Still, the data from one source almost always has to be altered in format so that it can be used by the data sink. Exchanging data with a SaaS application tends to involve more than a few degrees of data transformation. For example, one of the existing on-premise systems might exchange data using the EDIFACT standard, while the SaaS application uses an incompatible XML-based format to send and receive data. Obviously, data derived from an on-premise system must be transformed before it is transmitted to the SaaS application. This goes for information traveling the other way, too.

ERP Software

Software as a Service, Part V

Transforming data is a process with more than one step. To begin with, the incoming data has to be validated against the proper data formats and schemas to guarantee that it will be usable after it has been transformed. Secondly, the data can be enhanced by combining it with data from another source. And, finally, the data itself is converted to the target format.

A subscription to a Software as a Service application is equal to storing all business data outside the control of the local network, within the Internet cloud. Integration architecture is the term for the specification of how this outside data is re-entered into the local infrastructure, in a way that infrastructure components can cooperate with one another and each component has complete access to the data it needs for optimum performance. Indeed, integrating a SaaS application will mean creating data dependencies that require data to be synchronized and moved between the SaaS application and one or more in-house applications in order to facilitate processing. An integration broker is often used to manage this movement of data and system integration.

The same principles that make it practical for a business to utilize services from the Internet cloud make it possible to offer services to the cloud, too. And so, another way that businesses can benefit from SaaS is by becoming specialized Software as a Service providers, too. Providing SaaS may benefit a business that has dependent entities, for example franchisees or resellers—with which it has strong business ties, but poor process automation and information transfer. Better IT relationships between central businesses and its entities could raise the quality of services by improving the conveyance of information and facilitating some definite processes to be automated.

By providing SaaS, central companies can host specialized applications or business functions such as inventory control, accounting, promotions, loyalty programs, and so on—applications that franchisees around the world can access with simply a run of the mill personal computer and a broadband connection. When the dependent entities use these applications, the main company receives enhanced feedback and data that help contribute to more accurate and valuable business intelligence.

A business could also consider becoming a SaaS provider if it has developed a unique IT asset that could be monetized if it was provided to other businesses. For example, a bank that has developed a sophisticated fraud-detection system for internal use might develop a commercial version and offer it for subscription as a SaaS application.