that different business departments were bringing in these systems, often with little or no reference to typical IT sourcing teams, she said.

“With all sorts of services, employees are self-provisioning without any involvement from IT,” she warned. “While these systems can provide a lot of value, businesses do need a clear, structured approach.”

Sourcing and vendor management teams needed to “make sure” departments “articulate the value” of any technology they want to bring in, she said.

Those teams also needed to remain in charge of managing the portfolio of suppliers, and as part of this they needed to be part of evaluation processes. There also needed to be a close management of the cost of additional functions as they are purchased over time.

“There is definitely a feeling of a loss of control,” Herbert warned. “Sourcing teams must be part of the process because they can help with due diligence.”

One of the biggest “pain points” so far was “system control going to other departments”, she said, particularly sales operations plumbing in their own large SaaS systems.

Education of all people involved was crucial, she said, and needed to address the benefits and impact of the new technology. She added: “Often businesses are still trying to force SaaS into old-fashioned hosting templates, so there need to be some real changes.”

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