Best Practice Report

Sourcing Professionals Need To Help Business Users Negotiate SaaS Contracts

May 17th, 2007
Liz Herbert, VP, Principal Analyst
Liz Herbert VP, Principal Analyst
With contributors:
Christine Ferrusi Ross , Francesca Bartolomey

Summary

Part of the appeal of the software-as-a-service (SaaS) model is that it enables companies to leave the management of their IT framework to someone else. However, one of the problems with this is that companies can lose control over things like data, source code, planned maintenance windows, and uptime. Also, we've uncovered that many customers do not employ best practices when negotiating service-level agreements (SLAs) with their SaaS vendors. Business users are going it alone without working with the IT organization to ensure that they know what service levels and contractual guarantees to seek from their SaaS providers. But firms can regain control of their environments by drafting a full-service contract that demonstrates clear, measurable, and enforceable metrics.

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