SaaS integration problem impacts large and small alike…..

A nice article in Finance Tech about the rise of SaaS on Wall Street. I find it interesting that articles about SaaS today go beyond the basics and have started to dig into some of the more practical aspects of SaaS deployment. For example, in this article they highlight the challenge of integrating SaaS with legacy apps:

A lot of firms still have 25 years of legacy stuff that has to be integrated with other systems, and customer data tends to reside in large-scale mainframe systems,” Cohn says. “As a SaaS provider, integrating to that and updating it is very expensive and sometimes traumatic. I see firms tackling it, but it’s more work than anybody had anticipated.”

These challenges, Cohn notes, can lead to both time delays and cost runovers. “It’s a lot harder for large companies to do SaaS than the vendors would like,” he continues. “I’ve seen folks try to do it and want to do it, but it’s quite complicated because they’re still locked into old internal systems, especially for pricing data and risk data. These legacy systems were never meant to be accessed the way SaaS applications want to access them.

And the counter intuitive point that small companies are SaaS power users:

“A small player doesn’t have a legacy structure to deal with, and a data conversion might cover hundreds or thousands of clients, not the tens of thousands or hundreds of thousands that larger firms deal with,” Oliver Wyman’s Cohn notes. “I’ve seen more innovation in the use of mashups, SaaS, and integration and consolidation tools from smaller players.”

While that may be true at some level, there is also the obvious fact that small players also do not have large,or sophisticated IT organizations to actually perform this kind of integration work.

So, as I see it, lots of pain all around.


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