"SLAs are always tricky, but we've been very happy with the work we've done with them," he said. "Our SaaS vendors have got an army of database and network admins and gobs of bandwidth and redundancy and those types of things inside of those applications. We let them focus on that and we focus on how to take the applications and platform and better apply them to our business environment."
About two and a half years ago, Menefee signed up for hosted applications from Salesforce.com, PeopleSoft and Peake Software, and secured SLAs from each vendor, which he calls a key step when adopting SaaS products.
"Usually, the core thing I'm looking for in any agreement with a hosted solution is uptime guarantees, business continuity, such as disaster failover if they have an outage, data protection inside of the system and response time to issues with customer support," Menefee said.
And because as a health-care company The Schumacher Group has to comply with data privacy, protection and retention regulations, Menefee's SLAs with his SaaS vendors also require regulatory compliance. He estimates that his SLA with Salesforce.com is about 75 percent the vendor's standard agreement and 25 percent customised requirements from The Schumacher Group.
Because there are many moving parts - and therefore many possible causes for performance problems - in SaaS suites, Menefee recommends having an IT group in charge of troubleshooting. For example, a hosted application might malfunction for reasons not related to the SaaS vendor. The problem could be in a user's PC, the company network, the ISP's (Internet service provider's) infrastructure or in the Internet's infrastructure itself.
Menefee also recommends requiring that the vendor provide regular reports on their service delivery. "When you're looking at the service-level guarantees, you really want some type of report that comes back to you about what their service level was. You want to have your own internal monitoring processes put into place. You also want an action plan if there's an outage for business continuity," Menefee said.