Today’s installment of Whitepaper Wednesday is written by Erick Opdenbosch, SPSM. Please help me welcome back Erick for his second contribution to the Purchasing Certification Blog!
Welcome to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. Today, I will be reviewing a whitepaper entitled “Contract Management in the Cloud: The Contract Management Impact of Moving into the Cloud” from Ariba.
On November 3rd, I talked about contract management and how it helps companies comply with the Sarbanes Oxley Act of 2002. This time, I found a whitepaper that focuses on the latest technological model that provides a solution to it. The model is known as Software-as-a-Service or Cloud computing (SaaS/Cloud model). Although the whitepaper does not provide actual proof on why Cloud computing is the best option, it sure points out the right questions to ask in order to determine its success.
The Whitepaper starts by recalling one of the basics in procurement – Internal Communication. It is important to remember that, even though it is a task that is performed by purchasing professionals like us, sourcing gathers information from many areas in the company. Finding if the SaaS/Cloud model is appropriate should not be an exception. The whitepaper states that “… the contract management group (i.e., Cross functional team) should consider creating a check list that will enable the business functions to acquire the tools and benefits they seek.” It would guarantee that all stakeholders are comfortable with the final decision.
But, what should the checklist contain? Well, here is where the whitepaper comes in handy. The whitepaper argues that the Saas/Cloud model has an impact on three major areas. For each one of them, it provides important questions to consider.
1. Data Considerations
All organizations are cautious about sharing their information. The SaaS/Cloud model as stated in the whitepaper, “by its very nature often includes open platform sharing.” Thus, it raises the following issues:
• Where is the data stored?
• With whom is data shared?
• Who technically ‘owns’ the data?
• When and how is data archived?
• How quickly can data be accessed or retrieved?
2. Negotiating terms and service levels
Since the SaaS/Cloud model is quite new, some may think that it has the same conditions as a software solution. Actually, the new model goes far beyond. The terms and conditions have huge differences and the whitepaper includes a table that shows them (see below).
However, there is one thing that is common to both solutions – Stability. The purchasing agent, as the whitepaper says, should take in consideration: “… a provider goes out of business or is acquired, what recourse do you as a customer have? What assurances do you have that you will be able to access and retrieve your data?”
3. Risk Allocation
It is important to understand that “no system is foolproof.” As a result, the whitepaper advises to ask, “how is the provider expected to respond in the event that a failure or breach takes place?”
Also, the whitepaper asks, “How can areas of risk be identified and mitigated prior to an event?” The SaaS/Cloud Model offers a central repository for search and reporting as well as workflows for approvals and electronic signatures. It has the potential to become a great tool. But that sounds a lot like a sales speech. As purchasing professionals it is imperative to evaluate if, in fact, the model provides a solution or an improvement to our operations. Here is the link to the whitepaper (no registration required): http://www.ariba.com/resourcelibrary/views/resource_library_asset_brief.cfm?asset_id=687
|Software Solution||SaaS/Cloud Model|
|License fees||Subscription and pricing terms|
|Maintenance fee||Data availability/uptime|
|Upgrade fees||Data storage, retention, and retrieval|
|Software installation support||Data encryption and security|
|Third party outsourcing||Provider stability|