SaaS Sprawl: Is History Repeating Itself?

SaaS SprawlRemember the late 1990s and early 2000s? Back then, CIOs and business leaders were making their mark by implementing ERP software. This software automated key business functions like finance, HR and the first wave of cheap, easy-to-deploy niche applications which specialized in specific business processes not adequately covered by ERP. Companies spent a ton on these on-premises enterprise apps, which took root, multiplied, and spread aggressively across organizations.

But there were downsides to this app explosion. IT executives struggled to hook all of the programs together and not crash critical business systems in the process. Reports of epic ERP failures struck fear into the hearts of CIOs everywhere. And a lot of data got scattered across individual applications, making it hard to leverage.

Yet thanks to the gradual consolidation of vendors, the invention of the integrated software suite, and just sheer hard work, IT largely succeeded in taming the “app sprawl” of that era. Application portfolio consolidation was the rallying cry and CIOs, CFOs and CEOs really started to pay attention to the importance of optimizing at the enterprise level, rather than at the local level. As a consequence, more than a few CIOs earned the respect and admiration of CEOs. Even some boards of directors took notice of this new breed of executive. In truth, though, CIOs had only succeeded in solving a problem that IT had created in the first place!

Back to the Future

What did CIOs learn from this exciting time? Not very much it seems. Why? Because app sprawl has returned. In fact, it’s arrived in a new, more virulent form some have called “SaaS Sprawl.”

Today there’s a cloud-based app for everything and business leaders are clamoring for all of them: Salesforce for CRM, and best-of-breed cloud apps for every other conceivable function, from procurement to expense tracking to note-taking. Layered on top are all the new social, mobile and collaboration apps – every one of them “cloud-based.”

In an effort to be accommodating to business leaders, IT is making the same mistake it made years earlier: Deploying too many apps, and investing too much in tiny tweaks that create local improvements but kill any notion of enterprise agility. Seemingly overnight, a gigantic wave of cloud apps has swept across the business landscape. And once again, CIOs are losing sleep over how to tie these apps together and untangle the spaghetti-like flows of data between them.

History Repeats Itself / Déjà Vu All Over Again

Yes, it looks like history is repeating itself. Or at least rhyming, since the surrounding business and technology landscape has altered significantly. One of the big differences today is the changing role of the knowledge worker. In the ‘90s, the objective was to get everybody to do things the same way in every office. This boosted efficiency, cut costs and improved governance for back office functions like Finance, Procurement and HR and can be considered the back office equivalent of manufacturing automation from decades earlier, but these benefits have largely been harvested meaning further investments in tweaking applications yield minimal benefit.

Now it’s about digital transformation – a true game-changer – and that requires knowledge workers to be more flexible and empowered. In my view, to be competitive in the new economy, people need three things:

  • What I need to know
  • What I need to do
  • How to get it done

All these things require leveraging data. The challenge with SaaS sprawl is that the necessary data is scattered across dozens of cloud apps, making it tough to find, analyze, and deploy. Think about it: Do you know exactly which cloud apps hold your customer data? Your employee data? Your supply chain data? These are table stakes but how about: How are customers using your products? What are they saying about you? What’s the most profitable way to deliver your service?

Moreover, there’s exponentially greater quantities of data in play today, not only inside your organization but outside of it. Every social media interaction, intelligent-machine feed, and website click adds to the mountain of data.

Instead of launching and tweaking new cloud apps, CIOs need to focus on seizing control of their data and unlocking its potential to transform the business. This will be no trivial task in the age of the cloud. Remember that a critical mass of your data may still reside in your on-premises systems, so integrating these two worlds will be key to exploiting your data fully for competitive advantage.

Cloud data integration platforms and tools will help CIOs combat SaaS sprawl, allowing enterprises to systematically mobilize and drive value from data scattered across cloud and on-premises environments alike. Think about that! You don’t have to choose between a monolithic suite that is “good enough” and a portfolio of best of breed apps. Done properly it’s possible to access data from across these applications for insight and analytics and to integrate them in a way that data is accessed seamlessly across applications. This approach will also go a long way toward reining in SaaS sprawl and making it easier for businesses to harness data for digital transformation.

This time around, solving the problem of app sprawl will be truly game-changing for the digital enterprise.

Is history repeating itself at your enterprise? I’d love to hear from you.