SaaS Integration - Yes, It's an Issue, But...

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Any time I -- or, more accurately, anyone -- writes about SaaS and integration problems, the SaaS providers quickly jump in with the "yeah, buts." For instance: "Yeah, but there are integration problems with traditional vendors, too" or "Yeah, but we offer integration as a service/pre-packaged integration" or "Yeah, but one of the business drivers for SaaS is data consolidation/integration."


Please understand -- I'm not contradicting those statements. They're valid points, actually.


Yeah, but ... there are still integration problems with SaaS.


Dennis Hall, the director of Business Development at Pervasive Software, attended the Softletter SaaS conference in Atlanta last month. In a recent blog post, he wrote, "Almost everyone at the SaaS conference had integration pain" despite the fact that "Executives from Zach Nelson (SMB XML) to Tim Minahan (SupplyExcellence blog master) have been saying integration for SaaS was a minimal issue or solved since 2004 and 2007 respectively."


The pain points fall on both sides of the SaaS relationship, it seems. Customers are now demanding SaaS providers engage in a proof-of-concept phase to show the SaaS application will work with their internal data. This, in turn, is causing problems for SaaS vendors, who are facing extended sales cycles, implementation delays and sticky integration problems with legacy application, according to Hall.


This paragraph from Hall's blog post says a lot about the problems in integration and SaaS negotiations:

"After years and years of software salespeople telling customers that integration was "no problem" and the customer finding after the deal closed that integration was going to cost an additional 30-50 percent of the entire deployment budget, customers are increasingly keen to understand (in detail) how SaaS vendors can tap into key systems, such as CRM, Inventory or A/R. (side note: even today almost all of the software salespeople I've spoken with hope and pray that "integration stuff" doesn't come up until after the deal is sealed!)"

By the way, an annotation in the post attributes that 30-50 percent statistic to Gartner.


Hall seems to be writing more to SaaS providers than their customers, which is why business customers and IT divisions should read his post: It's honest about just how much trouble SaaS providers are having with integration.


Nobody, it seems, is exempt from integration hassles, so it's probably not fair to judge SaaS on that alone. Nonetheless, it must be considered and addressed.


Jeff Kaplan, managing director of THINKstrategies and SaaS Showplace, told IT Business Edge in a recent interview that large companies have been using SaaS successfully:

"They've actually been doing so for quite some time, they just haven't been very public about it. They tend to not be very public about these things because they don't want every vendor to come knocking on their door. And they were taking the time to test how well SaaS would meet their needs and how well it would grow, to scale to meet their requirements."

That last part -- they were taking the time to test how well SaaS would meet their needs and how it would grow -- is key. There are solutions that can help with integration -- see How to Tackle the SaaS Integration Problem for more on that - but planning is the best way to ensure the solution fits your need. Taking your time could pay off in a partnership that will serve you well, long term.


But act too quickly and you may find yourself in a situation like Hall describes:

"I've seen such implementations delayed by over 6 months with costs in excess of over $100,000 to implement. After the "pre-migration" work is done, the vendor writes scripts and lays eyeballs on the incoming data streams for information that does not fit or comply with the business rules. Most times, bad data does get through resulting in unhappy customers (buyer's remorse anyone?) and increased support costs (fix it now or pay later!)."

When it comes to integration, it's everybody -- buyers and sellers -- beware.