Thursday, May 14, 2009


I feel that SaaS can help Indian outsourcing companies move to the next step in the value chain. Indian companies have long been known for excellence in execution, and while they have made significant investments to build domain knowledge they still lag significantly to the Accenture’s, KPMG’s and the boutique consulting companies of the world, to provide business and process consulting. More often than not, the Indian IT majors still only execute projects that have been designed by a firm that has domain, business and process consulting expertise.

If they want to take a quantum leap and provide value across the spectrum, they would do well to embrace SaaS. What I propose is a ‘SaaS Apps Store’ that borrows from the iPhone App Store model. How will this work for everyone? There are three players in this ecosystem and let’s look at each one of them.

Customers --> Most organizations today outsource/offshore some component of their IT and/or Business Process (BPO). They use IT consulting organizations to implement and support their Enterprise Applications and technology initiatives. A lot of the projects involve off the shelf products like Oracle, SAP, Microsoft for ERP, CRM, EAI, BI/DW and other such initiatives. However a significant amount of dollars are spent to design and develop custom applications. Now if customers can work with their existing IT consulting partner and have the choice of selecting a SaaS based app from the consulting companies 'SaaS Apps Store' to meet their need, it would make a lot of sense for a company. Traditionally, these solutions were being built from the ground-up by their consulting parters or internal IT team. With this model, they can save on time/cost and leverage cutting edge technology and solutions to meet their needs. The clincher being that the Consulting companies provide EAI service offering (BEPL/PIPs/Open API's etc) that offer pre-built integration packs that reduce the complexity of integrating new apps to existing apps.

Partners --> SaaS organizations today have a problem with visibility. Not many CIO's are ready to accept SaaS as a mainstream strategy due to lack of knowledge and visibility. There is also the concern about integration and the ability to customize. Now, by aligning with large consulting companies, they can achieve multiple benefits. They can focus on product development and leverage the consulting organizations SI capabilities and sales capabilities. They can focus on training the consulting organization's large workforce to achieve their objective of having a large consulting team.

Indian IT Outsourcing majors --> By establishing a 'SaaS App Store', Indian IT majors can provide its clients with a range of offerings that will be unparalleled in scale and ready-to-use solutions that require minimum customizations. They can provide EAI services and pre-built integration packs that complete the offering. While the Indian IT majors continue to offer consulting services for large ERP/CRM implementations, they can leverage SaaS based products to offer standardized solutions that can replace a portion of custom software development initiatives and provide more value to its clients.

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