With appropriately drafted SLAs (service-level agreements), health-care company
The Schumacher Group
has used hosted applications successfully for over two years.

Unlike many of his peers who remain wary of SAAS (software-as-a-service) products,
The Schumacher Group Chief Information Officer Douglas Menefee has taken advantage
of hosted applications to let his IT team do less software maintenance and support
and instead focus on more valuable development and integration work.

"SLAs are always tricky, but we've been very happy with the work we've
done with them," he said. "Our SAAS vendors have got an army of database
and network admins and gobs of bandwidth and redundancy and those types of things
inside of those applications. We let them focus on that and we focus on how
to take the applications and platform and better apply them to our business
environment."

About two and a half years ago, Menefee signed up for hosted applications from
Salesforce.com, PeopleSoft
and Peake Software,
and secured SLAs from each vendor, which he calls a key step when adopting SAAS
products.

"Usually, the core thing I'm looking for in any agreement with a hosted
solution is uptime guarantees, business continuity, such as disaster failover
if they have an outage, data protection inside of the system and response time
to issues with customer support," Menefee said. And because as a health-care
company The Schumacher Group has to comply with data privacy, protection and
retention regulations, Menefee's SLAs with his SAAS vendors also require regulatory
compliance. He estimates that his SLA with Salesforce.com is about 75 percent
the vendor's standard agreement and 25 percent customized requirements from
The Schumacher Group.

Because there are many moving parts -- and therefore many possible causes for
performance problems -- in SAAS suites, Menefee recommends having an IT group
in charge of troubleshooting. For example, a hosted application might malfunction
for reasons not related to the SAAS vendor. The problem could be in a user's
PC, the company network, the ISP's (Internet service provider's) infrastructure
or in the Internet's infrastructure itself.

Menefee also recommends requiring that the vendor provide regular reports on
their service delivery. "When you're looking at the service-level guarantees,
you really want some type of report that comes back to you about what their
service level was. You want to have your own internal monitoring processes put
into place. You also want an action plan if there's an outage for business continuity,"
Menefee said.

Fortunately, The Schumacher Group hasn't experienced any serious performance
or availability issues with its SAAS products. On the contrary. "The performance
and uptime of our hosted solutions are much higher than our on-premise solutions,"
he says.

Still, having the SLAs is a must, in case something goes wrong. After all,
its hosted software is used for critical functions at the company, which provides
emergency medical staff and management services to hospitals.

With Salesforce.com's Unlimited Edition, about 250 employees ranging from data
entry staffers to senior executives perform a wide variety of business functions.
Salesforce.com's suite is also integrated with other software platforms, including
the other two hosted ones: Peake Software's Tangier schedule manager and Oracle's
PeopleSoft.

Of course, companies must evaluate what software makes sense for them to access
on a hosted model. The Schumacher Group has its share of applications that live
in its servers, although some of them could be hosted. For example, the company
has on its premises GE
HealthCare's billing Centricity Business because it is heavily integrated
with other applications and when it was bought, Menefee didn't consider that
the GE data center was designed to give the application a lot of third-party
connections.

Likewise, Hyland
Software's OnBase document management software is also offered on a hosted
model, but The Schumacher Group pushes such a heavy volume of images through
it that it would encounter bandwidth constraints if it wasn't installed in-house,
Menefee said.

The company also has in-house an array of Microsoft
server software, including Exchange, which is offered as a hosting service by
Microsoft partners, but it was already installed on premise when Menefee arrived
and he figures it would be more costly to switch to a hosted version.

Then there is hosted software he wouldn't consider because vendors can't offer
the guarantees and the compliance and auditing requirements of The Schumacher
Group.

Overall, he has been able to sign SLAs that meet all of his requirements. "I'm
extremely satisfied. We've had great success leveraging them to our advantage.
There are disadvantages associated with the hosted environments but we've leveraged
more advantages than disadvantages."

IDG News Service

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