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SaaS in Public-Sector IT -- Part Two of Two

Government agencies eye software as a service to capitalize on Web 2.0 and change the way citizens and government interact.

by / July 1, 2009

The term "software as a service" and the acronym "SaaS" probably entered the IT lexicon somewhere around the turn of the century. According to the research report Service-Based Software: The Future for Flexible Software, which was written for the Asia-Pacific Software Engineering Conference in 2000, the words "software as a service" had been gaining steam since the Internet gave birth to a broad, open marketplace of "highly dynamic and agile" organizations that had to adapt if they wanted to compete globally. This necessitated the creation of more demand-centric software offerings provided over the Web.

Today SaaS is a common term in the IT world for applications that are installed on hosts' servers, as opposed to "on-premise" applications you've installed on yours. And SaaS, as a means to deliver software to organizations, has enhanced the way some governments inform the public, just like it has in Indiana.

The Indiana Office of Technology uses the company RightNow's on-demand CRM services to offer dynamically driven frequently asked questions (FAQs) across 75 state agencies. These FAQs are "dynamic" instead of "static" because the way they're organized changes from page to page, so the questions most viewed by visitors are positioned higher in FAQ lists on different agency pages.

"In this particular circumstance, we had the software experts hosting and managing the software for us, so we were able to get it very quickly," said Robert Paglia, a program manager at, the state's Web portal. He said the solution has been in use since 2007, and Indiana pays about $60,000 annually for it. "We purchased this as an enterprise solution, and that saved us a lot of money because if each one of our agencies would have purchased this software separately, obviously we would have had separate installations and many instances of this," he said.

RightNow also powers a live chat module on the state portal that users can access over the Web to communicate with state personnel. Paglia is pleased with both tools.

"The way we have measured our success with this particular product is the number of hits that we get on the FAQs, relative to the number of chat sessions that go to our state information center," he said. "We have more than 1,000 FAQs on our system right now, and last year, we had more than 3 million hits to those FAQs. Out of those 3 million hits, we had 13,960 live chats."

Things to Consider

So if SaaS can help government interact with citizens with such effectiveness, is there any reason why a jurisdiction wouldn't want to use it? It depends. Although SaaS can offer sufficient functionality without so many headaches, its relative simplicity may not be for everyone.

In many SaaS deployments, customers use the software in a multitenant architecture, meaning the same source code is used by multiple organizations. That means all users get essentially the same set of capabilities, although there's some degree of flexibility and customization. Therefore, SaaS may not be an ideal scenario for an organization wanting highly specialized applications.

Carlsbad, Calif., began using a hosted suite of e-mail, messaging and collaboration tools from Microsoft over the Web as a pilot project in spring 2009. Since these applications are hosted by a provider, the city doesn't task its own IT personnel with so many software-management hours. Gordon Peterson, Carlsbad's IT director, is pleased with this and the cost savings, but he admits one minor drawback.

"It ends up being a vanilla implementation. That could be good, and it can be limiting as far as how you can customize things. And I understand why it's that way; it makes it far easier to support," he said. "We used to be able to put

the little Carlsbad logo on things, and now, maybe we can't do it because everybody uses that same sign-in client."

Even so, that's often an acceptably small price to pay in the face of everything SaaS offers. After all, just because the application is shared doesn't mean the data is, and Carlsbad ultimately chose SaaS regardless.

"They're using the same application, let's just use e-mail as an example, but their data is still cordoned off, if you will, to be specific to that city or that state. It's just that they share the server with other customers," said Gail Thomas-Flynn, general manager of Microsoft's state and local sector.

But in some folks' opinion, there are situations where SaaS wouldn't be so hot at all. Accenture's Raj couldn't imagine a patient-service system in the health industry or a market-trading system in the finance area relying on a hosted server. If you have something that critical on your hands, it would put your mind at ease to be in complete control of it yourself.

"Those types of systems where recovery time is hugely the main focus -- I think that you'll see a trend where those types of things aren't the best model for SaaS," he said.

