Change Management in a SaaS Environment

The growth of businesses moving to software as a service (SaaS) as part of their IT strategy was reflected in research firm IDC’s 2009 projection that global spending on cloud computing would reach $42 billion by 2012, and that over 50 percent of  companies planned to outsource applications to SaaS (software as a service) providers.

Application out-sourcing, whether to modern SaaS companies or to traditional outsourcers, invites risk in the management of software assets, custom software development---and of course, the management of change as new versions of software are developed to meet emerging business needs. Why? Because the fundamental need to document, track and manage software doesn’t change. It only becomes more complex because off-premises management is now involved with SaaS.

SaaS providers that host applications and development come in all flavors. Some provide full software development services (including software changes)   to companies wishing to outsource applications. Others say that it is important for companies to maintain their core applications internally—while the vendor offers modular add-on applications that a multi-tenant corporate clientele can subscribe to.  In either case, companies need to have a best practice in place to be able to track, monitor and manage changes to software—but does it?

“We recently made the decision to replace an application with a SaaS provider that would provide us with an acceptable software package at an economical price,” commented one East Coast business manager. When I asked the manager if they were planning to customize this SaaS application, he said “yes,”—but acknowledged that he didn’t have formal SLAs in place with the vendor for audit trails and change management of the software.

This is not an isolated case, since SaaS adoption is often initiated by end business units, not IT. “In all the SaaS deals we have done with companies, not one has been initiated by corporate IT,” said a Washington D.C.-area SaaS provider. ‘It is always a business unit that contacts us for a discussion of services.”

Nevertheless, IT ultimately is the one to execute and track software revisions. Change management “check-list” items for SaaS that should be on every CIO’s list are:

- An automated change management system at the SaaS provider to track and monitor software changes

SaaS providers that provide software customization for clients should have an automated software change management system in place that IT can use to make and monitor requests. The change management system works best if it available on-demand to internal IT staff via a Web portal. The system should give IT complete visibility of all software changes, the stages of completion they are in, and when they will be deployed.

- Clearcut accountabilities for both the SaaS provider and the enterprise when a software change goes wrong

Corporate IT and the SaaS provider should walkthrough the software modification process and document the accountabilities for each party, such as who is responsible when software fails.

- Cost and prioritization when a software change becomes necessary and immediate

There are times when sudden business changes spark changes in software that have to be installed aggressively. In these cases, abiding by a SaaS vendor’s schedule for a pool of clients who all want changes is not an acceptable solution. Be sure to negotiate up front with the vendor to cover these special circumstances—and what it will cost you on your end if you require custom software development that is beyond the vendor’s typical scope.

- Ownership of custom software changes

If you pay for a software change and it is expressly for you, make sure you own it. If the vendor wishes to resell it to others, you should strike an agreement where you license the software back to the vendor and receive revenues—at least up to  the level of what you  expended for the original work. In some cases, you might want to specify in writing with your vendor that you are not willing to share your custom code.

- Leaving a SaaS provider

If you ever have to leave your SaaS provider, you don’t want to discover that custom-developed software you paid for was improperly documented in a change management system. Demanding excellent change management and documentation of custom code development are both elements of comprehensive SaaS contracts and SLAs.