He may have a point. Anyone who uses webmail or social-networking applications has experienced periodic downtimes when the host performs maintenance or modifications. This is a possibility with other hosted tools as well. On June 8, 2007, sent a notice to customers about scheduled downtime from 8 p.m. to 2 a.m. that day, according to a blog posting by Dan Farber on ZDNet.

But downtime's not always on purpose. On Jan. 6, 2009, suffered a service disruption at 12:39 p.m., according to CIO magazine. A core network device failed because of memory allocation errors, and the backup plan to switch to a redundant system failed too. The provider's site was back up more than a half hour later, but that outage wasn't uncommon at the time.

Tim Wierzbicki, manager of customer service performance analysis for New Jersey Transit, spoke about his experience with SaaS and downtime. His agency has been using SaaS for more than three years to meet its CRM needs. "We had one [disruption] way back in early 2006. It was a highly publicized outage period that Salesforce experienced. At that point, we were a little concerned."

But Wierzbicki said New Jersey Transit hasn't experienced additional outages in the more than three years since. For its part, displays server uptime reliability on its site that users can check at anytime to see how their systems are doing. And the same CIO magazine article that reported the outage wrote "'s overall uptime is, more than likely, better than the uptime of your in-house CRM or ERP applications."

An alternative to going purely SaaS is to go hybrid SaaS, running some things on premise and some in the cloud or switch between them as needed. This allows users to move operations and data in-house to avoid downtime issues or to transfer highly sensitive information out of a third party's hands. Or they can choose hosted applications for some things and not others.

Social CRM Meets Web 2.0

With so much SaaS implementation going on, its future appears bright. So bright, in fact, that its deployment may be slightly evolving, at least where CRM is concerned. Thanks to Web 2.0, CRM is being blended with social networking to provide modern communication tools for government. State and local leaders need look no further than the president for inspiration. This past year, the Obama administration experimented with tools from Google and to communicate with the electorate over the Internet.

Google Moderator is a Web application that lets

people ask questions over the Internet, and then others vote on which questions they think are most important. The president's transition team used Google Moderator in December 2008 to solicit questions from citizens on the Open for Questions page of Barack Obama's site. The goal was to find out what issues people considered most important before he took office. According to the site, more than 20,000 people cast nearly 1 million votes on 10,000 questions.

Team Obama also unveiled the Citizen's Briefing Book in January 2009 on, powered by's hosted CRM technology. The program solicits ideas from citizens on how to fix the country's problems, and lets other citizens vote on them. According to, more than 70,000 people participated with half a million votes.

Some states, cities and counties are already using Web 2.0 tools. Neighborhood America, a company that builds enterprise social networks for customer engagement, has worked with private- and public-sector clients since 1999 to build social networks. In spring 2009, the company announced a partnership with Microsoft to create the Public Sector Idea Bank, a group of Web-based solutions that allow governments to track and respond to public records requests, constituent service requests, meeting agenda documents, field-inspection cases and other public processes.

Thomas-Flynn thinks government 2.0 projects will take a little while to gain traction, according to what she's witnessing at Microsoft.

"I don't think this sort of migration to the cloud is going to happen overnight," she said. "I think it's going to be several years, but there's absolutely a lot of customers who we're working with right now that are either considering or have adopted some elements of online offerings."

Ultimately, using SaaS to communicate with constituents in innovative ways could enhance government's image in the eyes of the public. In his book CRM at the Speed of Light: Essential Customer Strategies for the 21st Century, Rutgers University's CRM Research Center chairman and executive vice president of the CRM Association Paul Greenberg wrote that Americans have a love/hate relationship with government that varies depending on how responsive people think it is to their needs. CRM, or government-to-citizen interaction, can be a tool for the public sector to show that response.

"If the government is truly of the people, by the people, and for the people," he said, "if it actually is following the principles of the republic, small 'r,' then the way that the citizenry tends to engage the government is by the capabilities the government offers in their effectiveness in counting out those capabilities and promises that they make."

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Hilton Collins

Hilton Collins is a former staff writer for Government Technology and Emergency Management magazines.

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